VimpelCom’s Q3 results impacted by regulatory and competitive pressures

VimpelCom announced that its quarterly revenues declined slightly, and its profits halved as the company was hurt by regulatory cuts and a general market slowdown.

The company posted third-quarter revenues of US$5.7 billion, which were down by one per cent year-on-year.

The company said that its revenues were hurt by regulatory and governmental actions in the business unit in Africa & Asia and the mobile termination rate cuts in Italy. Excluding the reduction of mobile termination rates in Italy, group revenues would have remained stable organically year-on-year.

At the same time the customer base rose by five per cent to 219 million subscribers. The largest absolute contribution came from a substantial increase in subscribers in Asia and Africa.

However net profits were down by 53 per cent to US$255 million. The decrease is primarily the result of negative foreign exchange effects and higher finance costs due to the Eurobonds issued in Q113 for the repayment of maturing debt in 2013 and 2014.

"The third quarter results were impacted by regulatory and competitive pressures. Our underlying performance was stable and the operational improvements we are making in Russia are on track, with mobile service revenue growth of three per cent,” commented Jo Lunder, the company’s CEO.