Digital Transformation of the Economy: Trends and Perspectives TOMAS LAMANAUSKAS – Group Director Public Policy September 2017

VEON: GLOBAL company with Local Relevance 235+ MLN CUSTOMERS RUSSIA UZBEKISTAN KYRGYZSTAN BANGLADESH PAKISTAN KAZAKHSTAN ARMENIA UKRAINE ITALY ALGERIA AMSTERDAM TAJIKISTAN GEORGIA $8,9BLN REVENUES LONDON 13 MARKETS, HQ IN AMSTERDAM (+DIGITAL HUB IN LONDON) LAOS 65% 3G COVERAGE | 2G: 94% | 4G*: 20% * excl. Italy

VEON: telco & TECH Local Global +

TRENDS: DATA USE IS Exploding Smartphone - typo Mobile data traffic is expected to have increased sixfold by 2020 Source: Ericsson Mobility Report, 2016

TRENDS: Digital Investments ARE ACCELERATING DIGITAL INVESTMENT AS PERCENTAGE OF GDP

TRENDS: Traditional Players under pressure Network usage vs revenue generation (in %) Source: EY, 2015 Source: FT, 2015

TRENDS: Plethora of Digital Players are Emerging Source: CB Insights

TRENDS: Sector is being Reshaped Market Capitalisation Growth in last 5 Years (US$, Dividends Excluded) +$225bn +$286bn +$202bn +$155bn +$32bn +$18bn -$9bn -$42bn Telco = -$1bn Digital = +$868bn

TRENDS: As well as the Global Economy

TRENDS: From employment to partnerships Largest employer in the world Sources: Bloomberg, 2017

KEY ENABLERS: connectivity Brings growth “A 10% INCREASE IN BROADBAND COULD RAISE ECONOMIC GROWTH BY BETWEEN 0.25% - 1.4%” (ITU, 2016)

KEY ENABLERS: data flows Global data flows account for approximately 3 percent of global GDP Data localization requirements could lead to a negative impact on GDP of 0,7-1,1% Data localization requirements could lead to an increase of computing costs to SMEs 30-60% Productivity declines significantly – in particular for communication services – with potentially 2.7% in Russia, 2.2% in China and 1.8% in the EU Source: McKinsey, 2016

KEY ENABLERS: DIGITAL FINANCE 2 billion people remain unbanked globally, of which 410 million within our footprint (which is 58% of the population) 200 million MSMEs in emerging economies lack access to savings and credit 80-90% cost savings could be realized by service providers by shifting from traditional to digital accounts Source: Global Findex, 2015; McKinsey, 2016

KEY ENABLERS: digital FinancE Access to the global digital economy Ability to transact, save, borrow, insure $2,1 trillion of loans to individuals and businesses could be made sustainably $110 billion could be gained by governments each year by reducing leakage in public spending and tax collection 95 million jobs could be created in emerging economies within a decade as a result of inclusive growth Secure electronic account Source: McKinsey, 2016

OUR APPROACH: ecosystem approach to ict4d Policy/Regulatory Environment ICT empowered individuals & communities e-commerce e-gov e-education e-health e-agri Digital Platforms DFS/MFS eID Data Connectivity

VEON Personal Internet PLATFORM

EMPHASIS oN local partners 80% Global 20%

EMPOWERING VERTICAL INDUSTRIES mAGRI mGOV within Vertical Sectors Experts Local Government and other industry led institutions mHEALTH mTRANSP Technology Partners Content Providers Third Party mRETAIL mEDUC

Our digital financial services A CARD YOU CANNOT MISS VEON CARD USERS REMITTANCE AIR TIME CASH OUT + CREDIT DCB mPOS | QR OFFLINE PAYMENTS +48mln Utilities, Games, Transport… Sim 2 Any Sim Card | ATM | Post Appstore | PlayStore

SUCCEDING TOGETHER: EmPOWERING DIGITAL DEVELOPMENT Algeria Pakistan In 2016, our Eurasia Mobile Challenge in Russia and the CIS was our most success­ful yet with over 1,000 entries In 2016 we had 4,700 registrations in our digital entrepreneurship competitions In 2016, 9,400 people attended our entrepreneurship educational events (classes and conferences) We have incubators in 5 of our countries (Italy, Pakistan, Bangladesh, Algeria and Ukraine), in Bangladesh and Pakistan we worked together with the local governments to launch National Incubation Centers. Eurasia Italy

THANK YOU TOMAS LAMANAUSKAS Group Director Public Policy tomas.lamanauskas@veon.com THANK YOU Claude debussylaan 88 1082 md Amsterdam The Netherlands Tel +31 (0)20 79 77 200 Tax +31 (0)20 79 77 201 twitter.com/veon facebook.com/veon

VEON in uzbekistan UZBEKISTAN 42,8% 28,7 59,0% 9,5 1,250 WORLD 43,9% Internet Usage Mobile Broadband (per 100 people) Unbanked Adults Customers (in millions) Employees UZBEKISTAN 42,8% 28,7 59,0% 9,5 1,250 No MFS in Uzbekistan, only Airtime loan and Remittance receiving 3G and 4G coverage: 52,8% (3G) and 8% (4G) in Uzbekistan vs 84% (3G - ITU) and 23% (4G - GSMA) globally WORLD 43,9% 49,4 38,5% +235 51,300 Source: World Bank, 2016

Veon DFS offerings in eurasia 2017-2018

Utilities, Games, Transport… Beeline is the first MNO in Kazakhstan to offer Financial Services in 2016 … A CARD YOU CANNOT MISS Beeline Card Digital Payments Remittance Air Time Cash Out Google DCB 1500+ merchants in 2017 Offline Payments 200+ X2 Utilities, Games, Transport… Sim 2 Any Sim Card | ATM | Post CONCEPT WAS CREATED

QR Payments: 1,500 + locations in 2017 Scan Pay Go

Example: mobile financial services in Ukraine by Kyivstar

E-government key priority globally

The e-government opportunity Over 71% of governments globally aim to introduce or expand e-government services Between 73 and 130 million people could potentially benefit from e-government services within our footprint 71%: own research for ITU (103 countries) 73 & 130mln: EU interaction gov (57%) and tax filing (22%) times population with smartphone in our markets. 1 in 3: BCG Only 1 in 3 government services in Europe is tailored for use on a mobile device