Kyivstar Group Ltd. ($KYIV)

Hello, and welcome to Kyivstar's 1Q '26 Results Presentation. [Operator Instructions] As a reminder, this conference is being recorded today. [Operator Instructions] Cole Akeson, you may begin.

Thank you. Good afternoon, and good morning. Thank you all for joining us to discuss Kyivstar Group's or Kyivstar's first quarter results. I am Cole Akeson, Group Director for Kyivstar Investor Relations. Joining me today are Kaan Terzioglu, Chairman of the Board; Oleksandr Komarov, the CEO; Boris Dolgushin, our CFO; and Anand Ramachandran, Chief Corporate Development Officer or VEON. Oleksandr will begin with strategic and operational highlights followed by Boris with a review of our financial performance. We will then open the line for questions. Before we begin, please note that today's presentation contains forward-looking statements, which involve risks and uncertainties. Further details are available in our SEC filings including our Form 20-F filed March 16, 2026. Our earnings release and presentation are available on our Investor Relations website. With that, I'll hand over to Oleksandr.

Thank you, Cole. Hello, everyone. We started 2026 with strong execution. Our telecom core is resilient, our digital ecosystem is scaling, the two businesses fit each other. Let me start with the numbers. Revenue reached $323 million. This is an increase of nearly 27% year-over-year. EBITDA grew more than 23% to $173 million. We focus on cash generation. Equity free cash flow grew almost 32% to $87 million for the quarter. Second, our digital transformation. Digital revenue more than tripled year-on-year, reaching almost 21% of our total revenue in first quarter 2026. This is an increase of more than 5 percentage points quarter-on-quarter and more than 13 percentage points from a year ago. Our platforms have scale. We now serve more than 28 million non-unique digital customers, a number now larger than our mobile subscriber base. We also streamlined our [ import in ] this quarter integrating identity services into our digital enterprise vertical to provide a clearer and more consistent view of performance. Identity services are undergoing a transition away from traditional A2P messaging to [indiscernible] API-based platforms becoming more digital than traditional analog mobile. We also moved to reporting customers across service lines on 3-month active basis to provide better comparability between lines and [indiscernible]. Accordingly, we provide reclassified numbers for past years to ensure comparability and maximum visibility. Third, our multiplay strategy. Multiplay customers use voice, data and at least one of our apps. We generate more revenue individually and are less likely to [ churn ]. Multiplay customers grew 31.6% to 8.1 million. They now make up nearly 40% of our active mobile base. This engagement drives the top line Mobile ARPU rose 14.1% year-on-year to $3.80. Finally, our strategic investments. In February, we consolidated Tabletki. Tabletki is Ukraine's leading online health care marketplace and processed $258 million in gross merchandise value over the two months of consolidation for the quarter. We expanded our cooperation with SpaceX to resell Starlink Internet to enterprise customers. Over 5 million customers already use our Direct to Cell messaging services and we will launch light data later this year. As for our first quarter financials, telecom revenue grew 8% to $256 million, Customers are moving to 4G and using more data. Digital revenue grew 257% to $67 million. The consolidations of Uklon and Tabletki drove this surge. Our other digital products also grew organically. Starting from this quarter, we are splitting our EBITDA disclosure to show digital separately from telco and infrastructure. This better clarifies the development of their respective verticals. Total EBITDA rose more than 23% to $173 million. Our telco and Infrastructure core generated $144 million in EBITDA, resulting in a 56% margin. Our digital platforms generated $29 million in EBITDA producing a nearly 43% margin. Net profit reached $85 million, earnings per share was $0.37. We invested $67 million in capital expenditure. Our CapEx intensity was 20.9% for the quarter, which generated $161 million in operating cash flow. Equity free cash flow grew 32% to $87 million. Cash generation funds our growth. Our cash position remained strong at $353 million. Now let's look at the mobile business, where we serve 22 million customers. Our annualized churn rate was 16% for the quarter. We remain the country's clear market leader. Mobile ARPU grew 14% to $3.80. Customers are moving to 4G and using more data. Data consumption grew 31% to almost 15 gigabytes per user monthly. Nearly 70% of our mobile base is now on 4G. Our fixed broadband base grew almost 12% to move to the 1.2 million customers. This includes 52,000 new users from our recent SHTORM acquisition. Broadband and digital entertainment work closely together. Today, nearly 46% of our broadband users also subscribed to Kyivstar TV. Gross sales and synergies bring us back to the core of our digital growth strategy, multiplay. Multiplay customers grew almost 32% year-over-year to $8.1 million. They now make up nearly 40% of our active mobile customer base. They also generate higher revenue. The average multiplay customer generates $5.30 in a [ multi ] ARPU. This is nearly 40% more than the average mobile customer. They spend more now in digital [indiscernible] but they also spend more on connectivity. Let's look closer to our digital revenue. Digital revenue grew by 2.6x to $67 million. It now makes up almost 21% of total revenue. Three points about this performance. First, strategic acquisitions enhance our scale. The consolidations of Uklon and Tabletki drove the bulk of this quarter's surge. That said, the group is also broad-based. We see momentum across all verticals, Uklon, [ Helsi ], Tabletki, Kyivstar TV and the digital enterprise business. Third, we have a structural cost advantage, our telecom customer base provides low acquisition costs our Multiplay bundles act as an optimized distribution model. This synergy allows us to scale platforms, profitability and maintain strong unit economics. Moving to Uklon, our mobility platform. In the first quarter, Uklon generated nearly $33 million in revenue and more than $12 million in EBITDA. This reflects both a scaled business in Ukraine and a growing business in Uzbekistan. The platform process nearly 44 million rides and 1.5 million deliveries, the latter reflecting an almost 10% rise quarter-on-quarter. Active customers rose to more than 5 million for the quarter. We are expanding the product range. Customers can now book intercity bus tickets directly in the new Uklon Travel. We continue to explore new ways to develop Uklon further as a comprehensive one-stop mobility platform. Our digital enterprise business is [ great gain ] in scale with more than $16 million in revenue and 9% increase year-over-year. We managed 2,200 active B2B contracts up 31% year-on-year. Big Data and AI drove the majority of this quarter's growth. The segment's revenue grew 75% to $4.4 million. Cloud revenue grew 42% to $2.3 million. ADWISOR, our self-service advertising platform primarily focused on small- and medium-sized businesses expanding to over 4,000 registered clients. The division also contains [ Kyivstar ], which binds our ecosystem together and is responsible for some of our most cutting edge work. An example is our work in cooperation with the Ukrainian government and leading international partners to produce our sovereign LLM which is trained exclusively on Ukrainian language data to meet the unique needs of Ukrainian clients. Moving to entertainment, Kyivstar TV remains the largest media stream service in Ukraine. Revenue grew 390% year-over-year to $10.5 million. Last year's shift to gross revenue recognition is complemented by strong organic momentum spurred by two factors: first, customer expansion and engagement. Our customer base reached a new record at more than million. As I mentioned earlier, more than 46% of our fixed broadband base now subscribes to our TV platform. Second, our original content continues to inspire engagement, new crime drama, Tykha Nava is the most watched title in the platform's history. Exclusive Ukrainian content attracts new customers and strengthened our ecosystem. We are looking forward to soon being exclusive Ukrainian broadcaster of an upcoming boxing match featuring world heavyweight champion and proud Ukrainian, Oleksandr Usyk. On the health care, Helsi is Ukraine's leading health base platform. We serve 4.9 million active digital customers in Q1. Patients booked 2.4 million appointments through the platform. We are [indiscernible] the platform paid services. Customers paying the premium offerings increased by more than half quarter-on-quarter to reach more than 87,000. Revenue grew nearly 32% year-over-year to more than $2 million. Helsi powers appointment scheduling, prescriptions and health records, including integration with Ukraine State Health System. The platform makes care easier and faster to [indiscernible] and win-win for patients and lookers alike. Customers are upgrading for a range of advanced health insights. Our healthy superpowered telecom bundle helps drive these conversions. Helsi highlights our commitment to corporate social responsibilities and ESG. We are expanding access to digital health care for Ukrainians during the war time. Then we have Tabletki, the leading online health care marketplace. We consolidated this business in February. In just two months, the platform contributed more than $5 million in revenue and more than $4 million in EBITDA. Customer volume is strong. The platform facilitated 15.3 million average monthly bookings in the first two months of the year. At the same period, gross merchandise value reached $258 million. We continue to work on integrating Tabletki with Helsi and ultimately with Uklon's delivery network. We expect these synergies to drive deeper engagement across our digital customer base. All these parts come together in our growth strategy. We intend our core productivity business to maintain market leadership. We focus on retaining a high-quality customer base and driving technological innovation. For example, over 5 million customers use our Direct to Cell satellite messaging, and we expect to launch live data later this year. In fixed broadband, we aim to expand market share. We plan to drive this expansion through both for guiding growth and targeted acquisitions. This market brings entire household into our ecosystem, mutually reinforced in the mobile and digital businesses. Third, our digital ecosystem. We anticipate scaling our digital platforms through organic momentum and strategic acquisitions. Our core strategy is to increase Multiplay adoption and different daily engagement across our customer base. We continue to progress our strategies through both organic and inorganic growth. Most recently, we are now -- the expansion of our cooperation with SpaceX to include [ that ] in high-speed internet services to Ukrainian businesses and public institutions allowing us to provide B2C and [ B2B ] customers have full feature and connectivity stack within Kyivstar's packages. Now Boris will tell us more about the financials.

Thank you, Ms. Oleksandr. Total revenue reached $323 million in the first quarter, an increase of nearly 27% year-over-year. This reflects $14 billion [ treatment ] in revenue, a 31% increase. EBITDA grew more than 23% to $173 million based on a 29% gain to [ 7.5 billion ]. As discussed, our telecom margin expanded to more than 56% while our digital platforms have created nearly a 43% margin. This [ page 3 ] reflects our strategy. We generate strong cash flow from our core network that partially goes to fund the rapid scaling of our digital ecosystem. Capital allocation remains disciplined. CapEx [indiscernible] $67 million, which [ in the 21% of credit ]. A significant portion of this capital [indiscernible] was network resilience during the war. Despite the critical investments, our cash conversion remains strong. Equity free cash flow after leases and licenses grew 32% to $87 million. Turning now to [indiscernible]. We ended the first quarter with $353 million in cash and deposits. The sequential increase reflects our capital allocation to fund Tabletki and SHTORM acquisitions. Gross debt, excluding leases, is $94 million. We carry immaterial extend debt mostly on the parent company deal. These regularities totaled $393 million. These arise from our Tower agreements with Ukrainian tower company and are fully recognized under IFRS 6. Excluding these lease liabilities, our net cash position is $259 million. Let me now hand the call back to Oleksandr.

Thank you, Boris. Looking further ahead, we arrive our full year outlook for 2026 on the mix of the ongoing strong execution and external influences that have been less turbulent than assumed in our base case. In [indiscernible], we expect revenue to grow 18% to 21% and EBITDA to grow 14% to 17%. On our average exchange rate assumption of UAH 45.5 to the dollar, we expect revenue to grow 11% to 14% in U.S. dollars and EBITDA 7% to 10%. While this is an upgrade to our previous guidance, it represents moderation from our first quarter growth rate due [ laterally ] other base effects. This anticipates a comparison base that will not only include the immediate aftermath of the 2023 cyberattack, a weaker spot exchange rate and the lapping of the Uklon consolidation. We plan to allocate capital efficiency with CapEx intensity at the range of 21% to 24% of revenue for the year. We intend to continue targeted investments in network quality and energy resilience while normalizing from our elevated 2025 investment cycle. The ramp up. We are delivering double-digit growth across segments, driven by our digital momentum and strong execution. Despite external volatility, our business remains resilient, and our strong cash generation continues to fund our expansion. We think these trends would look impressive for any company, let alone one operation in a warzone and hope you agree with us. Thank you for your support. We can now open for the line for Q&A.

[Operator Instructions] Our first question comes from Max Findlay with Rothschild & Co.

Hello all. Congratulations on the impressive set of results and the upgrades. In mobile, there were 400,000 subscription losses in Q1, which was higher than Q1 last year. It's sometimes hard to discern what contributes to net losses. And it would be useful to understand how much of this is secondary SIMs dropping off versus primary SIM loss and what [ sites ] do you have of how net adds will develop throughout the year? And then secondly, sticking to mobile. Mobile ARPU growth was very impressive in Q1. I guess there are a few things going on here with the loss of roaming revenues and the drop of low ARPU secondary SIM subs. So you're able to kind of quantify what is driving mobile ARPU growth, that would be very useful.

Okay. Let me start with the first question. So this -- Kyivstar's customer base decline is actually the reflection of the overall market plan. So this trend is very much driven by a few factors. The first factor is a decline in the number of double [ SIMers ] across the market. The second factor is the decline in the new gross adds because of a certain [ shelf ] price increase, okay? And the third factor is overall demographic situation in Ukraine. It's a bit difficult to quantify, but the biggest factor is actually double [ SIMers ] which is very much situational and driven by very heavy blackouts we faced during the December, January this year, okay? Let me also draw your attention to one simple fact that according to the national regulation statistics, okay? So Kyivstar is maintaining subscriber market share year-on-year. We grew 0.1% in 2025 versus 2024, okay, and we are relatively stable for the last years with around 47-plus percent subscriber market share. Okay. And your second question is forgive me, just remind me...

Mobile ARPU.

Okay. And the drivers for mobile ARPU, there are two main drivers for mobile ARPU. The first one is growing data consumption. Despite the war, despite the overall decline in an active number of the SIM cards, okay? So we are -- our customers are consuming more and more data. We observed a 30% increase year-on-year. And the second one is actually disciplined pricing that is actually focused to address inflation in Ukraine, okay? So -- and potential GDP growth. So we already declared that our kind of objective to maintain the mobile [indiscernible] to business growth and the low double digit, it is very much driven by inflation and growing construction of data services.

Our next question comes from [indiscernible] with Barclays.

Congratulations on the results. And a question from me on the digital segment. So you had a very strong growth in the quarter. So just trying to understand on the Kyivstar TV and its launch. So the numbers were quite strong, similar to the 4Q. So what are the factors that are driving this? So just trying to understand, are there any seasonality in them? Or like how should we think of the growth for these two segments in the coming quarters?

Let me take it one by one, okay, So the Uklon growth is actually driven by 3 major factors. Okay. The first one is a growing number of riders. The second one is a growing number of rides per one rider. And the third one is actually pricing, which was very much driven by energy crisis, global energy crisis and the growing prices for the fuel and gas. These are 3 major factors that affect Uklon's performance, okay? We also observed a certain market share increase in the ride-hailing business, but this was also supported by the growing -- much faster growing delivery base. In Kyivstar TV, we observed a certain, let's say, nonorganic growth very much driven by the 3P [ penetration ], okay? So our 3P offer is growing quite significantly, which is driving our Kyivstar TV business growth, which was extremely successfully supported by [indiscernible] at the beginning of the year. You are right, it is a certain seasonality incorporated in the Q1 results, okay? Because normally, this winter time and new year eve time is actually a high season for the inter payment business okay? But the main growth was very much driven by the overall growing number of active customers and originals, okay? Tykha Nava is our own, let's say, originals, demonstrated the record-high numbers of unique watchers, okay, since the launch of the platform. And we do hold and expect that both [indiscernible] will be another [indiscernible] for the further growth.

Our next question comes from Jesse Sobelson with BTIG.

Can you help us think about the Starlink indirect to sell service. Is it a defensive coverage and resilience feature that protects users in ARPU or a stand-alone revenue line that could enable further monetization? I see there's 5 million users here, but I'm very curious on exactly how to think about that part of your business.

Let me start with a kind of segment page. Right now, we provide only one service based on Direct to Cell [ knowledge ] and services, SMS. Okay, we decided for ourselves that taking into account the war situation and that overall humanitarian risk and local connectivity risk that we will provide these for every Ukraine with a Kyivstar SIM card for free. Okay. And this -- what you see as a reflection in our statistics. So more than 5 million Kyivstar customers use this service since the launch in November 2025 and they sent and receive more than 8 million messengers through the satellite technology. In the mid of the year, we are going -- actually second half of the year, we are going to introduce a light data services based on the Direct to Cell technology, okay? And this light data will [ add ] -- let us to use certain applications that will be adapted to the satellite technology across the whole territory of Ukraine, okay? And our main focus to provide this feature to the messengers, to the financial applications and to the state-owned applications like VEON, okay, and since this, we are planning a direct monetization of the Direct to Cell services. And we just recently signed a resell agreement for the Starlink services. Kyivstar will be the first reseller of the Starlink services in Ukraine taken in mind that Ukraine is one of the biggest markets, okay, for the Starlink services across the globe.

Great. Also, I want to just follow up real quick on the M&A front and the environment there, the cash that you have. Can you just elaborate on maybe where valuations are in the space? And if there's any particular verticals within Ukraine that you're currently focused on researching for further expansion?

We are quite open with our nonorganic development strategy. We have 3 main priorities, okay, to invest non-organically in our core business, and this is mainly infrastructure and fixed broadband providers, and you already [ see ] a couple of examples of acquisition of SHTORM, 50,000 customers. Our second priority is to facilitate and accelerate our transformation from that [ sale ] of service provider to the digital service provider with the telco license through organic development like Kyivstar TV and non organic acquisitions like Uklon okay? And the third priority is alternative energy, okay? So it is very much driven by the current energy situation in Ukraine as a growing electricity pricing. We see this had a well thought investment that will let us not only diversify the supply of the energy to our infrastructure, but also to ensure a certain batch of the growing energy prices, okay, so in our core business. These are 3 main priorities for our non-organic M&A strategy.

Our next question comes from Matthew Harrigan with Benchmark StoneX.

Great. I have one down in the weeds question and then one broad conceptual question. On the cybersecurity 'side, clearly, Russian military intelligence, fancy very cozy there, haven't gotten any less active. The attack last year was massively disruptive. I mean do you feel like you've made incredible progress in the vulnerabilities? Are the Russians laying off? And are you dealing very much if AI and cybersecurity in your enterprise offerings as well because clearly, you have some necessary competencies in-house.

Let me start with a very brief description. What we faced at the end of 2023 was not a kind of hacker's attack. It was one of the biggest act like the cybersecurity war and terrorism in the world, okay? So -- and yes, you are right, we are one of the probably primary targets, okay? So from the Russian perspective. But at the same time, I feel ourselves really confident in our ability to protect Kyivstar, Kyivstar infrastructure and Kyivstar customers from the cybersecurity threats. Okay. We invested a lot since the incident. We have hired the biggest global consultants. And right now, I think that we are much better protected than we used to be in 2023 okay, with the support of the global companies like Microsoft, Cisco and others, okay? We are using probably one of the most advanced system in the world very heavily supported by AI monitoring and threat recognition system. So these are our two major factors of our investments instead of one perimeter, create multiple perimeters inside our infrastructure and automate this perimeter with a sea of AI platforms as much as possible in order to ensure any recognition of any potential treat.

And I guess the second question, I think it's instructive to look at your mobile and digital pricing relative to some of the Eastern European markets and even Africa. And certainly, you've got more growth potential than just about any market maybe outside of Africa and you're at some pretty substantial discounts. I remember years ago, people -- the Holy Grail for Mexico was getting Mexican advertising CPMs at the level of Brazil, and it finally happened, but it took about 50 years. And I think consumers just kind of get acclimated at certain pricing levels, it's hard to get things leveled on a global market scale. But what are your strategies for putting the pricing forward when you get a more normal environment, maybe getting close to some comparable markets in Europe and other areas.

I think we are doing a very good job in disciplined pricing right now okay? So I joined Kyivstar in 2018, and it was a market with an average ARPU below USD 1 okay? And despite the work, despite quite difficult economic situation, we, from my perspective, we are able to demonstrate our ability to grow ARPU year-on-year, not only in the local currency but also in the reported currency. And this is our vision. So right now, Ukraine has one of the lowest, actually lowest Eastern European ARPU, which is not in line with the size of the Ukrainian economy, okay? And my own perspective that in the reasonable future, Ukraine should reach at least the lowest Eastern European ARPU, that is for the time being, for example, in Romania, that is above USD 7 per month.

Our next question comes from Ali [indiscernible] with Inam.

So I just had one question. We saw this quarter that Tabletki had an especially high EBITDA margin of approximately 85%. Do you think this margin is sustainable in the longer run?

Yes. So Ali, thank you for the questions. So let me take this. So we have, as an operator, demonstrated I think one of the best [indiscernible] worldwide based on the GSMA analytics. So definitely, as you know, we are moving more and more towards digital business. So this quarter, the first time I think we disclosed the margin of the digital business, which we see quite decent. So we try to protect our marginality of the core business despite all the externalities that impact our performance. At the same time, you need to assume that the more we penetrate into the digital business, so while the [indiscernible] might be lower so it adds to the absolute margin and the absolute net income and this business is incomparable in terms of CapEx capacity. So basically, the CapEx there is just utilization of the labor of the development stuff and in terms of cash conversion, it may result in even better cash conversion. So I would propose to you both on the marginality, but also our cash conversion [indiscernible].

Let me add a bit. I considered our digital margin not a [indiscernible] I think that we are running a big digital business fast growing with the marginality higher than 40%. And I think this is to some percent, unprecedented.

Our next question comes from [ Vincent Fernando ] with [indiscernible].

I wanted to touch on the cloud and big data side of your digital enterprise business. So obviously, with the conflict, I imagine it roughly changes what a data center means in Ukraine. You probably want to be distributed, you have Brazilian architecture. That's probably more valuable than being like a centralized large hyperscaler. But -- so how is Kyivstar thinking about the data center opportunity, given we have that nationwide network footprint, you have some energy independence assets like [indiscernible] and the sovereign cloud positioning. So what comes with being -- Ukraine is [indiscernible] provider, what does the addressable market look like? And how might it be different than other markets because like in that there's kind of risk of being too centralized?

We see the cloud business is quite promising. So far, our main business is resale of Microsoft primarily and the bit of Amazon. But our own consideration that we -- in order to be competitive cloud service provider, we need to be a multi-service provider, multi-cloud service provider. We just recently launched our own cloud business in Ukraine, our own data center, we start to commercialize at the end of 2025, okay? But we are looking for a way how to accelerate it in organic and nonorganic way. To some extent, I'm absolutely sure that expansion after the war and with a certain recovery, okay? And with a certain, let's say, return to a severity, Okay, it will be a very, very fast-growing business stream and we want to be prepared. We want to be prepared from the [ legal ] service perspective from the market share perspective and available competencies in place. So this is quite essential part of our business development.

Our next question comes from [ Adrian Kandi ] with [ Emerging & Frontier Capital LLP ].

My question involves -- my first question revolves around digital top line. If I back out to Tabletki and Uklon and I look at it's sort of an organic growth basis year-on-year, it looks to be very, very high, the growth rate. I'm just wondering if you might sort of compare and contrast the organic growth opportunity in your digital portfolio versus the new acquisitions, do you think -- and it would be great if there's some sort of pro forma view on how Uklon is growing and Tabletki is growing year-on-year? That's my first question. My follow-on question comes back to the capital expenditure of $66 million. I would assume that's overwhelmingly in the telecom business and relative to telecom revenues, that's obviously sustainably -- remains quite high, well above sort of 21%. How much of that is really network resilience? How much of that is things like the 5G [ test bed ]? And given that really sort of 5G subs are now above 70% of your total -- sorry, 4G subs, sorry, are 70% of your sub base penetration, what is sort of the -- given that older people tend not to be on data as much, what is sort of the road map for boosting data through? And how much do you think you're eventually a year or two out, will your network be in 5G given that the government has a testing policy there?

Okay. I will ask Boris to answer the first question and then I will take a second one. So Boris could you please address these organic growth versus nonorganic of the digital revenue stream?

Yes. Adrian, thank you for the question. So as we discussed in the previous call, so even if you exclude Uklon and Tabletki impacts, we have grown about 60% year-on-year. This growth is supported primarily by the existing streams and to our digital enterprise solution and the TV, which, as Oleksandr was explaining, is growing due to the unique content quite aggressively. So it's in line with our promise and to grow the digital business at the high double digit so triple digit and we are executing this.

How long do you think that's sustainable for? That sort of super normal growth rate.

So that's kind of forward-looking statement, to be honest. [indiscernible] so we are a bit careful and limited by the current route in front for us. So -- but you can make this trend by yourself. We were declaring our, let's say, organic growth rate 2025. Organic growth rate in our presentation, Boris just said [indiscernible] at the beginning of 2026 and I think that you can make your simulation quite easily.

If I may. To make our legal team slightly more comfortable, the raw numbers are [indiscernible] Slide 7.

Coming back to CapEx. Of course, we do not consider CapEx higher than 20% as a normal month. So it is definitely elevated by necessity to invest in the resilience okay? And around [ 50% -- 15% ] of our CapEx is actually streamlined into the different resilience projects, okay? But let me emphasize that quite a big share of our CapEx is focused on the modernization and strengthening our Helsi network. We have accelerated 3G [indiscernible] this year is the last year of 3G technology for Kyivstar in Ukraine, okay? We want to strengthen our technological leadership versus the competition. okay? We are very close to finalize our license -- 4G-driven license obligation with a population coverage almost 97% with all the major roles powered by the LTE technologies okay? And my own perspective that this will be the main technological vehicle of mobile telecom for the next probably 5, 7 years. We do not expect 5G to be really introduced in Ukraine until end of the war. So the most probable scenario is something like 12 months after the war, and that's why we are considering our investments in LTE technology as a strategic part. And by the way, this is very much confirmed by the [indiscernible], the external monitoring company that actually awarded Kyivstar with all 3 available [ cohorts ], the biggest network by coverage, the fastest network by speed and the best plan from the customer experience perspective.

Just one final question on -- I wasn't aware of the sunset on 3G, but is that going -- the 30% of your base is not on 4G right now. I mean, is there a device limitation there? Are these old folks without a smartphone? And is that going to -- when you migrate them off, is that going to have an impact?

It's a good question, but to be fair, 4G smartphone's penetration is not an issue in Ukraine, Okay, so as I mentioned at the beginning, the Ukraine market still has a relatively high penetration of double [ SIMers ], okay? So people using different SIM cards for the different purposes, okay? So -- and somehow, I think that the 70% LTE penetration according to the global benchmark is a very healthy level despite the fact that 4G was introduced in Ukraine with a certain delay.

Our next question comes from [ Tim Savageaux ] with Northland Capital Markets.

Congrats on the Tabletki deal as well. Looks like based on those financials, we should be looking for more of those. And my question is on organic growth as well, except sort of with an EBITDA focus. And I don't know to what extent Tabletki was contemplated in your previous guidance increase last quarter for '26 or this one but it seems like there's some offsets on the cost side where we might expect a greater increase in EBITDA. You talked about energy costs before. It does look like the organic EBITDA growth rate for the company is kind of low single digit implied in '26. So am I getting that right? And is there some offset on the cost factor or on the cost front that's kind of the headwinds in your strategic growth or inorganic growth?

I think I will let Boris to answer this question, okay? So Boris, please.

Yes. [ In thinking ] to the question, I think when we look at this Q1. So if [indiscernible] organic growth without, as you said [indiscernible] for Tabletki and Uklon is positioned because we didn't have Uklon consolidated in 2025. So if you look at this, we are at 16%, I'm talking organic terms I don't put in dollars here because we also have definitely [ the translation ] impact on our numbers. So we are about 16% in terms of gross revenue and EBITDA growth year-over-year. So we are continuing this trend for the rest of 2026. So we gave the guidance of 18% to 21% in revenue, 14.17% in EBITDA which is in line with this guidance. And despite the fact that we do have some factors pressing negatively [indiscernible] such as [indiscernible] prices as you mentioned, or the euro regulation in production, which is quite a significant impact for 2026. As you can see, we are trying to offset them both in terms of the telco growth and in terms of the digital growth that we just discussed.

Okay. Great. And then to follow up, I think you've seen a pretty notable uptick in multi-play subscribers over the last two quarters, in particular, would you attribute that to bringing in some of the new digital services in terms of acquisition and in terms of maybe those subscribers already having that service? And I know -- and this would be a tough but whether you expect that multiplay trend to continue? Or what exactly you would attribute this uptick we've seen really in the last couple of quarters in multiplay?

I will not answer on trend, but this is one of our ultimate objective to grow number of multiplay and multiplay penetration into our customer base. What you see as a result of 3 major factors. The first one is our guiding growth of the multiplay penetration. Every new gross app with a certain profitability being converted into the Multiplay. On the shelf right now, we do not propose mobile standalone. Our basic value proposition consists of mobile fixed and Kyivstar TV plus extra services provided in a form of superpowers, how customers can customize their own value proposition with certain services provided by the ecosystem. As one of the example, Helsi subscription, okay? And at the same time, of course, the second major factor is nonorganic, okay, driven by the acquisitions of the business like Tabletki. And the third one is actually seasonality. It's a certain seasonality in Multiplay, mainly driven by the entertainment business, okay? And in certain periods of activity, for example, Uklon certain seasonality, Kyivstar TV has certain seasonality. So these are 3 major factors that are actually affecting our quarterly results with an overall trend to grow number of multiplay customers.

Our next question comes from [ Nicholas Paton ] with Edison Group.

Thank you very much for the additional information on the digital business, and I guess it's actually very, very useful to see the granularity. We had a very interesting and instructive conversation on the full year VEON call regarding capital returns for the various businesses. And I'm interested in the difference between your various digital businesses because clearly, some of them are pure digital, whereas Uklon, which is half of your revenues in digital, is actually a relatively physical business with a sophisticated digital front end. So when you look at the capital returns going forward, how do you place Uklon versus the other digital businesses and versus the traditional telecom business?

I'm not sure that -- so that you have a right approach to our Uklon business. So what we are running in Ukraine is a ride hailing platform. Platform that [ led ] riders to find driver, okay, so for the transportation. So for the [ time being ], Uklon is a pure light asset business and it's a pure digital service. okay? So from this perspective, so I think that all the businesses are actually demonstrating a quite [ healthy originality ] with the top one demonstrated by Tabletki and with an excellent marginality demonstrated by Uklon, which is actually at a lower end, but close to [indiscernible] Okay. But it is close to 40%, sorry, [indiscernible].

[ Nicholas ], since you're asking about like return on capital employed, definitely with the digital businesses such as Uklon without adding any kind of heavy aspects, so this will be way higher versus what you see in our traditional telecom business.

But clearly, Nicholas for the future, if you think about the ride hailing business, and if you think about driver's cars or Kyivstar businesses which are not having the drivers, I think the future of this business will become more, I think, asset heavy as we see, but it's not the issue of today, of course. But 3 years out, I think driverless car will be actually a CapEx heavy business, more CapEx heavy business.

If you take a look at what Uklon is directly announcing some of the [ tech fares ], they're doing some very interesting work on the expertise that they're building.

Our next question comes from [ Vincent Fernando ] with [indiscernible].

I just want to touch back on the Starlink reseller agreement. That's for Ukrainian businesses and public institutions, is that correct? And is that -- is it exclusive to Kyivstar in Ukraine? And how should we think about the revenue model? Pure margin on resales and bundled into B2B connectivity? Just curious, what's the structure of that?

Yes, absolutely right. So we will be focused on the B2B and B2G market with the resale, okay? The income model is structured around certain markup on equipment and traffic with the potential to convert this model into the data pool model that will open new opportunities, okay, based on the wholesale relation to [ Starlink ].

Got it. Is there any exclusivity in the agreement?

No, there's no exclusivity, okay? But so far, we are the only one reseller -- official reseller of Starlink services in Ukraine.

I know it's maybe only been about a week, are you seeing kind of -- what kind of customer [ ramp ] are you seeing or maybe in the early phase to now? And are you being Marketing or marketed?

[indiscernible] the stage, market -- B2B market is relatively developed, but being in a B2B organization right now, you should order the Starlink device through your employee and the compensate, okay, through the salary. You are not able, like a bit of your organization, okay, to order the service directly from the Starlink. So we will be the first -- only one official representative of Starlink in Ukraine.

Our last question comes from Ahmed Mostafa with Inam.

One question for me. You have made several acquisition in more than roughly 18 months. So what synergies are you seeing? And how do you think about integration complexity across [indiscernible]?

We have two types of synergies. The first one is operational synergies that are, to some extent, already extract and reflected in a high marginality of our digital business. The second layer of synergies is a kind of customer synergies, and they are very much reflected into the growing penetration of Multiplay services, combination of telecom services with a different digital services in a unique competitive value proposition in a form of bundles, okay? But on the top of this, we are right now focused on developing our vision of the holistic ecosystem, okay, over all [indiscernible] in Ukraine. So these are 3 major synergies, okay, that we are trying to extract and to convert into the customer and shareholder value. Yes. What we are doing right now, we are focused on some kind of, let's say, [ non regret ] moves. One of them is a single ID across the whole [indiscernible] ecosystem, okay, in order to have proper identification mechanism in order to streamline customer journey and to have better visibility of the customer base.

We have no further questions at this time. I will now hand back to call Cole Akeson for closing remarks.

Well, we'll keep this very brief. Thank you, as always, for your interest in Kyivstar. We are proud to have presented another strong quarter, and we look forward to speaking to you in the following quarter. Thank you again.