Kyivstar Group ($KYIV)
Contrarian Opportunity: Ukraine’s Telecom Champion Building Beyond Connectivity
It might be that I just read about Sir John Templeton in Richer, Wiser, Happier, but the contrarian in me has come up with quite a flashy idea. If you haven’t read the book, I highly recommend it (I was re-reading it, so I think it’s that good).
What if I told you there is a dominant player in the Ukrainian telecom industry (!!) that is growing at high double digits (37% in H1 YoY), while maintaining one of the highest EBITDA margins in global telecom (58% in Q2 2025), and building a digital services platform that already represents 10.7% of total revenue, growing 460% YoY?
Of course, it’s cheap — around 3.5x EV/EBITDA — for obvious reasons, like the ongoing war that challenges the very existence of the country where this company operates (talk about risk!). Still, there are plenty of reasons to believe it will do well if/when the war ends, or even if the conflict stabilizes. I’m no portfolio manager, but this is the kind of idea that should be sized carefully within a portfolio. And just to be clear: this is not investment advice.
The Company
Kyivstar is the leading telecom operator and one of the most recognizable brands in Ukraine. With ~22 million mobile subscribers (~47% share) and 1.1 million broadband subscribers (~14% share), it is the country’s #1 telecom provider and a digital services leader through Kyivstar TV, Helsi (digital health, 29m registered patients), cloud & big data services, and most recently, Uklon (ride-hailing and delivery).
Market share has been stable over time.
The company generated $589m of Adj. EBITDA LTM on a $2.5bn market cap with net cash. They recently listed on Nasdaq (via Cohen Circle Acquisition Corp. SPAC), making it the only pure-play Ukrainian investment vehicle available to U.S. and international investors.
The public float is just $227m, so don’t expect it to be very liquid. The parent company, VEON, is a multinational telecom and digital services operator with businesses across several countries.
History
Kyivstar was founded in 1994 under the name Bridge and was one of the first mobile networks in Ukraine. Initially focused on mobile services, it broadened its offerings throughout the 2000s by investing in mobile data and modernizing infrastructure to support the rollout of 3G and later 4G LTE. In 2005, it was acquired by VEON, which has been listed on Nasdaq since 1996.
In recent years, Kyivstar has diversified through strategic acquisitions. In August 2022, it bought a stake in Helsi, a digital healthcare platform, and in May 2025, it increased its stake from 70% to 98%. Helsi generated $5.1m of revenue in Dec 2024, growing 42% YoY.
In December 2022, Kyivstar spun off — while retaining full control — Kyivstar.Tech, which provides services from UX and product development to vendor management and infrastructure. These are mainly intra-company services ($24m out of $24.2m in 2024 were intra-group).
In December 2023, it acquired LanTrace for $2m to expand broadband services.
In April 2025, it acquired 97% of Uklon for $155.2m. More on Uklon later.
Why This Might Work: Convergence + Digital Ecosystem = ARPU Growth
Kyivstar’s strategy is clear: leverage its mobile dominance to cross-sell fixed broadband, TV, and digital services — a model proven across Europe to drive higher ARPU, lower churn, and stronger margins.
Multiplay penetration is accelerating: 6.5m multiplay users (+24% YoY), now 31.7% of MAU.
Digital users are expanding rapidly: 13.4m in Q2 2025 (+51% YoY, +12.5% organic).
Fixed-mobile convergence is deep: 83% of fixed clients also use mobile; 34% also take TV.
Recent acquisitions strengthen the ecosystem: Helsi (healthcare), LanTrace (broadband), Uklon (ride-hailing), alongside Kyivstar TV and cloud/AdTech offerings.
This is essentially a super-app strategy built on a telecom base — mirroring models like Kaspi or Tencent. Traditionally, super apps emerged from banks (payments, credit), but Tencent shows it’s possible to grow from other foundations (like social). Kyivstar demonstrated this with Uklon, a ride-hailing and delivery platform that can now be offered to its 24m existing telecom customers.
ARPU Gap = The Core Upside
Ukraine’s mobile ARPU remains far below regional peers — $2.8/month vs. $10.7/month across CEE operators.
Even modest convergence would imply 3x+ revenue uplift potential.
Structural drivers are now in Kyivstar’s favor: GDP recovery post-war, the shift from prepaid (76% of subs) to postpaid contracts, and multiplay expansion.
Pricing power also remains largely untapped — management acknowledges that ARPU has been “held back by the war.”
Kyivstar’s ARPU already grew 34% YoY in H1 2025 to $3.4, even with customer loyalty discounts in the prior period. Once macro conditions stabilize, Kyivstar can deploy pricing as an additional lever on top of convergence.
“We believe there is significant room for additional ARPU growth that has been held back by the war.”“We believe the average mobile ARPU in Ukraine is relatively low and has the potential to increase to levels comparable to ARPU levels in Central and Eastern European nations. In the nine months ended September 30, 2024, our average monthly ARPU in our mobile services business was $2.8, compared with $10.7 across MNOs in selected Central and Eastern European countries. We believe that with favorable economic developments and renewed GDP growth in Ukraine, this ARPU increase is possible in the medium term.”Why ARPU Has Historically Been Lower in Ukraine
The short answer: Low GDP and high prepaid use.
ARPU has long been significantly below Eastern European peers because of systemic structural factors:
Lower purchasing power
Heavy prepaid & multi-SIM usage
Later, lower-value data monetization
Intense price competition
FX effects that worsen USD comparisons
These factors only shifted incrementally in 2020–21 (data adoption rose, but prices stayed low), and by 2025 the structural picture remains similar. Operators are pushing higher-value bundles and fixed convergence, but income gaps, customer behavior, and competition still constrain ARPU growth.
That said, this is the same starting point seen in many other countries. Heavy prepaid use inflated SIM counts (the denominator of ARPU) and dragged ARPUs down historically. As postpaid adoption grows and bundled services spread, ARPU should climb significantly — as it is now — but there’s still a long runway. Keep in mind: this transition has been a global telecom trend.
Financial Strength and Profitability
H1 2025 revenue growth: +37% YoY (+23% adjusted for cyberattack impact).
H1 2025 Adj. EBITDA growth: +40% YoY (+17% adjusted).
Margins: 57% EBITDA margin, 58% in Q2 2025 — among the highest globally.
Capex: EBITDA – Capex = $309m.
Balance sheet: $450m cash, no external debt.
Digital: 10.7% of revenue, growing 460% YoY, led by Helsi and Uklon.
Growth Strategy
1. Telecom
Maintain leadership and expand multiplay.
Drive consistent ARPU growth through postpaid conversion and pricing.
Expand fixed broadband organically and via M&A in Ukraine’s fragmented market (~3,000 providers).
Mobile market:
On the consumer side, customers are either postpaid (monthly contracts) or prepaid (pay-as-you-go). Postpaid entails higher stickiness and recurring revenue, while prepaid is more volatile. As of Dec 2024, 76% of B2C customers were prepaid, highlighting a significant opportunity to transition users to recurring postpaid contracts.
On the B2B side, 11% of 3-month active subs were B2B (as of Dec 2024), with 8% from large enterprises and 3% from SMEs.
Infrastructure is owned by VEON’s tower company, UTC, which was created through a Kyivstar carve-out and is now Ukraine’s largest towerco. Together they own 15,500 sites, with only 868 in occupied territories.
Kyivstar is the anchor tenant for nearly all UTC sites under a 7-year Material Lease Agreement (with renewal options). Terms are favorable: a 20% anchor fee discount if a third party joins, and an additional 30% discount if leasing over 5,000 towers.
Broadband market:
The market is extremely fragmented (~3,000 providers), with the top three holding ~24% share. Global telecom trends suggest consolidation is inevitable, as larger players invest in networks and roll out bundled services.
“This fragmentation presents a significant opportunity for consolidation, allowing us to expand our market share and extend our reach to both B2B and B2C customers. We are well positioned to capture this opportunity by leveraging our mobile network and our established presence across almost 43,500 broadband-connected buildings.”Kyivstar leads with 1.1m customers (14.1% share) versus Ukrtelecom (5.4%) and Lifecell (4.8%). Recent consolidation has already seen four providers acquired since 2021.
Kyivstar also has strong FMC (fixed-mobile convergence): 83% of fixed clients also use mobile; 34% also take TV. In 2024, it made its first FTTH acquisition (LanTrace for $2m). As of June 2025, it had 44.4k connected buildings.
2. Digital
Monetize vast customer base by cross-selling healthcare, TV, ride-hailing, cloud, and AdTech.
Continue strategic acquisitions in complementary industries (healthcare, cloud, mobility, broadband).
Use data aggregation and personalization to create network effects.
Capex / Infrastructure:
96% LTE coverage with 16k sites; partnership with Starlink for satellite direct-to-cell.
$1bn investment plan (2023–27) with parent VEON to strengthen infrastructure and resilience.
“We are focused on sustaining market leadership and expanding market share by enhancing our digital offerings. A key component of this strategy is driving digital revenue growth through strategic acquisitions and the development of additional products. We are particularly focused on M&A in industries such as broadband, fiber optics, online healthcare, cloud technologies, and ride-hailing.”Uklon
Kyivstar acquired 97% of Uklon for $155m. The company generated $67m in 2024 revenue and grew at a 29% CAGR from 2021–2024. It has over 100k drivers and is a leading delivery platform. In 2023, Uklon also expanded into Uzbekistan, a market with 37m people.
Uklon’s ecosystem impact is underappreciated. Beyond being a new revenue stream, it generates valuable data that can feed into product development, personalization, and cross-selling across Kyivstar’s platform.
MAU growth: +40% YoY
Rides booked: +19.6% YoY (H1 2025)
Deliveries completed: +35% YoY (H1 2025)
Revenue contribution: $21.7m, making digital 10.7% of total revenue (+460% YoY)
Helsi
Kyivstar now owns 98% of Helsi, a digital healthcare platform that supports doctors and institutions while improving patients’ access to care through remote consultations, appointment booking, and medical data storage.
As of Jan 2025: 29m users
2024 revenue: $5.1m (+42% YoY)
Impact of War: Headwinds Now, Optionality Later
3.1m subscribers lost, but 1.2m retained abroad through roaming offers
5.3% of network destroyed, with 82% already restored
Inflation, energy tariffs, and FX volatility pressured results
Yet macro recovery has begun: GDP grew +5.3% in 2023 and +2.9% in 2024. Longer term, post-war reconstruction will accelerate demand for both connectivity and digital services.
Investment Case
Structural ARPU Re-rating
Path to ~3x revenue uplift as Ukraine converges with CEE peers.
Super-App Ambition
Telecom foundation plus Helsi, Uklon, Kyivstar TV, and cloud drive ecosystem stickiness.
Market Consolidation Tailwinds
Highly fragmented broadband sector where Kyivstar has the balance sheet and scale to lead.
Best-in-Class Profitability
57–58% EBITDA margins, with further upside as ARPU expands.
Unique Pure-Play Exposure
The only U.S.-listed Ukrainian operator — a rare, asymmetric way to invest in post-war recovery.
An end of the war will mean a substantial rerating of EBITDA multiple
Trading at comparable eastern European telecom multiples would mean a 2-3x.
Conclusion
Kyivstar is more than just a telecom company — it is building a digital super-app for Ukraine. With unmatched scale, industry-leading profitability, and a balance sheet ready to support acquisitions, Kyivstar is positioned to turn Ukraine’s economic recovery into exponential ARPU growth.
If ARPU converges even halfway to regional peers, revenue and EBITDA could double — delivering one of the most compelling margin-expansion and re-rating stories in emerging markets telecom today.
Thanks for the write-up!
How do you regard the company’s ability and desire to return capital to shareholders?