1. Transformation of Telecom Business in the new World of Data
Kyiv, 6 December 2016
Olga Prokopovych
General Legal Counsel
PJSC “Kyivstar”

2. VimpelCom: a global communications and technology company
Amsterdam
VimpelCom
200+ million subscribers
$9.6 billion revenues

3. Imagine a digital life for everyone
Free calls and messages
Selling and buying goods or services globally
Online birth registration, passport application
Healthcare advice at your home 24x7
Realtime earthquake warnings to a mobile phone
Local (or international) TV series at a convenient time

4. Mobile technologies are leading the way…
Years to reach 1 billion users
Source: The State of Broadband 2015, Broadband Commission

5. We continue investing in connectivity to support surging demand
VimpelCom offers 4G in the majority of our markets – with planned impending launches in most of the remaining markets
We see demand exists (as phase 1 of the ecosystem maturity at previous slide suggests).
Data from quarterly report – not confidential
82% is 9 markets out of 11 (excluding Lao and Zimbabwe, including Algeria, Kazakhstan, Kyrgyzstan and Uzbekistan.

6. Transformation of global business models
WhatsApp has 55 employees and reached 1 billion users in Q2 2016
See backup slide #33 for more data. CapEx is hard to compare as many of the disruptors (Snapchat, Uber etc) are private but a brief comparison of CapEx to Revenues:
Facebook 14%
Twitter 16%
Telenor 17%
Telefonica 18%
VimpelCom 23%
Vodafone 29%
Include a slide on a difference between MNOs and OTT giants leading the valuations – global (customer base, data, operational model) v. local; infrastructure heavy v. infrastructure light; agile; integrated organization (no HQ/OpCo differentiation)
IDEALLY – JUST A TEASER – SOME LOGOs and ask everyone to contribute
The combined market valuation is less than half of Facebook alone, with a similar amount of users
Sources: Bloomberg, Google Finance, Forbes, Reuters, Facebook

7. The volume of data is exploding…
Used cross-border bandwidth
90% of the world’s data has been generated in the last two years
40 Zettabytes (40 trillion GB) will have been created by 2020, compared to 4.4 in 2015
More than 1/3 of all data produced will live in or pass through the cloud by 2020
Lines represent interregional bandwidth (e.g. between Europe and North America) but exclude intraregional cross-border bandwidth (e.g. connecting European nations with one another).
Sources: IBM, CSC, McKinsey

8. Data flows have become a crucial economic driver…
The economic model shows that global flows account for approximately 10 percent of global GDP output
Source: TeleGeography, Global Internet Geography; McKinsey Global Institute analysis, 2015

9. …however Legal Frameworks are lagging behind
“National and regional legal frameworks that protect data in the ever-expanding digital economy are often outdated, incompatible or missing”
“Insufficient protection can create negative market effects by reducing consumer confidence, and overly stringent protection can unduly restrict businesses, with adverse economic effects as a result”
- Data localization requirements can have a negative impact on GDP between 0.7% and 1.1%
- Data localization requirements increase costs for local companies by percent
If services trade and cross-border data flows are seriously disrupted (between the EU and U.S.), the negative impact on EU GDP could reach -0.8% to -1.3%.
Data localization requirements would lead to a negative impact on GDP in countries where considered:
Brazil -0.8%
India -0.8%
Korea -1.1%
Indonesia -0.7% (implemented)
Cost to local companies for their computing needs would increase 30-60
Source: UNCTAD, 2016

10. Traditional policy topics remain relevant
Licenses and Spectrum
Broadband for Development
Interconnection + Sharing
InternationalRoaming
Taxation
Numbering and identification too

11. Regulatory environment becomes increasingly complex
New Policy Topics
Digital Offerings
Internet messaging
Comms
State-of-the-Art Operating Model
Traffic management
Mobile Finance
Meeting Policy Objectives
Privacy | Data transfers | Data management
IoT
Cybersecurity
Enter- tainment
Mobile ID
Big Data
Financial regulation
While enabling digital development
e-Commerce
Content requirements
Mobile Health
Piracy

12. Ukrainian Telecom Policy Issues (to name the few)4G
Electronic Telecomm’s
Access to Infrastructure
Subscriber Data Transfer
Mobile Number Portability
Mobile ID
Mobile Financial Systems