November 9, 2017 / 10:20 AM / a year ago

UPDATE 1-Veon posts loss at flagship Wind joint venture; new app downloaded 5 million times

(Adds CEO interview)

By Anthony Deutsch

AMSTERDAM, Nov 9 (Reuters) - Telecommunications company Veon’s new mobile internet platform, which competes with messaging services like Whatsapp, was downloaded more than 5 million times since it was started last year, its CEO said on Thursday.

The flagship new Italian joint venture Wind with CK Hutchison, the launching pad for its shift from traditional data to an internet technology company, booked a net loss of $608 million in the third quarter, Veon said.

Quarterly underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 16.4 percent from a year earlier to $1.04 billion.

Chief Executive Officer Jean-Yves Charlier said the company’s new mobile platform had been downloaded 5.3 million times since being launched in Italy in November last year. It will be introduced to customers in its remaining markets in 2018.

The messaging app, which is designed to compete with the likes of Facebook Inc’s WhatsApp and Rakuten Inc’s Viber, offers free services to customers via its mobile network without users incurring data charges as other apps do.

“We are starting to see real customer traction in these new services,” he said in an interview. It has been rolled out in Russia, Pakistan, Ukraine and Georgia in recent weeks. “We’ve seen strong interest in those markets.”

The company did not yet provide details about the number of users of its new service.

“In Italy, we are in the middle of implementing our synergies and merging these two companies. You would expect to see some significant restructuring charges,” he said. “We are progressing as expected, if not better, in terms of the merger and those synergies.”

It maintained a projected 700 million euros in recurring annual synergies by 2019 from the Italian join venture, with roughly 100 million euros having been achieved so far this year.

Underlying group EBITDA excluded exceptional items, including performance transformation costs of $66 million and a gain of $49 million from a one-off adjustment to a vendor agreement, it said.

Veon’s group sales rose 4 percent in the third quarter to $2.46 billion, largely due to strong growth in Russia and Pakistan.

Russia and Pakistan contributed more than half of EBITDA, rising 15.7 percent and 41.8 percent respectively. Veon said EBITDA fell in Algeria, Bangladesh and Uzbekistan.

The company, with 235 million mobile customers worldwide, said net debt rose 26.9 percent to $8.67 billion.

In February 2016, Amsterdam-based Veon, formerly known as Vimpelcom, reached $795 million in settlements to resolve U.S. and Dutch bribery investigations related to Uzbekistan. (Reporting by Anthony Deutsch; Editing by Vyas Mohan and Angus MacSwan)

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