Telecom Is the Cheapest Way to Distribute AI – VEON

Why It Matters

By leveraging its extensive subscriber base, VEON can democratize AI access in emerging markets, challenging hyperscalers on price and relevance. This strategy could reshape revenue models for telcos and accelerate AI adoption among underserved businesses.

Key Takeaways

• Digital services now generate 25% of VEON's revenue, up from 17.8% a year ago
• AI revenue grew 57.7% in Q1, outpacing total revenue growth
• VEON launched Kazakh, Pakistani and Ukrainian language LLMs for local use
• Telco network offers the cheapest distribution layer for AI products
• Goal: digital services to represent half of VEON's revenue by 2030

Pulse Analysis

VEON’s pivot toward AI‑driven digital services reflects a broader telco trend of monetizing network reach beyond voice and data. Operating in five high‑growth emerging markets, the group serves roughly one‑third of the regional population as a carrier and half as a digital‑service user. This dual‑customer base gave VEON a unique platform to embed AI into everyday applications, from health‑tech to ride‑hailing, and to capture a 57.7% YoY surge in digital revenue during the first quarter. The rapid growth underscores how telecom infrastructure can become a low‑cost conduit for AI distribution, especially where hyperscaler pricing remains prohibitive.

The company’s AI strategy focuses on localized large language models (LLMs) that speak Kazakh, Urdu and Ukrainian, reducing language barriers that often limit AI adoption in emerging economies. By partnering with established models like Google’s Gemma for Ukraine, VEON sidesteps the massive R&D costs of building foundational models while delivering tailored solutions for SMEs lacking in‑house IT teams. Affordable AI agents for tasks such as procurement, accounting or appointment scheduling give small businesses access to automation previously reserved for larger enterprises, fostering a new ecosystem of AI‑enabled services anchored to the telco’s network.

Looking ahead, VEON aims to have digital services constitute half of its total revenue by 2030, a shift that could redefine the competitive landscape for telecom operators. The emphasis on price‑accessible AI, combined with a controlled‑environment approach that keeps human decision‑making in the loop, positions VEON as a pragmatic alternative to the “tech‑co” ambitions of many operators. If successful, this model may prompt other carriers to leverage their subscriber bases as AI distribution platforms, accelerating market penetration while preserving regulatory compliance and customer trust.