Jazz is Likely to Get Rid of VEON

We, here at ProPakistani, have always advocated the diversification of revenue streams and digitalization of telecom operators. It seemed like a survival strategy for telecom companies in Pakistan that were fast losing their conventional (voice and SMS) revenue share to data services.

It became more critical, at the time, as data services were priced in a manner that cannibalization of voice and SMS revenue started to negatively impact the telecom industry.

So while the market lacked diversification, a price-war hampered the industry such that it almost broke the operators and left them with no option but to resort to intensive lay-offs, outsourcing and other price-cutting measures.

3G/4G users started to pick up and everyone thought digitalization could future-proof them from shrinking revenues and ultimately the ROIs.

Enters VEON

This was a time when VEON (previously the VimpelCom) made a major shift in strategy and asked Jazz to become a different thing altogether, i.e. a ‘digital company‘ instead of a conventional carrier.

So instead of diversifying and establishing a new revenue stream, Jazz was asked to bank entirely on VEON and become a digital entity. So much that Jazz was pushed to limits to adopt VEON with almost no control over the product, as it was neither conceived nor developed by a local team.

While Jazz delivered what it was tasked with — that is to get countless numbers of app installs in Pakistan — the local team was not even allowed to make the smallest of changes for localization of the platform on their own. Instead they had to go through a tedious process of getting things done at the group level (and from abroad).

How VEON Became a Baggage

This essentially means that Jazz had to sell a toy that was neither built by it nor was it made for the market where it was to be sold.

This is probably why VEON achieved millions of downloads in Pakistan — in record-breaking time — but could not retain even a handful of the users. It lost most of the users a few months after its launch as they had no reason to use the platform.

Jazz had to sell a toy that was neither built by it nor was it made for the market where it was to be sold

Jazz was pretty much on the backfoot as it had burnt all ships in favor of VEON, a platform that had all the potential but didn’t come with enough features and localization to attract the local audience.

It was a dead-end. Neither Jazz could withdraw from VEON — simply because of the push from its headquarters — nor could it market VEON aggressively, mainly because the product development was not in their hands.

Outsiders (such as media) was told that VEON will be re-re-launched in Q1 2018, which was delayed at least twice with an anticipated re-re-launch in Q4 2018, but now we are hearing that this might not happen and Jazz is likely to off-load a baggage that it never should have carried in the first place.

Future of VEON

From what we have heard, VEON headquarters is now considering to shut down the platform. This will mean that Jazz will keep working as it used to while completely withdrawing from the VEON platform.

According to an email from Ursula Burns, Executive Chairman of VEON, to group management, a copy of which is available with ProPakistani, the company is considering to discontinue the VEON platform in totality.

While the proposal is yet to get a nod from the board of directors, the top management has decided to discuss options and feasibility for rolling-back VEON.

Top management has decided to discuss options and feasibility for shutting down VEON

Ursula, in the email, said that future investments in VEON platform are unlikely to be justified and hence it is being proposed to the board of directors to shut down the platform.

If approved, the digital teams in Amsterdam and London (from where the platform was being planned and developed) will become redundant.

Ursula maintained that teams will be asked for the feedback and after due consultation, the proposal will be finalized and presented to the board of directors.

If approved, Jazz will wind up VEON operations by Q2 2019, Ursula communicated the top management.

The Way Forward

With VEON platform out of sight, Jazz will be ready to focus aggressively on its core business again. We have argued in the past that becoming a digital company is in no way harmful for a telecom carrier, but a telecom carrier must remain a connectivity provider before anything else.

A telecom carrier must remain a connectivity provider before anything else

With a massive margin in the market, Jazz can tap its share to become the primary internet connection provider for millions of Pakistanis. With almost non-existent FTTH (fiber to the home) network in Pakistan, the potential for wireless telecom operators is even greater.

If Jazz can become the primary internet provider of home and business users — which is very much possible — the current ARPUs can be increased by multiple-folds.

On top of this, it can, of course, keep adding more services that can be offered to consumers and businesses in the country.

Jazz Tube, Jazz Discount Bazar and Jazz E-Sell — a cookie cutter solution for e-commerce stores — are good examples of how Jazz can keep adding products to its portfolio to diversify the revenue streams while sticking to its core business of providing connectivity to the masses.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK

  • Jazz cannot do ftth operations. It is a dirty business with cable operators cutting the fiber. Legally foreign companies cannot distribute tv and jazz being majority owned by Russian Group Vimplecom so iptv and cable tv is out.

    Jazz should focus on 4G and 5G which will give ftth companies a major threat itself. even they can get a minority stake in dth operator. Percentage foreign ownership allowed is 20 percent

  • I think its an extremely good step. The platform was loss making with the business plan only a monkey would make. The next step should be to increase the call/SMS rate as well as its the same since 2007. With inflation rising to an all time high, I think that lower rates is a strain on the telecom operators. Increasing the rates would only serve in the best interest of all parties involved. The Operators would expand, Tax would increase for the govt and more jobs.

  • Pakistan will skip to 5G over FTTH because too many right of way issues from local authority and delayed permissions. Veon should fix 4G and also focus 5G. 5G will be big disrupter in next few years to come.

  • Jazz ecare app Named Jazz world is also under development. A developer version of it is already available on Playstore and users can download and give feedback of it. Right now it has few bugs which hopefully soon will be resolved.

  • Companies have to make such decisions, hope it turns out well.

    Not so sure about JazzTube, but Jazz can do very well with platforms like Discount Bazar and Jazz E-Sell. These products have true potential as with the growing e-commerce industry. E-Sell is in the early phase, don’t know the numbers and market response, but its expected to do well in numbers along with JazzCash as the payment gateway. I see no other parallel ecommerce solution in the local market.

    • Exactly. The time is ripe for jazz to become the primary enabler of all sorts of digital services in the country just by the sheer size of its customer base.
      While competition is good, it must not lead to elimination of small operators because that would effectively meaning handing over monopoly to the big two in a silver platter.
      In an ecosystem where rich pay lesser money per call than the poor ones, govt should intervene and increase prices (quarterly basis) upon consuming more than, say, 250 minutes and 500 sms per month. I would say, rationalize telecom services just like electricity prices. It would at least discourage losers who continue to talk to their sisters all the time powered by dad’s money.

      Moreover, special cheap packages for OTT services like whatsapp should be eliminated. Let people buy full internet packages which are already cheap enough. It would certainly bring reluctant masses closer to regular internet usage – beyond facebook/whatsapp.

  • VEON was a useless app, it ruined my Contacts too many times. after uninstall i never re-installed it.
    No useful discount and offers on it.

  • VEON was a useless app, it ruined my Contacts too many times. after uninstall i never re-installed it.
    No useful discount and offers on it.

  • Operators first need to understand who they are. Entities who got a license to operate a wireless network in one country.They hired wrong MBA graduates, good in marketing but who were confused about business. They tried to become facebook youtube what’s app etc. Operators cannot compete with global services and even local digital services. Because service is meant for everyone but operators donot have access to all but only to its subscribers. People like myself with long telco background and industry understanding, experience from abroad could not even get interview call while people who sold soaps, cottons and lawn previously are running the tech companies and keep making foolish decisions. And jahil like this blogger are giving their opinion on this very techno economic deep industry.

  • Illusion Of Choice Warid & Jazz Are Owned By #VEON
    #Telenor International Owns 43% Stake In VEON

  • Shows how unprofessional JAZZ top management is… At first they market the product a lot and now that the product is a failure, they simply put the blame on parent company.

  • Zong also had options to launch their own such Apps but they focused on partnering with Big companies like Whatsapp, IMO, Facebook etc rather than moving away from their own core competency and try to compete with them… It was a good move by Zong

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