Mobile operator VimpelCom posted a net loss of just over $1 billion in the third quarter thanks to a $900 million provision announced last week related to ongoing investigations into the company’s operations in Uzbekistan.
The company, which is Russia’s third largest wireless operator and maintains operations in Italy and several other markets, saw its revenue for the quarter drop 31 percent year over year to $2.44 billion. Revenues from Russia, the company’s largest business segment, were down 43 percent year over year to $1.15 million. Overall EBITDA for the quarter was down 96 percent to $58 million.
The company reportedly had 195.3 million total mobile customers in the third quarter, a dip of one percent year over year. VimpelCom’s number of fixed-line broadband customers remained steady year over year at 3.6 million.
As previously reported, VimpelCom is under investigation by the U.S. Securities and Exchange Commission, the U.S. Department of Justice and the Dutch Public Prosecution Service in relation to its business in Uzbekistan and prior dealings with Takilant Ltd. Despite VimpelCom’s $900 million provision to deal with the investigation, the company said there can be “no certainty as to the final cost to the company” or the “timing of a definitive resolution.”
In the wake of the investigation, Norwegian telecom company Telenor announced plans to sell its stake in VimpelCom to focus on its core operations.
Yesterday, the Wall Street Journal reported that Norwegian prosecutors were detaining former VimpelCom chief executive Jo Lunder for questioning on suspicions that he was involved in corruption related to the company’s Uzbekistan operations. Lunder was chief executive at VimpelCom from 2011 to 2015.