(Bloomberg) -- Veon Ltd., the third-largest mobile-phone operator in Russia, may need to freeze its network rollout in the country if sanctions over the war in Ukraine continue to block imports of essential equipment, according to Chief Executive Officer Kaan Terzioglu. 

“There is no doubt that the deployment will slow down and almost has a risk of coming to a standstill,” Terzioglu said in an interview after Veon’s earnings report, adding the sanctions affect all market players. “Our network in Russia is the most modern network as it was rebuilt especially over the last two years.”

Veon was founded in Moscow in 1992 as VimpelCom, one of the nation’s first cellular-phone providers, and is now a Dutch-domiciled telecommunications company serving over 220 million customers in eight countries. It is the largest mobile operator in Ukraine, and two of its employees there have died in the fighting since Russia’s February invasion.

The telecom reported last week second quarter revenue rose 5.6% from a year earlier to $2.01 billion, with nearly half coming from operations in Russia. Veon is holding talks with potential buyers to sell more towers in Pakistan, Bangladesh, Kazakhstan, Uzbekistan and Ukraine, according to Terzioglu. 

“Towers should be in the hands of independent tower companies,” Terzioglu said. “We are progressing on monetization of these tower assets.” 

Last year, the company sold over 15,000 towers in Russia for around $970 million to Service-Telecom LLC. The company has around 30,000 more towers to sell, Terzioglu said. 

Bond Payments

Veon has over $1.2 billion in bond repayments due February and April 2023. The company is planning to use $682 million from the sale of its Algerian branch, Djezzy, to cover part of the payments, Chief Financial Officer Serkan Okandan said in the same interview. The rest will be paid using some of the $1.9 billion in the company has at its headquarters in Amsterdam and money from dividends that its local subsidiaries pay, he said.

Veon is not planning to “tap the market at an HQ level in the short term,” Okandan said. “Until the end of the year, we’re focusing on local financings” in markets like Pakistan, Bangladesh, Kazakhstan and Uzbekistan, he said.

LetterOne Investment Holdings, founded by Russian billionaire Mikhail Fridman, owns 47.9% of Veon. Fridman was recently sanctioned by both the European Union and the U.K., and stepped down from the boards of Veon and LetterOne.

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