Why "Kyivstar" no longer wants to be just a telecom operator: exploring the motivations behind its recent acquisitions.

The beginning of 2025 has brought significant news for the largest mobile operator in the country. Initially, it became known that "Kyivstar" plans to acquire one of the leaders in the Ukrainian taxi market - Uklon. Subsequently, it was revealed that another company has caught its attention: the online medicine booking service Tabletki.ua. Preliminary estimates suggest that the operator is prepared to invest around $100 million in closing both deals.

As the fourth year of the major war approaches amid news regarding negotiations to freeze it, Kyivstar's investment ambitions inspire optimism.

However, many citizens are understandably questioning the rationale behind a mobile operator expanding into transportation and medicine booking businesses, a question for which there is no official answer. Ironically, one could suggest that the goal of such expansion is to deliver corvalol to Ukrainians who have been in a state of stress for the past three years. In reality, however, the company's actions are driven by purely pragmatic interests.

EP spoke with representatives from the investment and telecommunications sectors, as well as employees of "Kyivstar," to understand why the company feels "cramped" remaining just a mobile operator.

Why is "Kyivstar" acquiring companies?

In August 2022, when Russian troops were looming over Sloviansk and Kherson was under occupation, "Kyivstar" acquired a 69.9% stake in the largest Ukrainian medical information system Helsi for UAH 556 million. The news of this deal surprised the market not only due to active fighting in the country but also because of the Russian beneficial owners of Kyivstar - sanctioned oligarchs Mikhail Fridman, Petr Aven, and Andrei Kosogov.

Almost a year later, in July 2023, the state nationalized "Sens Bank" owned by Fridman and his partners. The question of possible nationalization of "Kyivstar" remained open. At the same time, according to sources in the company, proposals for acquiring Uklon were already being developed.

However, due to the risk of becoming a state-owned company, the largest mobile operator in the country had to postpone its acquisition ambitions. In October 2023, the Shevchenkivskyi District Court seized all corporate rights in Ukraine belonging to Fridman, Aven, and Kosogov, including shares in "Kyivstar."

For a time, protecting the company from potential nationalization became the number one priority for both the operator's management and representatives of its parent company Veon. After numerous court hearings, at the end of 2024, the same court lifted the seizure of 47% of Kyivstar's corporate rights.

Around this time, information began to emerge regarding the operator's plans to enter the American stock exchange Nasdaq, after which the information space was flooded with news about potential new deals. In January, it became known that the AMCU received a request from "Kyivstar" to acquire the taxi service Uklon. Subsequently, information about the company's intention to enter the medicine booking market surfaced.

According to Forbes Ukraine, the mobile operator submitted a request to the AMCU to acquire Tabletki.ua in November 2024 but was denied due to the seizure of its corporate rights. It seems that after the lifting of this seizure, "Kyivstar" may make another attempt.

Acquiring Uklon and Tabletki.ua - leaders in their segments - could cost the operator around $100 million. Why is this important for "Kyivstar"? Sources in the investment and telecommunications markets cite several motivations.

First is preparing for an IPO. Going public always carries the risk of underestimating or canceling. For a company whose assets and operations are concentrated in a country at war, these risks increase exponentially.

In an optimistic scenario, says Kyivstar's president Oleksandr Komarov, the company could go public in early Q3 2025. Until that time, every piece of news regarding acquisitions or collaborations, such as a deal with Starlink, could make it more attractive to investors. Telecommunications companies are generally less appealing on the stock market than technology companies that offer a range of services.

"The reason for Kyivstar's presence in the information field is to prepare for an IPO. Before going public, the company will continue to announce deals and contracts to increase its capitalization, investment attractiveness, financial expectations, and stock price. The deals with Starlink, and the acquisitions of Uklon and Tabletki.ua are just the beginning," believes eQualitie digital technology consultant Oleksandr Hlushchenko.

There is a high likelihood that the operator will attempt to acquire another Ukrainian business. A source at EP, previously involved in Kyivstar's mergers and acquisitions (M&A) department, claims that the search for profitable deals has been ongoing.

Indications of Kyivstar’s intentions to continue expanding are also evident in the formation of a small team dedicated to acquisitions. Some of these specialists joined the company only in 2025, reported Scroll.media.

A source at EP, who previously worked in the operator's M&A department, insists that the upcoming IPO is definitely not the company's main goal regarding acquisitions.

The second motive is the accumulated profits in the operator's accounts, which cannot be transferred abroad due to currency restrictions imposed by the National Bank.

Despite the war, in Q3 2024, "Kyivstar" generated UAH 10.3 billion in revenue - 17.9% more than in the same period of 2023. In 2023, even after a massive cyberattack, the company's revenue increased by 8% to UAH 33.58 billion.

The company has managed to achieve such profitability even amid significant investments in infrastructure. "Kyivstar" informed EP that during the major war, the operator invested approximately UAH 24 billion in network modernization, expanding 4G coverage, and ensuring energy security, including UAH 2.3 billion for preparations against potential blackouts. For comparison, the company invested UAH 210 million in the Helsi platform.

"Kyivstar has significant working capital, which amounted to UAH 12.7 billion in October. This money belongs to the owners, but it cannot be transferred to shareholders," notes Concorde Capital analyst Oleksandr Parashiy.

Keeping such funds in accounts amid current inflation is impractical. One of EP's sources, familiar with the financial situation at "Kyivstar," states that the company is investing some of its available funds in government bonds, although it does not comment on this.

Acquiring promising firms is an alternative to investing profits. Through businesses like Uklon, it is possible to enter international markets even during wartime. Although the co-founders of Uklon have not always succeeded in international expansion.

The third motive is strategic. It concerns technological leadership. "Kyivstar" states that investments in innovative technologies and services are one of its key development directions. With the resources to invest, the company is focusing on home internet and digital services. Given the specifics of the fixed-line market, it seems the operator has chosen to focus specifically on digital services.

What is "Kyivstar" building?

News about potential company acquisitions has sparked speculation about the transformation of "Kyivstar's" business. One of the most popular versions is the operator's evolution into a super-app.

A super-app is a multifunctional mobile application that combines a range of services: from ordering taxis and paying bills to online shopping and communication. The most well-known example is China's WeChat. A key element of such platforms is the payment system. This is why fintech companies are the most active players in this field. In Ukraine, Monobank is moving towards the super-app format, gradually adding new functions beyond traditional banking.

For mobile operators, this path is challenging and requires significant investments that do not always pay off. "No operator has yet achieved significant success outside its market, even after substantial