Mobile operator Kyivstar was subjected to a ‘widespread hacker attack’ yesterday morning, per an announcement from parent company VEON. Telephony and internet services were unavailable, causing knock-on disruption of other services including bank teller machines and card terminals. Fixed-line services were briefly restored yesterday evening but the network soon went offline again. The relative good news is that VEON said there was no evidence of any customer data being compromised.
The obvious suspicion is that the hackers were working on behalf of Russia. VEON’s announcement says nothing about the identity of the hackers but Kyivstar CEO Aleksandr Komarov (pictured) said on national television that the hack was a result of the war between Ukraine and Russia. Komarov also said Kyivstar’s IT infrastructure had been ‘partially destroyed’. Ukraine’s SBU security service told Reuters that the possibility of a cyberattack by Russian state actors was one of the scenarios it was investigating. Several parties described taking Kyivstar offline as the biggest cyber attack of the war so far.
VEON’s announcement noted that “the exact magnitude of the financial impact is not yet quantifiable as it will depend on how long services are impacted”. It was promised that customers would receive compensation for the outage. Komarov stated that Kyivstar had ‘physically’ shut down infrastructure to limit the hackers’ ability to access systems, implying it will take considerable time to restore normal operations. Per his account, two databases containing customer data were locked after they had been damaged by the attack.
Kyivstar has 24 million mobile subscribers, slightly over half of Ukraine’s population. There are also 1 million subscribers for its home internet services. It belongs to Amsterdam-headquartered VEON, which also runs telecoms operators in four Asian countries. VEON started its existence as Vimpelcom, the first mobile operator in Russia, then engaged in various deals to enter and exit several national markets. VEON’s share price only fell marginally following news of the attack on Kyivstar and was slightly up at the end of yesterday’s trading. The largest shareholder in VEON is AlfaGroup, a Russian financial investment conglomerate, which has a 47.85 percent stake. The ownership of VEON is unlikely to have been a consideration that influenced the hackers’ choice of target.
