Page 90 - RUSRptOct18

least 50 people.
9.1.7 TMT sector news
The costs of digitalization plans have doubled . The Council for Strategic Development and Priority Projects approved the national program on the development of the digital economy on September 17. According to the Minister of Communications, the program will cost the federal budget RUB2 trillion ($29.5bn) by 2024 and will aim to attract RUB1.5 trillion ($22bn) in private funds. Costs for proposed plans have almost doubled, now reaching RUB2 trillion ($29.5bn). That's unsurprising. Now that the spending plan has been approved, we should see the first stages of who wins the various fights over state rents. But rents aside, many companies will seek tax breaks and cheap credit to pursue relevant spending plans.
· In August, documents prepared by the Ministry of Finance foresaw RUB1.2 trillion ($17.7bn) in government outlays for the program.
· RUB820bn ($12bn) of the government’s currently pledged RUB2 trillion has already been found—set aside for a previously-approved program on the computerization of state bodies.
· RUB110bn ($1.6bn) earmarked for the further development of the Mir card payment system will also make up a portion the program’s budget.
· While business may hope for preferential lending to help attract the RUB1.5 trillion in private funds, experts note that state-subsidized loans would constitute quasi-public financing and, thus, further increase federal expenditures.
The Russian subsidiary of the Austrian bank Raiffeisenbank has set up the first ever mortgage registry based on blockchain, using a decentralised deposit system (DDS) Masterchain, Vedomosti daily reported on September 24. Masterchain is a platform developed by the Central Bank of Russia and the large commercial banks in the Fintech association. RIA Novosti also reported that Sberbank already tested the platform with a similar deal. Reportedly using the DDS will increase the safety of data storage, cut the depository costs, and speed up the transactions for both the clients and the bank. The electronic registries are now officially allowed in Russia as of July 1 2018 under the amendments to the Mortgage Law.
Russian B2B cloud services enjoy rising domestic demand, as many of the chose to migrate from Amazon and Google cloud solutions after those were disturbed by the war waged by Roskomnadzor watchdog against Telegram messenger , Vedomosti d aily reported on September 6 citing unnamed market sources. Most recently Russia's most valuable tech company Yandex announced launching its own cloud services platform Yandex.Oblako (Yandex.Cloud), that was tested by over 50 major local companies, such as X5 Retail Group, Tinkoff Bank, S7 airlines, and others. The market for cloud services is crowded, with Vimplecom (VEON) mobile operator having its service Beecloud launched in April 2018, and reportedly boosted the number of clients by a third and doubled the revenues. Cloud solutions of MTS mobile operator saw 40% bump in subscription, the same is valid for another major operator MegaFon. Cloud business of Mail.ru saw growth of "tens of percents" from the beginning of 2018, the company's representatives told Vedomosti. It is estimated, however, that Amazon still has about 10% of the cloud services market in Russia. The market in 2018 is estimated at RUB12bn ($173mn),
90 RUSSIA Country Report October 2018 www.intellinews.com