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Investment
October 2018 www.intellinews.com I Page 11
Russia's MTS mobile major acquired data processing center
Russian MobileTelesystems (MTS) mobile major acquired 100% in Avantazh Data Processing Centre (DPC) in the Moscow Region for RUB8.9bn ($131mn) including net debt of the acquired company.
The DPC is 80% constructed and is planned for 2,240 server points, making it one of the largest of its kind in Russia. Avantazh will become the 10th DPC in the federal network of processing centres.
The acquisition will strengthen MTS positions on the growing and competitive market of B2B cloud services, Uralsib Capital commented on Septem- ber 17. The analysts also do not exclude that MTS will use the DPC to comply with the recently intro- duced controversial data storage 'Yarovaya' law.
The market for commercial DPCs has expanded by 10.6% year-on-year in 2017 to RUB23.6bn, with a total of 36,000 server points installed last year.
Uralsib reiterated the Buy recommendation on MTS, noting that B2B cloud services development is strategically justified given the minimal growth rates of traditional operator's revenues. However,
the analysts remind of sanctions risks due to past rumours that MTS main shareholder AFK Sistema could become the target of US sanctions.
Most recently Russian internet services major Yandex launched its B2B platform for cloud ser- vices Yandex.Oblako (Yandex.Cloud).
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 Roskom- nadzor watchdog against Telegram messenger, Vedomosti daily reported on September 6 citing unnamed market sources.
It is estimated, however, that Amazon still has about 10% of the cloud services market in Rus- sia. The market in 2018 is estimated at RUB12bn ($173mn), growing from RUB10bn in 2017 and RUB8bn in 2016, and estimated to increase fur- ther to RUB14bn and RUB15.6bn in 2019 and 2020, respectively (as estimated by Forester Russia, counting Infrastructure as a service
IaaS services volume).