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Rostelecom and Gazprombank also plan to join the association. The market for commercial data processing centres (DCPs) in Russia expanded by 10.6% year-on-year in 2017 to RUB23.6bn ($345mn), with a total of 36,000 server points installed last year, while domestic B2B cloud services enjoy rising demand . Previously in October Rostelecom and Russian Union of Entrepreneurs and Industrialists (RSPP) have proposed the introduction of a special Virtual Economic Zone that would remove red tape and boost Russia's share on the global market of data centres from 0.9% to 5% by 2024. Reportedly Rostelecom and RSPP argue that Russian DCPs could be competitive globally thanks to competitive advantages such as cheap energy, low temperatures and lower cooling costs, inexpensive and qualified labour force, and solid quality of domestic data centres and IT systems. However, only an estimated 1% of Russian DCP market capacity is exported.
The controversial data storage law or "Yarovaya Law" that came into effect on October 1 is not properly implemented by telecom and internet operators, as they are not ready with implementing the massive data storage systems, Vedomosti daily reported on October 1. The legislation, authored by lawmaker Irina Yarovaya, requires that operators store recordings of users’ calls and online activities for six months under measures ostensibly aimed at combating extremism and terrorism. The availability of stored data to Russian security services has raised concerns about civil liberties, came in contradiction with EU regulations, while implementing the law risks to burden telecom companies with 0.5-1.0x additional leverage. But as of October 1 2018 the operators are lacking the normative base for implementing the law, which includes the characteristics, the certification process, and installation process of the required data storage systems, unnamed industry sources told the Vedomosti d aily. The Ministry of Communication and the Federal Security Bureau (FSB) have not yet defined the requirements for the data storage systems and access to the data storage network, the Russian Association of Electronic Communication (RAEK) confirmed. Previously the analysts surveyed by the Vedomosti d aily in the beginning of 2018 believed that enacting the law in 2018 is not realistic, as it would involves too much red tape for the government to handle and could take up to two years. Previously the daily claimed the law could be delayed to as late as 2023. Russian mobile operators MegaFon, Vimpelcom (VEON), and MTS estimate the five-year costs of complying with the lat at RUB40bn, RUB45bn, and RUB60bn respectively. MegaFon claims to have launched a pilot data storage facility in the city of Nizhny Novgorod, Vimpelcom claims it "coordinates the schedule of compliance with the authorities", while MTS declined to comment. MTS has recently acquired one of the largest Data Processing Centres (DPCs) in Russia in the Moscow Region for RUB8.9bn, which was linked by analysts to possible needs of processing capacity for the Yarovaya law compliance.
Russian state integrated telecom major Rostelecom and Russian Union of Entrepreneurs and Industrialists (RSPP) have proposed the introduction of a special Virtual Economic Zone that would remove red tape and boost Russia's share on the global market of data centres from 0.9% to 5% by 2024, Vedomosti daily reported on October 3 citing the operator. The market for commercial data processing centres (DCPs) expanded by 10.6% year-on-year in 2017 to RUB23.6bn ($345mn), with a total of 36,000 server points installed last year, while domestic B2B cloud services enjoy rising demand . Reportedly Rostelecom and RSPP argue that Russian DCPs could be competitive globally thanks to competitive advantages such as cheap energy, low temperatures and lower cooling costs, inexpensive and qualified
96 RUSSIA Country Report November 2018 www.intellinews.com