Page 97 - RusRPTNov18

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 Virtual Economic Zones would help tackle that through eased red tape on exports activities, simplified currency controls, waiving VAT and excise duties for importing equipment. However, the lack of trust of foreign consumers in Russian IT solutions would have to be addressed separately through targeted campaigns. Foreign residents would be able to profit from such regime at minimum investment of $30mn, while Russian residents would have to invest at least 10% of revenues in exports facilitation.
Internet-based businesses have become the fastest growing advertisers on Russian TV , in January-September 2018 boosting the volume of ads placed 2.5-fold year-on-year, Vedomosti daily said on October 3 citing the estimates of National Advertising Alliance (NRA). Reportedly internet companies accounted for 5.2% of TV ads market, which would translate into about RUB6.5bn on the RUB130bn market as of end of September 2018, as estimated by the daily. The bigger ad volume on TV is attributed to only pharmaceuticals, banks, and telecom operators. Industry sources told Vedomosti t hat through TV ads online services are trying to reach and capture an audience that is not yet active in the digital economy. At the same time, while TV placements remained the largest segment of the total ads market with RUB171bn in 2017 (up by 13%), Internet advertising has almost caught up with TV increasing by 22% y/y to RUB166bn and beating TV market in terms of growth pace for the second consecutive year. In 2017 Russian advertising market grew by 14% year-on-year to RUB417bn ($7.3bn), posting the second year of growth in a row, according to Association of Communication Agencies of Russia (AKAR). AKAR expects Internet to beat TV in 2018, following the general global trend. Internet segment is also characterised by higher proportion of SMEs advertisers.
9.1.8 Telecoms sector news
Russia will change the rules of granting 5G frequency licences for telecom operators , switching from federal or regional licences to more targeted coverage of local objects and projects, the Deputy Minister of Communication Oleg Ivanov told Vedomosti d aily on October 24. The new procedure of auctioning off 5G frequencies might start in December 2018, possibly adding competitive pressure among Russia's biggest operators. In the next five years the costs of 5G implementation in Russia for the operators could amount to RUB300bn ($5bn), the COO of MegaFon and the head of Russia's newly established big data association Anna Serebryanikova estimated. A study by PricewarterhouseCoopers estimated that in 2020-2027 5G costs for the operators would amount to RUB550bn-610bn should all operators create their networks separately, RUB400bn-445bn should two operators use 70% of all stations, and RUB330bn-365bn should all four large telecom operators (MegaFon, MTS, VEON, and Rostelecom) create an integrated 5G network. The estimates, however, did not account for the possibility of granting 5G licences only locally. The “Digital Economy” program approved by the government targets a 5G roll out in all large Russian cities with over 1mn population by 2020.
9.1.10 Utilities sector news
97 RUSSIA Country Report November 2018 www.intellinews.com
Russian nuclear corporation Rosatom will build six nuclear power units