Page 7 - bne_Tech_06_2020

Leaders
June 2020 www.intellinews.com I Page 7
Meanwhile, players in the Russian IT sector have reportedly expressed doubts about Sberbank's project, prompting VTB, Rostelecom and Russian Post to push their idea more actively.
Running a platform for state services is a potentially lucrative business, which explains why major Russian companies are so eager to get involved.
Every major Russian cloud service provider would be interested in a project of that scale, Sergei Vikharev, director of innovative technologies for Russia and CIS at KPMG, was quoted as saying by Kommersant.
"Now, Russian state agencies spend dozens of billions of rubles to support their own services and infrastructures, and this could be optimised by uniting data and removing duplication of functionality," he added.
According to Ivan Begtin, chairman of the Association of Data Market Participants, proposals for a state service platform also compete with the existing, RUB20bn ($259mn)-a-year market for IT integration companies and data services.
Incidentally, several months ago, VTB and Rostelecom announced another joint IT project – a big data platform that they expect to offer as a service to various companies and organisations.
Russia's Yandex to launch 100 driverless cars in Moscow
Russian internet major Yandex in partnership with Hyundai Motor CIS and Hyundai Mobis will launch 100 driverless Hyundai Sonata vehicles on public roads in Moscow and the US in 2020, Kommersant daily reported citing Yandex representatives.
As reported by bne IntelliNews, Yandex is Russia's leader in driverless technology. The addition of another 100 vehicles would mean almost doubling its fleet of 100 driverless cars, that have already accumulated over 2mn miles (3.2mn km) on public roads.
Kommersant quoted a Yandex representative as saying that on a three-year horizon, a new self- driving car would be more efficient on a cost (compensation) basis than two drivers working in eight-hour shifts.
Yandex is effectively the only company in Russia working on the Level 5 automation at this scale, VTB Capital (VTBC) reminded.
VTBC estimates that net driver earnings could amount to over a third of bookings (excluding
VAT) in Yandex’s ride hailing business (Yandex. Taxi), which compares with the estimate of the company’s effective take rate of 12% in 2019.
The bank also believes that the economics of self-driving cars will keep improving on lower hardware costs (primarily LIDARs).
"Coupled with potential ‘fifth-screen’ revenues (SDCs are seen as a new platform for advertising, shopping, entertainment etc.), we believe that the new technology represents a multi-billion dollar business opportunity in the long term, which more than justifies front-loaded investments," VTBC argues. To remind, Yandex tripled its investment in driverless y/y to $23mn in 2019.
In the best-case scenario VTBC sees self-
driving cars as local taxis on public roads as
early as 2023, provided the necessary regulation is in place. The bank reiterated the Buy recommendation on Yandex with 12-month target price of $53 per share, implying an estimated total return of 29%.