Page 16 - bne_Tech_02_2021

Telecom
February 2021 www.intellinews.com I Page 16
Russian telecom major Rostelecom could IPO cloud and data centre unit
Russian state-controlled integrated telecom major Rostelecom has unveiled its plans for the data centre and cloud business RTK-DC (Rostelecom Data Centers), in which the state- controlled VTB Bank acquired a 44.8% stake
in December 2020 for RUB35bn ($467mn).
Rostelecom mentioned that an IPO of RTK-DC was possible within the next three years, also noting that it intends to keep a controlling stake in the business.
"We believe the deal – and the IPO, if it happens – will allow Rostelecom to crystallise the value of its data centre and cloud businesses, which can be valued at higher multiples, thus leading to a higher valuation of Rostelecom," Sberbank CIB commented on January 27.
The proceeds of the VTB deal (carried out at
an estimated Enterprise Value/Oibda of 7.8x valuation, double that of Rostelecom) will be used to cut RTK-DC's debt, as well as to fund future capex and investments, including a regionally distributed data centre network and new cloud solutions.
"According to Rostelecom, the key driver of RTK-DC's growth will be the shift of state and corporate clients of various sizes into subscription models for IT and cloud services," Sberbank
CIB wrote following the conference call of the company.
Growth is also expected to be supported by the expansion of digital economy projects aimed at meeting the demand for storing and processing digital data from mobility, AI, analytics, IoT and edge computing.
Rostelecom expects RTK-DC's revenues to reach RUB45 by 2025, which implies a 13.4% annual growth in 2020-2025, while it sees the Oibda margin expanding 5 percentage points to 45% over the period, driven by economies of scale, the subsidiary's development of its own software products and a growing share of value-added services.
While the IPO opportunity remains remote (2023), it is still seen as positive for the sentiment for Rostelecom, BCS Global Markets commented
on January 27. RTK-DC is the largest player in the Russian data centre market and has strong positions in the cloud market (IaaS, PaaS), the analysts remind.
The company had respective 25% and 26% market shares in 2020 in data centre and cloud IaaS markets, according to Rostelecom and iKS- Consulting. Its revenue comes from the B2B (60% total revenue) and B2G segments (40%).