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networks reached RUB591bn ($9bn) through March 2018, with an average receipt of RUB1,500, Vedomosti said on November 23 citing the data of Yandex.Kassa and Data Insight. The turnover of such sales is comparable to RUB1.04 trillion of official e-commerce in 2017. The main product segment of such peer-to-peer sales was apparel and footwear. As of January 2019 the Russian government started an experiment with new self-employed fiscal status in Moscow, the Moscow and Kaluga regions and Tatarstan, cutting the income tax to 4-6% and introducing a billing app that would automatically transfer the tax. The initiative is aimed at increasing the tax revenues from "social" e-commerce, with the Federal Tax Service eyeing integration with large platforms such as Yandex.Taxi, YouDo, Profi, Yula, and Airbnb. The biggest sales channels according to the study are Avito and Yula online classifieds portals, followed by social networks VKontakte, Instagram, and Odnoklassniki, as well as sharing economy platforms such as YouDo, Profi, and others. About 6% of "social" e-commerce is done in messengers, such as WhatsApp, Telegram, and Viber. Over half of the sales overall are of second- hand goods, with 12% of the sellers seeing revenues from such sales as substantial. Avito estimates that in the past 12 months about RUB1.27 trillion of goods and services were sold on the platform, about 1% of forecasted 2018 GDP. Out of that, sales by private individuals amount to RUB380bn, up from RUB300bn in 2017.
In 180 days, a law signed by PM Dmitry Medvedev mandating that messenger apps verify users' phone numbers and personal information in 20 minutes will take effect. Each user will then be given a unique identification code. This initiative will allow the government to quickly track users posting political content via messenger apps, thereby challenging younger Russians' perception of the internet as a space that enables political speech despite tight state controls over traditional media. There undoubtedly will be attempts to subvert the law by fiddling with user data in real time as much as possible. This initiative will galvanize some response, likely seized upon by figures like Navalny, next spring. Money for digitalization will then have to be spent by telecoms operators to improve the efficiency of tracking users as they attempt to find ways around the law.
Luxoft’s 2Q19 (ended 30 September 2018) results beat the consensus on profitability, but the company’s inability to reignite growth – implied by its guidance for 3Q19 (ending 31 December) and the overall outlook for 2H19 (ending 31 March 2019) – likely led to the stock’s 14% decline yesterday. We see this as an overreaction, as a few fresh challenges hardly imply such price moves. Having fine-tuned our model, we leave our 12-month Target Price of $50 unchanged, which implies an ETR of 50%. Thus, we see the recent share price decline as an attractive entry point and upgrade the stock from Hold to Buy.
9.1.8 Telecoms sector news
Russian state-controlled integrated telecom major Rostelecom, mobile operator MegaFon, and state technology corporation Rostec are considering joining forces to develop 5G networks in Russia using domestic technology, Kommersant daily reported on November 20 citing unnamed market sources. Russia is preparing to start the rollout of 5G networks, but the restrictive cost of the new generation technology has until now kept the specific plans unclear. Most recently the government suggested granting 5G frequencies on per-object basis to lower the high cost of carpet
92 RUSSIA Country Report December 2018 www.intellinews.com