MTS will gather all its IT departments into an independent company

MTS has begun restructuring its business, during which all IT departments will be included in a new independent structure, MWS (MTS Web Services). In addition to the cloud division and the data center division, it will include the areas of artificial intelligence, cybersecurity and others. Kommersant reported this with reference to its own sources.

Image source: mts.ru

The MWS company (AO MVS) was registered in Moscow in 2021 – it is part of the MTS group of companies. As part of the ongoing restructuring, MTS Digital, MTS AI, MWS itself (formerly MTS Cloud), Big Data, the cybersecurity division and VisionLabs, which develops computer vision systems, will unite under the MWS brand. The new company will become an independent player in the IT market, and by 2030 its revenue is expected to grow to 230 billion rubles. According to one version, MTS may list the company on the stock exchange in order to attract additional investments, but the timing is not specified.

Currently, the MTS cloud division is responsible for 15 data centers; at the end of the third quarter, this area showed an increase of 42%, but the company did not provide absolute figures. Across MTS PJSC, revenue for the third quarter increased by 15.3% year on year and amounted to 180.4 billion rubles, net profit fell by 88.8% to 1 billion rubles. (was 9 billion). In September, MTS President Vyacheslav Nikolaev said that in the next few years he would list up to five companies on the stock exchange – one of the first should be the advertising direction of MTS Ads.

After restructuring, MTS can attract a strategic investor to the IT department; the new structure will be able to develop more intensively with less regard for the internal tasks of developing and supporting ecosystem services – now the ecosystem is holding back its development, and the company cannot withstand competition. Large players often list their divisions on the stock exchange, say experts interviewed by Kommersant. This helps reduce the debt burden and free up cash flow for dividends, which is important for MTS. The company, like other operators, has a significant debt load: as of November 19, its net debt amounted to 460 billion rubles, while “MTS pays high dividends, and the stock market fears that they will decrease in the future,” experts point out.