Home news The mobile operator believes that the purchase of & # 39; Russian...

The mobile operator believes that the purchase of & # 39; Russian Netflix & # 39;

One of the "big four" Russian operators MobileTeleSystems (MTS) is considering the acquisition of 36% of the so-called "Netflix Russian", provider of online cinema therein, for 20 billion rubles (309 million dollars), the RBC news site reported, citing anonymous sources.

The news confirms that the "race to create the Russian Netflix has intensified", commented Sberbank CIB, adding that the internet Yandex has also expanded its video content service portfolio.

Since its launch in 2009, ivi.ru – known as "Ivy" in Russia – has quickly become the country's leading site for viewing movies legally. Revenues have doubled every year and the company is widely regarded as a candidate for a billion dollar IPO in the not too distant future.

"We are positioned in the world of cinema and closer to Netflix than [US online TV broadcaster] Hulu, but we also have some TV shows, music and a portal for children. But movies are our main feature, "said Oleg Tumanov, CEO and president of ivi.ru, in a rare and exclusive interview with IntelliNews bern in 2013.

Since then, the company has made great strides. It recorded a 62% year-on-year increase in revenue to 3.94 billion rubles in 2018, surpassing a market that expanded by 45%. About 70% of the revenue therein comes from user payments, which represent the highest growth category for the company, with 87% year-over-year earnings, while the rest mainly concerns advertising revenues.

For MTS, there could be a valuable addition to its portfolio of non-mobile services, continuing non-core acquisitions such as ticket services Ticketland.ru and Ponominalu.ru, Sberbank said.

The agreement therein "would be in line with MTS's strategy to strengthen its experience in adjacent areas through acquisitions" Global BCS markets said, seeing the 20 billion rubleprice tags that suggest 5 times 2018 revenue as reasonable.

At the same time, the agreement could put pressure on MTS's free cash flow, Sberbank warned, pointing to a similar model already seen as a result of merger and acquisition activity in the operator in 2018.

In the fourth quarter of 2018, MTS recorded strong revenue growth according to international financial reporting standards, with maximum line, profits and profits that exceeded consensus expectations. The company has managed to keep its revenues for mobile services in Russia growing, despite the entire quarter of cancellation of intra-community roaming.

The media market in Russia is generally growing rapidly, driven by the burgeoning e-commerce sector. The media market grew 12% year-on-year to 468.7 billion rubles in 2018, according to estimates by the Russian Advertisers Association (AKAR), VTB Capital (VTBC) said in a note the ;March 11th.

AKAR has revised its approach to the presentation of Russian media market estimates. Since many media market actors distribute their content through different means, AKAR has decided to break down market estimates by type of content.

According to AKAR's new approach, the internet services segment recorded the fastest growth, with a 22% increase, accounting for 38% of the market in 2018.MT

This article first appeared in bonne IntelliNews.

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