Rostelecom Board approves acquisition of DataLine

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Moscow, Russia – November 20, 2019 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), announces that its Board of Directors has granted approval to its subsidiary Rostelecom Datacenters to acquire a 100% share of DataLine, the second largest datacentre provider in Russia after Rostelecom.

The acquisition enhances Rostelecom investment case thanks to the following factors:

  • DataLine is a fast-growing business with high prospects supported by:
    • the average annual revenue growth rate of more than 20% over the last 4 years;
    • ambitious capacity expansion plans with expected construction of additional 1,000 racks by 2020;
  • DataLine owns a developed IaaS[1] services ecosystem, which will further strengthen Rostelecom’s position in the cloud segment;
  • Rostelecoms competitive position in the corporate segment will be improved through more than 500 additional unique corporate clients brought by DataLine.

DataLine is one of the largest players in the data centres and cloud markets in Russia and provides collocation and virtualization, telecommunications and other auxiliary services. 2018 revenue amounted to RUB 5.3 billion. Through DataLines management of eight Tier III data centres and 4,800 racks in total, this acquisition will increase Rostelecoms total capacity of commercial data centres to 11,500 racks, and see it secure a significant share in the commercial data centers market (at the end of 2019 the total number is expected to stand at circa 42,000 racks[2]).

The deal is in line with Rostelecoms strategy to develop a geographically diversified network of data centres and an ecosystem of cloud-based digital services for corporate and government clients. The combination of infrastructure, products and professional services of both companies will enhance the cloud services offering (SaaS / Iaas / PaaS), and strengthen Rostelecoms role in the implementation of the Digital Economy project.

Mikhail Oseevskiy, President of Rostelecom:
“The acquisition of DataLine is in-line with the global trend of consolidating cloud providers and creating large-scale infrastructure and product ecosystems that provide the most competitive and high-quality digital services. This strategic transaction will enable Rostelecom to significantly increase its share of high-margin cloud products in total revenue as corporate and state clients are increasingly transitioning to a business service model in IT amid the digitalization trend and the development of the States Digital Economy projects.”

Pavel Kaplunov, Vice President for Cloud Services:
DataLine will significantly strengthen our competitive position, contributing to Rostelecoms unrivalled leadership in the promising date centre segment and cloud providers which is growing at a double-digit pace. Joint competencies will ensure the sustainable development of our cloud ecosystem and the portfolio of products, services and solutions for our customers.

[1] Infrastructure as a service is one of the cloud computing service models, which provides clients with underlying IT infrastructure, such as virtual servers with pre-set computing capacity, operation systems and access to networks;

[2] Based on the IKS Consulting data at the end of 2019