MTS will get into smart transport – Newspaper Kommersant No. 52 (7497) of 03/28/2023

MTS has agreed to consolidate another asset in the Internet of Things (IoT) segment. In April, the operator will close a deal to buy control in the St. Petersburg company Proektnaya Sreda, which develops telematics for commercial vehicle fleets. The amount of the transaction may be about 1.5-2 billion rubles. Experts consider the asset a logical addition to other MTS enterprises in the field of IoT and telematics, but note that the demand for such solutions now depends on factors not related to the telecommunications business.

MTS intends in April to close a deal to acquire control (more than 50%) in the Project Environment group of companies, which develops solutions in the field of the Internet of things for transport, says a Kommersant source close to the negotiations. According to him, the operator intends to strengthen its position in the transport telematics market as a result. He estimates the amount of the transaction at 1.5-2 billion rubles. MTS declined to comment, in the “Project Environment” they did not respond to Kommersant’s request.

According to its own data, LLC is developing solutions to improve road safety (GPS / GLONASS car trackers, cameras for monitoring the work of drivers, etc.), software for monitoring fuel consumption, etc. Project Environment supplies software under the brands “SCOUT—Corporate Solutions”.

This is not the first MTS deal in the auto electronics and telematics market. In October 2022, the company bought Navitel, a developer of navigation systems for cars, and in February it became known that it intended to launch the production of a touch-screen multimedia system with navigation for cars in Tver (see Kommersant on February 2). Also, in early March, MTS structures (“MTS Auto”) acquired 100% of Dee Wai Technologies, which develops and manufactures auto electronics (see “Kommersant” dated March 23).

MTS has recently been expanding its presence in the market of IoT solutions for business, and is also moving into the transport sector, and in such conditions the deal looks logical – the company will be able to provide customers with this product as part of integrated solutions, says automotive analyst Vladimir Bespalov. At the same time, the expert notes that the demand for the solution will also depend on its effectiveness in terms of cost reduction.

The transport monitoring market in Russia is generally competitive and is represented by several leading Russian solution providers in addition to SCAUT (OMNICOMM systems, Navtelecom, AvtoGRAF), says Dmitry Kornachev, Executive Director of the Association “Consortium of enterprises in the field of automotive electronic devices and telematics”. The demand for such solutions in the coming years, the expert believes, will depend on three factors: a recovery in demand for trucks and light commercial vehicles, an increase in the level of penetration of telematics systems and an increase in their functionality, as well as the availability of free funds from fleet owners.

This deal is more likely a “purchase of client revenue” and a brand known in the segment, rather than a unique technology, says Dmitry Petrov, CEO of Comfortel telecom operator. The expert adds that the asset may allow MTS to increase revenue in the mobile data segment, since after the purchase, the vendor will only use the services of the operator, and not third-party telecom operators.

Dmitry Kornachev also notes that the restriction on the supply of new vehicles may become a negative factor, although this may be leveled: “The presence of demand for new equipment, among other things, depends on state support, for example, preferential leasing programs for trucks.”

Tatyana Isakova, Olga Nikitina