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IT-services industry
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Industry’s key highlights
TMT industry (incl. information and communication technologies, IT sector) is one of the fastest growing industry of the Belarusian economy, and recently it has acquired strategic importance for the country's economy. It has the highest level of integration into the global economy compared to other sectors and industries in Belarus. It has opportunities for rapid sustainable development in the near future.
Belarus has created special conditions for the development of information and communication technologies, and especially IT services. In 2005, High Technology Park was founded, which became the main driver of the IT market in Belarus. The result of the existence of this Park was: the export of IT services have exceeded USD 1 bn (it has increased by 5 times since 2011); the number of employed employees have exceeded 40,000; the number of residents have exceeded 260 (since 2011 it has increased by 2.5 times).
ICT industry is constantly developing and improving its performance: in 2017, the gross value added of ICT sector exceeded USD 2.5 bn (+60% in comparison with 2011), and the share of ICT in GDP reached 5% (for the last 6 years it has increased by 2.2 percentage points). Geographically, the center of the ICT industry (and especially IT services) is Minsk (the share of ICT in a regional product exceeds 12%), which is associated with a developed infrastructure of IT services and staff availability (about 85% of total employed in ICT belongs to Minsk city).
ICT industry is represented mostly by private companies of various sizes (from micro- to large companies). Representatives of this sector can be EPAM Systems, BelHard, NAUCHSOFT, ITransition, Viber, Microsoft offices, Yandex, Mapsme and others.
Telecommunications sector has been actively developing in Belarus over the past 10 years, showing an intensive growth in Internet penetration (the internet subscribes has been increased by +74% over last 6 years; and legal entities by +71%). The sector is represented by different companies: the largest state provider of telecommunications services (Beltelecom), providing a range of services (telephony, cable TV, Internet, and other telecommunication services); private companies previously providing cellular services and recently they have transformed their business model into telecommunications companies (MTS, Velcom, Life).
Investment in the industry
Given the specifics of the entire industry, especially the IT services sector, which creates products or projects for the purpose of their development with the help of investors from different countries, the sector is interested in both venture investors and funds, as well as strategic buyers, business angels and private companies.
The telecommunications sector is primarily interesting for strategic investors who are developing their telecommunications network in the region or within the country. Large telecommunications companies are investing in the development of their business in the country (creation and modernization of infrastructure, creation of data centers, etc.).
Over the past 5 years, investments in ICT sector have exceeded USD 2.5 bn, while foreign investments in the same period have exceeded USD 5 bn. The companies have different directions of investment, however, they aim at the continuous modernization of infrastructure (transition of cellular operators from 2G data transmission standards to 3G and higher one), expansion of their business activities in its sector (Internet providing, cable TV, communication services), infrastructure development (data centers etc.), as well as the development of other high-tech industries (for instance, renewable source energy industry) and other projects.
UNITER’s competence in the industry
In recent years, there has been a surge in interest of international investors in the Belarusian companies of the TMT segment. A number of large Belarusian companies have begun the process of internationalization, including through the purchase of businesses abroad.
UNITER Investment Company is ready to offer its knowledge and experience in the implementation of M&A transactions and fund raising for business growth to Belarusian companies. In addition, having a wide network of partners, including large investment banks, in various regions of the world, the company has the opportunity to assist in acquiring businesses abroad.
The specialists of UNITER Investment Company have participated in preparing of cable television and Internet providers market research in Belarus for AKADO Telecom (one of the largest telecom operators in the Moscow region, offering integrated telecommunication services); making world’s marker research of cable and Internet technologies for consumers; preparation feasibility study of modernization the infrastructure for telecommunication services operator (MTIS).
The company has provided services in the following projects: support of a local private company of media sector within sell-side transaction (strategy development, transaction support as a financial advisor); Sell-side Due diligence for one of the leading companies in electronic commerce (banner advertising, classification, online comparison); Due dilligence of the company's activities to form its fair business value for strategic decision making (one of the largest online media).
The company uses the experience of financial advisory and existing contacts for the implementation such projects as: development of business plans for residents of High-Tech park; Market analysis of electronic and mobile payment systems in Belarus for IT company (Bamboo Group); development of an investment memorandum, attraction of foreign investors and support of a transaction on start-up projects at the regional and international levels.
Disclaimer
These industry outlooks were prepared for informational purpose only and does not constitute an offer or solicitation of a strategic transaction. Points of view, forecasts and evaluations presented in these outlooks reflect our opinion as of the publication date and may be changed without notice. Although the information contained herein has been obtained from sources we believe to be reliable and although we ensured their accuracy as of the publication date, we cannot guarantee, expressly or impliedly, practicality of these outlooks regarding future events or current or future value evaluation. Any investment decision based on these outlooks should be made only at the discretion of the investor and UNITER or its employees or any third party shall not be responsible in any form and in no circumstances for any action of any party taken on the basis of these outlooks. Nor UNITER, nor any of its employees, nor any third party shall be responsible for losses that result from such actions.
