Tag Archives: russia

Russian sites and services banned in Ukraine

Russia and Ukraine have had very tense relations since the last several years, and it seems currently relations are at all time low. As a result of that, Ukrainian president Petro Poroshenk signed on Monday a decree which prevents the operation of Russian sites and online services in Ukraine.  To be precise – a so called web sanctions apply to 468 legal entities and 1228 individuals from Russia.

It is a well-known fact that majority of the most popular sites and online services come from Russia, and two online groups Yandex and Mail.ru owns the biggest number of those popular services. Ukraine users will not be able to use Yandex, Mail.ru. and services like Odnoklassniki (OK) and Vkontakte (VK) which are part of Mail.ru Group and many services from Yandex like search engine, maps, taxi app etc.

Both Yandex and Mail.ru said that this decision will not have significant effect on their financial results.  Mail.ru rep. expressed dissapointment with this and called it as “clearly politically-driven decision”. Around 25 million Ukrainian users will be affected, who regularly use online services from Russian companies.

This will give opportunity to local and foreign companies to gain better market share in the Ukrainian market. From the Ukrainian community many are against this decision and call it as “censorship”.

UMER, a Russian ‘Uber’ for the deceased

Umer is a new app coming from Russia and made by Dmitriy Geranin whose purpose is to support people organize funerals for their loved ones. It is as convenient as transportation application Uber, but it assists you in organizing funerals, not rides.

A user selects the search key parameters by choosing the ritual and all the needed funeral accessories such as coffin and wreaths. Additionally the application helps to become familiar with current prices and a broad scale of funeral market. The application’s name is a play on “Uber”, shifting just a single letter to convert it into the Russian word for “Died”. There had been a few longer versions of the name, like “Kto-to umer” (“Someone has died”). Finally the creators decided to have a shorter and more brief and clear “umer” (“died”). The app is easy in use: there are a couple of fields to enter, providing information on who died and when, his or her religious confession and contact details. Then it presents the final price for services, which will be determined after the user agrees with the terms.

Umer isn’t yet up and running. It is still in development, however it has already made notable interest online. There exist some similar apps in the world, yet they are not introduced in such a truculent manner. And also there are in Europe many websites providing funeral arrangements.

Such application will rather not be downloaded without a special need. Yet, its creator has no doubts that people will recall Umer when they need it. The app is not a rival for funeral houses, cemeteries, nor other local services. It will rather bring them to clients, just like another distribution channel for them.

The creator is already negotiating franchise possibilities with Belarus and Estonia. If they succeed in Russian market, they plan to actively penetrate international market.

MegaFon secures credit-line financing for Mail.ru Group stake buy

Russian mobile services provider MegaFon and Sberbank have concluded a contract to launch a $592m credit line that expires in 2024 to finance a stake take over in Mail.ru Group. The money will enable the takeover of 15.2% of shares in the authorized capital of Mail.ru Group (63.8% of voting shares).

The deal will amount to $640 million, containing $540 million to be disposed when the transaction is closed and another $100 million to be given after one year. The shares will be sold by: New Media and Technology Investment LP, New Media Technologies Capital Partners Limited and Ardoe Finance Limited. These companies belong to the USM, a holding company ruled by Russian billionaire Alisher Usmanov. Yet, when the deal is sealed, Usmanov will still hold an indirect interest in Mail.Ru Group, because USM owns over 56% of MegaFon.

MegaFon’s partnership with Sberbank enables it to purchase the Mail.ru shares on alluring conditions. The contract also modificated the terms of three going credit lines which amount to $1.64bn, and which were given to MegaFon in 2012 and 2016. The new terms have lower interest rates and reconsidered early payoff terms.

The takeover plan arises as both companies are expanding cooperation to jointly develop new products and synergies. For example, the two companies have decided to start a special deal for Vkontakte’s mobile users. The new service, called ‘VK Mobile’, will profit from the infrastructure of Megafon and its affiliate Scartel. Mail.Ru Group and MegaFon have also decoded to jointly create predictive data analysis instruments to rationalize user segmentation.

“Google tax law” in Russia

IT companies operating on the Russian market have started to pay VAT on the sale of electronic services in the Federation since 1st of January 2017. The rate is 18%. The relevant law, called in Russia “Google tax” was signed by Vladimir Putin at the beginning of July 2016.

The new rules apply to companies offering internet right to use their programs, including computer games and databases, and domains; providing services of advertisements placing; as well as selling electronic versions of books, music, video, etc. This applies, among others, to companies such as: Apple, Google, Microsoft and Uber.

Under the new law, foreign IT companies are becoming VAT payers. For their purpose, the Russian tax authorities will launch this year a special on-line service “Tax office”. It will cover the whole process of taxation from application to the tax office, by making a declaration and control of the settlement by the tax authorities. If any company fails to comply with the new regulations, it will be punished for illegal activity.

Foreign companies had already reacted to the new legislation by increases in prices of their services. The first, at the beginning of December 2016, was the US Google. It informed its Russian clients that file storage service Google Disc would become more expensive due to new tax regulations. Uber moved on its drivers the duty to pay taxes on provided services. The company announced that it does not intend to raise prices because of the new law and its drivers can count on subsequent reimbursement. Nevertheless, some Russian Uber drivers started to give up work. The US startup is trying to catch up the local leader in the market of private transportation, Yandex Taxi. Currently there are in Russia about 3,000 Uber cars, and Yandex Taxi has 15,000 cars. New tax regulations may enlarge this gap.

In the initial version of the Law on VAT for the IT industry, it covered Russian companies too. Yet, it met with great criticism from native industry. The arguments convinced the Kremlin and therefore the law covers only foreign providers of services via Internet. This is to convince Russian IT companies to leave tax havens and register their business in Russia.

Russian application in one second recognizes faces on Twitter – the portal protests

Russian company NTechLab released an application that in one second allows to recognize the face in the photo published on the Web. The tool has been integrated with Twitter. In its creators’ opinion, the app helps to identify fake accounts. However, Twitter protests and claims, that the application is incompatible with its rules.

The application is called FindFace. It has been developed by Russian company NTechLab, founded by Artem Kucharenko and Alexander Kabakov. They had previously tested the tool on VK, which is a local equivalent of Facebook in Russia.

FindFace, using artificial intelligence algorithms, is able in 1 second to identify on the network the same face, even if on photographs it is showed in different perspectives. NTechLab decided to integrate its application with Twitter and share it globally. As a result, out of more than 300 million user accounts, in a second the app is able to pick those, that bear a photograph of the same person.

According to NTechLab, the application can be very useful for Twitter users and serve for detection of fake accounts on the website. The opposite view, however, have Twitter’s managers. They believe that use of this application is inconsistent with Twitter rules and it will be treated very seriously by the company. In addition, there are concerns that the application can be used not only to activities from which Internet users can benefit. Yet, so far it has not been disclosed what exact steps Twitter intends to take. There are only rumors about the necessity of talks between Twitter and NTechLab on the use FindFace by users.