M2M Telematics

The Russian company integrating developers, producers, system integrators and suppliers of the finished solutions and services in the market of transport telematics and satellite navigation, developers of the navigation and information system, terminal equipment for application as a part of regional, departmental, industry and corporate intelligent transport systems of management and security. Enters into AFK Sistema group.

M2M Telematics works at the Russian market since 2002, and since then the group sold a large number of projects of equipment of vehicles in the state, municipal and commercial markets. M2M Telematics Group is the only Russian holding integrating developers and integrators of the innovation GLONASS/GPS – solutions not only the level of the separate enterprise, but also level of federal, regional and municipal executive authorities.

The company has extensive distributor network (56 regional partners), a wide product portfolio for different segments of the market and the big customer base.

The M2M Telematics group creates the equipment GLONASS with two SIM cards, the built-in rechargeable battery and the module Wi-fi. The GLONASS equipment developed based on a technology platform of "telematics M2M" will allow clients of group to increase efficiency of expenditure of funds for roaming at data transmission on GSM networks, to provide high-speed broadcast of information on alternative channel Wi-fi, to create necessary conditions for monitoring and control of transport irrespective of a vehicle network and many other things.

Performance Indicators

2011

Revenue of M2M Telematics holding in 2011, according to preliminary estimates the company, made 3 billion rubles that is 2.5 times more than an indicator of 2010. In the report of the company it is said that M2M Telematics in 2011 sold 300 thousand navigators, chipsets and different navigation equipment. About a half of the implemented devices support GLONASSGPS technologies / developments Geostar navigation GLONASS NIS of CB " (enters into M2M Telematics Group). revenue, also dochka of AFK "Sistema", made 3.3 billion rubles. Thus, the general earnings of navigation business of System where NIS and M2M enter, in 2011 made 6.3 billion rubles.

2010

By result of 2010 revenue of M2M Telematics group increased twice in comparison with 2009 and made 1.3 billion rubles. About 70% of revenue provided deliveries of navigation systems for equipment transport of the state and commercial customers. In 75% of the supplied equipment modules GLONASS/ were used GPS.

The main revenue in group is generated by head company "M2M Telematics" (is engaged in sale and implementation of a GLONASS/GPS systems of tracking motor transport). Its revenue in a year grew from 450 to 800 million rubles. The Content Master company - producer of Shturmann navigators became the second in profitability in group. Its revenue for last year exceeded 200 million rubles. The producer of GLONASS/GPS receivers GeoStar-Navigation which is also entering into group in 2010 earned 110 million rubles, having implemented 56 thousand devices. The total amount of the civil market of navigation receivers in 2010 in Russia, by estimates of "Geostar-navigatsii", was 95-100 million pieces. Thus, the share in the company is estimated at 56%, and a share of the main competitor – CB Navis - at 26%.

Key state customers for the company of steel the Ministry of Internal Affairs, the Public courier service, the Federal Penitentiary Service, FGUP Russian Post, Federal Road Agency. Among business companies – TNK-BP, Gazprom mezhregiongaz, Rosneft, Tatenergo, IDGC, etc.

In the I quarter 2010 revenue of the company made 180 million rubles. During the transaction on sale of 51% of stocks of AFK Sistema of 100% of "telematics M2M" were estimated at $40 million, or approximately at 1.2 billion rubles, the chairman of the board of Finam Vladislav Kochetkov notes. These are two indicators of last year's revenue of "telematics M2M". Other operator of navigation services — "Russian Navigation Technologies" (RNT) during the IPO last week were estimated at 1.66 billion rubles — eight indicators of revenue (210 million rubles), Kochetkov reminds. According to him, the difference in estimates is caused by the fact that RNT occupies 23% of the Russian market of information navigation systems now, and M2M Telematics — only 9%. Also Kochetkov notes that at public placement the cost of the company is higher, than at private. According to him, the synergy with NIS will allow "to M2M telematics" to enter the two or the three of the largest info - the navigation companies of Russia — if the companies will receive the state order.

According to the results of all 2010 revenue of M2M Telematics company grew from 450 to 800 million rubles. The main supply rate in 2010 fell on medium and small business – 60%, on a public sector share - 25%, on large business – 15%. Total sales of terminals for 2010 at the company grew by 50% (about 20 thousand units).

2009

In 2009 revenue "M2M Telematiki" made 601 million rubles that is 24% more, than in 2008.

History

The enterprise belonged to Alexander Gurko who founded M2M Telematics in 2005.

2010: Gurko sells the company to AFK "Sistema"

In July, 2010 JSC AFK Sistema purchased a share in the amount of 51% of authorized capital of M2M Telematics LLC. According to the reached agreements, AFK "Sistema" will redeem the remained 49% of authorized capital of M2M Telematics LLC during the period from 2012 to 2015.

"As a result of the transaction AFK "Sistema" will find additional examination and competences for the federal network operator of JSC NIS for the benefit of the state-private project on creation of a national system of the emergency response to the road accidents of "ERA-GLONASS", - the vice president of AFK "Sistema", the head of a business unit "High technologies and the industry" Sergey Boev emphasized.

• On October 8, 2010 the Ministry of Internal Affairs of the Russian Federation obyavit the tender for purchase of a set of the navigation and monitoring equipment for tracking moving objects. At once two subsidiary companies of AFK "Sistema" — NIS GLONASS and M2M Telematics lost its KODOS-B, controlled by the director of the department of information technologies of Norilsk Nickel MMC Gennady Bauman. The amount of the tender — 55 million rubles. After it regional structures of the Ministry of Internal Affairs will hold a number of similar competitions, but already with orders for several billion rubles. Expecting a failure of the forthcoming tenders, NIS GLONASS decided to protest results of the November tender FULL FACE and Rosoboronzakaz. NIS claims that its request was rejected for the formal reasons: the accuracy of time synchronization designated by the customer in documents was not less than 100 ms. And NIS offered synchronization accuracy not less than 150 nanoseconds, i.e. approximately in 700 thousand times it is better than the requirements declared the customer. This mismatch was also the reason for rejection of the request NIS.

By data SPARK-Interfax, business of KODOS-B grows on orders from the Ministry of Internal Affairs. In 2009 revenue of the company made 79.745 million rubles, and last year the company received orders from the Ministry of Internal Affairs for 178.5 million rubles.

2011

• Since January, 2011 the authorized service center "Telematics M2M" began work in Ryazan. Qualified specialists of the regional partner of Group - M2M Telematics Ryazan - will independently perform maintenance and also warranty and running repair of the navigation and coherent equipment. Opening of the Service center took place within the large-scale Service program M2M-REGION directed to quality improvement of customer service in Russian regions. The program assumes creation of network of the interregional Service centers based on the Regional Dispatching Centers (RDC) of M2M Telematics Group in all large cities of Russia. 
 the Innovation solution GLONASS/GPS actively are implemented in Ryazan and the Ryazan region where more than one thousand units of transport are at the moment equipped. In the region elements of Intelligent transport systems are implemented: the Safe Bus and Smart Stop system, information services for passengers and many other things. By estimates of specialists of M2M Telematics company, the Service program M2M-REGION will gain active development in 2011 and will allow to simplify process of implementation of navigation technologies in the Russian cities. Now the regional network of Group includes more than 70 partners in the Russian Federation and the CIS countries.

• In February, 2011 M2M Telematics Group opened the regional dispatching center (RDC) in the city of Grozny. The new partner of the company – NPP SOUTH-GLONASS - is created based on the largest telecom operator in the Chechen Republic and in the North Caucasus, and the Grozny State Oil Institute (GSOI). Monitoring systems and controls of transport based on GLONASS have good perspectives for development in Chechnya. At the moment the enterprises of the Republic connected, first of all, with the construction and oil industry are interested in increase in effective management of business processes, cost reduction on the maintenance of vehicles, ensuring additional safety of people and the equipment, etc.

• In May, 2011 "Russian Navigation Technologies" (RNT) M2M telematics" addressed FAS with the complaint on ", suspecting her of violation of the law about protection of the competition. According to in the companies, M2M Telematics extends among potential clients and partners the presentation where affirms that her main colleagues on the market conduct unfair competition and use "pseudo-equipment" with GLONASS. In the document under the Telematics M2M logo about which there is a speech the RNT navigation terminals (Avtotreker brand), Lasso (terminals for it are also made by RNT), Tekhnoky (AUTOGRAPH brand), Ekoel (GT brand), etc. are considered. With reference to data from the report of "experts of a system of the voluntary certification BASIS created by GLONASS Association / GNSS-forum", in the presentation "examples of unfair deliveries" of navigation equipment are described.

So, authors of the presentation, for example, claim that RNT connects blocks in the terminals an additional cable and an adhesive tape that reduces reliability of operation of the equipment. Besides, the attention that in the RNT terminal two navigation antennas instead of one are used and that "the close arrangement of antennas worsens signal pick-up from two satellite systems" is paid. The same problems are attributed also to the terminal from Tekhnoky. Concerning the Ekoel terminal it is said that there in general there is no module GLONASS as such. In "M2M to telematics" refused comments. RNT deny use of an adhesive tape for production and installation of the terminals.

2012: Entry into structure of assets of JSC NIS

• On February 14, 2012 JSC AFK Sistema announced increase in the share in authorized capital of JSC NIS with 51% up to 70% by the redemption of an additional share issue of the company. JSC AFK Sistema tendered as payment in authorized capital of JSC NIS the packet of 51% of shares in authorized capital of M2M Telematics LLC belonging to it. Thus, JSC NIS became the controlling participant of M2M Telematics LLC.

2013

The facts of embezzlement of budget funds, selected within the FTP of GLONASS

Information concerning the former guide of M2M Telematics LLC to the facts of commission of fraudulent activity and plunder of inventory items came to Management of economic safety and anti-corruption of Moscow.

During conducting check it is established that the specified company is engaged in transport telematics using the GLONASSGPS systems, and SUE Mosgortrans is subcontractor under public contracts on installation of the hardware-software navigation Tunic complexes (Heaton's APNK) on transport.

The M2M Telematics company is a contractor under the agreement on execution of works on participation in the integrated navigation system of supervisory control, control and security of transportations by land city passenger transport in Moscow. According to this agreement of M2M Telematics LLC performed installation of hardware-software navigation complexes on objects SUE Mosgortrans.

Besides, information upon embezzlement of budget funds of JSC Rossiyskiye kosmicheskiye sistemy, selected within the Federal target program GLONASS came to UEBIPK of the Ministry of Internal Affairs of Russia in Moscow.

It is known that the M2M Telematics company is involved in execution of works within the FTP of GLONASS. In March, 2013 there was a replacement of the leadership in this organization. During the analysis of business activities of firm detectives with assistance of a security service of M2M Telematics company. established that, according to preliminary data, the former heads transferred a part of money according to perfect transactions on account 8 of the dummy organizations.

It became clear that in 2012 heads of M2M Telematics LLC, for the purpose of plunder of budget money, including at RKS, selected within GLONASS program implementation, way of deception and confidence abuse, under the guise of rendering different services and execution of works, made dummy financial transactions, having listed to firms of 387 million 580 thousand rubles under control of them.

On the above-stated materials of check on June 14, 2013 SO of the Fourth Department of MIA of Russia brings criminal case according to Part 4 of Article 159 of the Criminal Code of the Russian Federation (large scale fraud).

Employees UEBIPK and investigators of SO of the Fourth Department of MIA of Russia carried out searches at the place of residence of suspects during whom electronic media of information, a flash card and computers which are studied now by specialists are detected.

Also, the search at the office of the Speys Tim Holding company which is actually belonging to the former management of M2M Telematics LLC, located on Volokolamsky Drive was carried out. Field investigators detected the documents concerning activity of M2M Telematics company and concerning the criminal case file. Besides, during searches the electronic information media confirming money transfer into accounts of the above-stated organizations having signs of fictitiousness were found.

New CEOs

In March, 2013 Board of Directors "telematics M2M" made the decision on appointment as the CEO of the companyof Sergei Ivanov, the former head of MGTS. In this position he worked less than half a year when at the end of July, 2013 from a duty of the CEO he was releasedby Vyacheslav Chistyakov, earlier heading multifunction navigation information center of "The Russian space systems".

2014

AFK "Sistema" decided not to sell M2M Telematics. The company dies

AFK "Sistema" nearly sold a controlling stake of the M2M Telematics holding which is engaged in rendering telematic services and development and deployment of monitoring systems and navigation equipment. According to materials of corporation, the relevant decision was made by Board of Directors of AFK "Sistema" in December, 2012^[1].

After that in the reporting of AFK "Sistema" the M2M Telematics holding began to appear as "an asset for sale" and was carried to "the stopping activity". However last year the solution about sales was reviewed and now M2M Telematics is considered by corporation as a normal asset again and again is carried to "the current activity".

In 2013 between AFK "Sistema" and minority shareholders M2M Telematics occurred the conflict. "System" suspected them of funds withdrawal and creation of the competing company – Space Team Holdings. Grushelevsky of a position of the CEO was discharged, and the new management M2M Telematics wrote the application in Management of economic safety of the Ministry of Internal Affairs. After that there passed searches on apartments at Gurko and Grushelevsky and also in office Space Team Holdings.

Also the management M2M Telematics detected loss by holding of a number of assets: CB Geostar Navigation (makes digital content), NPP Transnavigation (the developer of navigation equipment) and Content of Master (renders telematic services on transport). All three companies as pledge on the credit were taken away by Fintrastbank. The new management of holding tried to dispute the transaction with bank, but unsuccessfully.

Grushelevsky explained CNews that according to terms of transaction of 2010, minority shareholders M2M Telematics have a put-option obliging to redeem AFK "Sistema" of their share at the market price. He considers like that price $88 million. When AFK "Sistema" refused to redeem their shares, minority shareholders M2M Telematics suggested to redeem from corporation a controlling stake of the company for $47 million.

Notes