Megafon has completed the consolidation of the business of the development company Nexign

The authorized capital of Megafon PJSC’s main asset for the development of telecommunications software, Nexign JSC (operating under the Nexign brand), has doubled following the merger of two IT companies. In May, the corresponding changes were made to the Unified State Register of Legal Entities.

The increase in authorized capital to 52 thousand rubles is due to the merger of Algorithm LLC and Mobile Platform LLC into Nexign as part of business consolidation. Since last year, Megafon has been systematically expanding Nexign, bringing the company structure to a more linear format so that it fully complies with the logic of business processes within the group, the telecommunications company stated.

“We completed this business consolidation and, as a result, increased Nexign’s authorized capital through an additional issuance, as required by current legislation. Thus the main stage of construction of a corporate structure within the framework of a single IT competence center based on Nexign was completed,” Megafon’s press service explained to RB.RU.

In 2023, Megafon received 100% of Nexign JSC from YueSem Telecom LLC. The deal was implemented as part of the restructuring of Megafon’s assets. The developer remained an independent legal entity and planned to maintain all projects with partners, Interfax reported.

In 2023, Megafon decided to merge two IT companies into Nexign, which is explained by “the desire to build a single IT competence center on the basis of Nexign.”

As Oksana Selendeeva, founder of the CODDY programming and design school, explained, Large IT companies save on scale, reduce average costs per unit of product or service, which, in turn, makes a more flexible pricing policy possible on the market. The expert believes that consolidation involves access to resources, diversification, negotiating power and brand reputation. But large companies also have their drawbacks: for example, they tend to have a more complex management structure, which can slow down the decision-making process and adaptation to market changes.

“Despite economies of scale, large companies can suffer from high overhead costs associated with large staff numbers, expensive offices, etc., making them less flexible in changing pricing policies. Well, and compliance risk, because large organizations may face stricter regulatory requirements and greater attention to their activities, which increases the cost of complying with regulatory requirements,” considers the expert.

Selendeeva notes that in the context of the telecommunications market of the Russian Federation there is a significant degree of competition, which exceeds similar indicators in the USA or EU countries. This factor reduces margins for industry participants and forces companies to look for new ways to improve efficiency and expand their businesses.

The accredited Russian IT organization Nexign, created in 1992 under the name Piter-Service, appears on the public sanctions lists of the United States and Ukraine, according to data from Kontur.Focus. The last time the company reported its operating results was in 2018, when its revenue reached 13.1 billion rubles and net profit reached 5.1 billion rubles. In 2020, the company employed more than 1.7 thousand people.
At the end of 2023, the affiliate Mobile Platform LLC achieved revenue of 180.1 million rubles and a net profit of 189.8 million rubles. Algorithm LLC’s revenue reached 809 million rubles, and net profit – 308.5 million rubles.