MTS is one of several Russian companies developing services beyond its core business, including MTS Bank, e-commerce and streaming service KION. In December it signed a deal to acquire biometrics company VisionLabs.

MTS in a statement said it plans to leverage telecom service provider KT's experience as a data centre operator in building and managing MTS's cloud facilities in Russia.

"In addition, the companies plan to strengthen their strategic partnership in developing joint solutions leveraging AI technology, combining KT's GiGa Genie voice recognition service and MTS AI's solutions in video analytics," the statement said.

(Reporting by Alexander Marrow; Editing by Mark Porter)