Tuesday, September 21, 2004

Emsis eases on telecoms privatization?

Today's Diena reports that Latvian Prime Minister Indulis Emsis seems to have softened his stance on privatizing the majority state holding in Lattelekom (51%) and mobile operator LMT (where the state holds 23 % indirectly and 5 % through the Ministry of Finance). This could be done after careful study of the issue by experts, writes my rival Jara Sizova, citing the PM. I think it is just a different way of saying "no".
Even the Minister of Transport, Ainars Slesers, said to be less of a hardliner than the PM appeared on TV and rejected the idea of privatization. I would be interested in hearing how they see the companies gaining value as semi-independent, small national operators. Telecoms is rapidly becoming a global business and is even having a hard time competing on a regional level. The real question isn't whether any Latvian government will ever sell its telecom holdings, but rather who will own TeliaSonera in five years. The really, really big fish are out there (the Vodafone sized ones) and they are hungry.
If the Latvian government wants to get value or dividends from LMT and Lattelekom, it could do a share-swap with TeliaSonera, trading its shares (after converting the companies to joint stock corporations) for shares in TeliaSonera. That would deprive the state of a quick cash payment, but it could get a chance at that sometime in the future, if and when TS itself ends up on the selling block in the 2010s.

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