Monday, September 27, 2004

TV on possible alternative telecom alliance

Latvian independent television (LNT) had a report on its weekly magazine Nedeļa (The Week) which discussed plans to form an alliance of all state-owned telecommunications and data transmission networks. This blogger reported the same in Dienas bizness (before he was blogging) on September 1.
Basically, the idea involves forming a loose alliance of the energy utility Latvenergo, the Latvian Railway, the Latvian State Radio and Television Center (LVRTC), and the State Information Network Agency (VITA) to create a data and voice network that would have around 350 000 users by the fifth year of operations and generate around LVL 23 million in revenues. Currently Lattelekom has somewhat more than 600 000 line subscribers, while the mobile networks have 1.2 million users.
Putting the networks together would require investments of around LVL 15 million from the partners and an unspecified amount of public/private partnership funds.
The whole idea for the alternative network, to be called "Alianse" (The Alliance) is set forth in a 100 page document prepared by VITA.
In the LNT show, an official of the Ministry of Transport said that he wanted the plans for implementing the Alliance to be 60 -70 % ready by early 2005. That was a clears signal that the Ministry is still interested in setting up a carrier level alternative to Lattelekom (the idea first appeared in the draft concept for telecommunications earlier this year and was dismissed (in informal talks) as "crackpot" by some of the intended participants.
If the Ministry of Transport is really serious about the project, it will have to start soon to push for the necessary changes in the Law on Energy (to allow seperating the telecommunications unit of the presently indivisible Latvenergo), as well as to make a for-profit state corporation of the hitherto non-profit LVTRC, as well as to change VITA from an agency to a state company (something already being done). It will also have to work hard to convince Latvenergo and Latvian Railways to abandon their present, somewhat competing data transmission services marketing activities, as well as to justify why the government would invest LVL 15 million in competing with Lattelekom, which is 51 % state owned.
One reason could be that regardless of majority state ownership, Lattelekom is seen as somehow not acting in the state's interests. But if Prime Minister Indulis Emsis succeeds in gaining "control" (whatever he means by that) over Lattelekom, then that problem would be solved and there would, perhaps, be no need to invest in yet another carrier network to compete with Lattelekom.
Besides, no one knows what technology will bring in five years, even if The Alliance kicks off in 2005.

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