Monday, October 11, 2004

Small fry, bigger fish, grandes poissons?

Well, good morning, axe handle, as the Swedes would say. I just read about the spate of rumors last week that France Telecom was courting TeliaSonera. It pushed up the shares of both companies for a while, then came the denials.
TeliaSonera is one of the parents of Lattelekom (49 %) and consolidates a majority, by its reckoning, of Latvian Mobile Telephone (LMT). TeliaSonera's repeated appeals to buy the rest of both of these companies to form an integrated (at the network and services platform level, at least) regional operator have fallen on deaf government ears. In the public discussions of this idea, the spectre of "a supermonopoly" headquartered in Stockholm has been raised.
I always smiled at this. If Lattelekom and LMT (despite its hefty profits) are small fry, then TeliaSonera is only a mid-sized fish. Possible, and, within the next five or so years, even probable food for something much bigger. I am somewhat pleased by these rumors confirming that yes, there are grandes poissons out there in the Telecoms Ocean, or perhaps Grosse Fische.
I couldn't quite see the logic of France Telecom buying the company that just got cleared to buy its Danish Orange unit. One would think the French would prefer to expand in the direction of the Mediterranean and francophone North Africa. But one never knows.
Deutsche Telekom could be another remotely possible suitor for TeliaSonera, perhaps once it has taken all of the little Baltic fish under its fins. The Germans, I believe, lost in the original tender process to modernize Latvia's telecommunications in the early 1990s, so the interest has been there. After all, it would give a Nordic/Hanseatic regional branch to the German-based operator.
In any event, such rumor and speculation should be food for thought for those in the Latvian government who believe Lattelekom can remain a 51 % state-owned company indefinitely.

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