Thursday, December 16, 2004

Regulator cuts interconnect charges by 80 %

The Public Utilities Regulatory Board has cut the interconnect charges Lattelekom can charge other operators for using its network by up to 80 %. The agency ordered Lattelekom to slash its local interconnect (Riga and environs) to a uniform 0.8 santims per minute from 1.656 santims and also reduced the national interconnect from 3.88 santims to 0.8 santims.
Lattelekom is expected to contest the ruling in the Administrative Court. The regulator says its interconnect ceiling is based on actual Lattelekom costs. Lattelekom has said throughout the process (there were hearings on the proposed sharp cut) that no operator has passed on any interconnect savings to its customers (Lattelekom cut inteconnect charges by 20 % at the start of 2004.
Meanwhile, the hasty auction of Latvia's third UMTS/GSM licence going ahead despite there being only one potential bidder, for whom the auction appears to have been tailor-made. The somewhat mysterious Middle Eastern company, International Telecommunications & Technologies (IT&T) has, at last, put up a rather jargon-filled home page describing its services. You can see it at, where just before my departure for the US (I am now back in Latvia), there was nothing. So they are making an effort.
Unfortunately, whatever the intentions were on all sides, this has the appearance of an auction with a pre-arranged winner. Whether this is true or not -- the IT&T people vehemently deny it– appearances will keep the company under some kind of cloud even if it seems to win "fair and square." Politically, it is hard to see why Prime Minister Aigars Kalvitis didn't at least extend the deadline for the pre-selection. Normally, Minister of Transport Ainars Slesers should have been called on the carpet for the whole matter, for its appearance of scandal, if nothing else. But that wasn't done, nor were pleas to change the auction terms heard. All of which fuels the impression that some kind of state capture may be behind the whole business.

No comments: