Latvian entrepreneur Peteris Smidre may bring in two US companies – an investment fund and a mobile operator – as partners in a bid by his private firm Alina for Latvia's third UMTS/GSM licence. Smidre mentioned this in a casual conversation after talking to reporters about the operations of Baltcom, the cable TV, internet and fixed network telephony company where he is chairman of the board.
Smidre didn't say who his American partners were, noting that negotiations were incomplete ahead of the February 25 deadline for applying for pre-selection in the auction. The investment fund would provide much of the financing for the project, where the Latvian government has insisted that the successful bidder invest at least EUR 150 million in a new network and submit a detailed investment business plan as part of the pre-selection. The unnamed American operator would, most likely, assist with equipment purchasing and provide an easier entre into roaming contracts (perhaps tacking the new Latvian entity onto existing arrangements).
There now appear to be at least three more or less serious bidders for the licence at a starting price of LVL 1.3 million – in addition to Alina's consortium, the little-known International Telecommuncations and Technologies (IT&T) and Denmark's TDC (though its Lithuanian subsidiary Bite GSM). India's TCIL was to send a delegation to Latvia between January 9 - 15, but this visit was suddenly cancelled without explanation.
TDC may well have the highest stakes in getting the licence in order to cover all three Baltic countries.
Smidre also said to this blogger that Baltcom Fiber, the company formed when he bought the partly-stranded (but physically completed) optical cable stretching from Sweden's Gotland island to Ventspils, Latvia, was now supplying international capacity for Baltcom Telefonsakari, the tandem of subsidiaries serving some 9000 corporate and 1500 household customers. The telecoms entrepreneur, who started Baltcom GSM (now Tele2) in the late 1990s together with Metromedia and Western Wireless of the US, said Baltcom Fiber was cautious about entering the corporate data transmission market. This could lead to a destructive price war, Smidre said, noting that there was excessive capacity under and around the Baltic (with cables owned by Telia International Carrier and Lattelekom/Tele2, as well as links through Estonia, Finland, and Lithuania) but relatively few large corporate customers.
Meanwhile, we also learned that Baltcom's "triple play" packages combining internet, digital cable TV and telephony have only been sold to around 350 customers. This figure is expected to rise during the year as the telephone offering becomes more competitive due to sharp cuts in Lattelekom's interconnect fees ordered by Latvia's Public Utilities Regulatory Commission.