The government will reject Latvian telecoms entrepreneur Peteris Smidre's appeal to suspend the third UMTS/GSM licence auction until issues concerning Lattelekom's interconnect rates are settled. A statement will be issued later today, February 16.
Smidre's letter to the government has, in fact, generated negative speculation about the true reasons for his appeal.
According to one version being discussed in government circles, Smidre is trying to delay the auction indefinitely because he has not gotten a committment from the American partner he hinted would join his personal company Alina in the bid. One reason for this could be the turmoil on the US mobile market, with mergers and aquisitions taking place from week to week. No one will pay much attention to an auction in a market that, at best, will yield as many customers as a mid-sized Midwestern city, say, around 200 000.
The other grounds for rejecting the appeal is that it effectively postpones the auction indefinitely, until Lattelekom and the Public Utilities Regulatory Commission finally adjudicate their dispute. Rumor has it that the case on the legality of the sharp cut in interconnect rates will be heard as early as March, but if it is appealed, the process could drag on for months or years. That would essentially kill any prospects for a third operator coming into Latvia (at least formally, by winning the licence auction) during 2005. In effect, it would defeat the government's efforts to get a "real" third operator (not counting Triatel, which honored its 1000 th customer today) into the Latvian mobile market.
It looks like Smidre's efforts will not only fail but may raise (perhaps unnecessary?) doubts about his own readiness to apply (in a consortium) for pre-selection on February 25.
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