Lattelekom preparing to shapeshift

Look for Lattelekom becoming more of an IT services provider for small and medium-sized business and, at the same time, gearing up for IT TV for consumers within the next few months. The Latvian fixed network ex-monopolist's approach to the SMEs is "we can (almost) do it all". That means that Lattelekom actively offers SME business customers to completely wire their facilities - ISDN phone lines, a computer network, broadband internet, VPNs, the works...except for, you guessed it, the mobile phones no SME can operate without.
This blogger has learned that Lattelekom and Latvian Mobile Telephone (LMT) (both owned by the same part-parent, Swedish TeliaSonera have been talking for a couple of years about the obvious – seamlessly integrating their customer offering and essentially becoming a one-stop shop for each other, as is the case in Sweden with the parent's fixed and mobile divisions.
One reason why the talks (involving some powerful managers from Lattelekom) have been dragging on could be that LMT, which has been making huge profits, sees no need to bend to anyone. Also, like any other mobile operator in the world, it can just sit back and wait for more and more voice traffic to come its way. People, as one may have noticed, have been mobile for the past 50 000 years (location-based services and Nokia mobiles would have done wonders for mammoth hunting back then :) ) so that is where, unsurprisingly, they use voice services.
Meanwhile, the business and home side is becoming more and more of an IP-based show, whether for internet, data transmission (company WANs or whatever), entertainment and self-service (Skype) or bundled IP based voice.
In apparent anticipation of IPTV, Lattelekom has or may soon boost the speed of its HomeDSL services to 512 kbps from the current 256 kbps as it did for the business service UltraDSL. For home users, that still may not be the best deal on the block (if the block is near the right optical network), since Telia MultiCom, no longer owned by any Swedes, just doubled its speeds again, LVL 19.95 will get a 1 Mbps line in the home, which is twice as good as the expected HomeDSL on steroids, though one wonders about real end-to-end speeds for both.
In any case, Lattelekom has boosted the basic speed of its DSL link (DSLAM to the user) to 4 Mbps, more than enough to carry state-of-the-art compressed video. As this blogger has hinted, Lattelekom will be launching television services using IP TV over the next few months. Whether this will be fully commercial or just a pilot project remains to be seen.

The auction
This week will also see the March 31 auction of Latvia's third GSM/UMTS licence. Squaring off will be Danish TDC-owned Bite GSM and Peteris Smidre's consortium of SIA Alina and MVC Capital of the US. In a pre-auction announcement, TDC has thrown down the gauntlet to Tele2 by saying that if it wins, it will open its network to virtual operators (i.e. selling their own brand prepaid cards) from the very start. This means that any Latvian Bite (means bee) will first sting the biggest card-based operator on the market, which is Tele2. No surprise that Tele2 has been aggressively pursing corporate customers at the LMT end of the market. It is said to be close to a deal with Hansabanka, which so far has let its several hundred employees choose their own provider within the framework of a business call compensation deal. However, with telecoms expenses of around LVL 1 million per annum, Hansabanka may benefit from having all their mobiles services by one operator. The problem is, there is no official number portability until December 1, by which time the new operator will be up and running, with cdma 450 operator Triatel also making new moves as its network expands and it offers wireless DSL at 2.4 Mbps by the summer (so I am told).
It should be an interesting week. Sorry for not blogging more often, just lots of other stuff going on...