Thursday, March 17, 2005

Licence auction preselect, Huawei coming

The winners of the pre-selection for the March 31 auction of Latvia's third UMTS/GSM mobile licence were announced on March 15, and it was no surprise that Danish TDC owned Bite GSM and Peteris Smidre's consortium (SIA Alina and MVC Capital of the US) were the winners. There was a third, unnamed contender that failed the pre-select. According to some reports, the mysterious International Telecommunications and Technologies (IT&T) sent a letter asking the auction be extended yet again to April 26. The completely unknown consortium failed to file for pre-selection, apparently because of discord among its participants, who apparently are from Lebanon and elsewhere in the Middle East. This, in turn, may be related to political tensions in Lebanon.
The contenders now have to pay a deposit pf 30 % of the minimum bid of LVL 1.3 million by March 22 in order to go on to the auction on March 31.
My guess is that it will be a very hard fight, but the Danes may come out on top. They need the Latvian licence in order to have coverage in all three Baltic states -- Bite in Lithuania, ally Radiolinja in Estonia, and the third licence in Latvia. This will drive up the price, depending on how far Smidre and his US financial backers are willing to go in what is, for the financial side, essentially a venture capital project. MVC Capital, it is my guess, sees that Smidre has done it before, building up Baltcom GSM and then selling it to Tele2 for well over USD 200 million (a sum shared by all the owners, including Metromedia and Western Wireless). Of course, it is a different game now, the potential market for a new operator is small and difficult -- not many new potential users and 1.4 million existing users to be pried away from Latvian Mobile Telephone (LMT) and Tele2. If the new operator goes after LMT, it will have to present an extremely attractive package for the hitherto high revenue business user. If Tele2 is chosen as the main adversary, we will see what is essentially a "battle of the prepaid cards".
This will, in any case, have the effect desired by Minister of Transport Ainars Slesers of cutting mobile tariffs, but it does not present an easy or attractive business model for the newcomer.

HUAWEI coming?

Chinese telecoms infrastructure equipment maker Huawei is advertising for staff in the Baltics, most likely Latvia. While it has hitherto proven impossible to get an answer from Huawei headquarters in China (despite calls and e-mails to an English-speaking person as part of my day job), it is obvious that Huawei will set up some kind of operation here. There is at least EUR 150 million to be spend, in accordance with auction requirements, by whoever wins the third licence, Lattelekom is spending LVL 30 million to finish totally digitizing the whole country (wireless solutions are likely for the last 2 % who live in some corner of the forest or swamp), and Triatel is building up its cdma 450 network. There is no shortage of business to be had. Smidre, too, says he has been contacted by Huawei. Even if he doesn't win the third licence, his fixed line and optical internet services will need equipment upgrades.
Huawei is mentioned everywhere in the business press as a serious challenger to established western equipment suppliers and infrastructure builders such as Ericsson, Motorola and Nortel.

Latvian "friendster" blocked at workplaces, a wholly-Latvian networking and socializing site inspired by Friendster in the US is getting increasingly blocked by workplaces in Latvia. This blogger's newspaper put a content filter on (which now has more than 210 000 members), as did, reportedly, Hansabanka, the large, Swedish-owned Latvian bank. At the newspaper, the reason was that certain sales staff were staring at the friendship website all day. is actually not all that exciting, little "happens" on it day to day, except when one's friends and friends-of-friends randomly change their thumbnail-sized photos. Also, has proven to be a spam-free e-mail platform where anyone can be contacted by clicking through on a name rather than using an e-mail address and seperate program, The site has also launched a beta version of chat, something that can actively addict staff at a workplace (indeed, during a "chat craze" some years ago, it was obvious that the IT staff at many Latvian ministries and state institutions had little better to do).

Blogger sucks!

I have been busy and not so much has been happening, hence the sparse blogging for a couple of weeks. However, when I tried to get in all day yesterday, Google's simply didn't work. This started at home on my Lattelekom DSL line, so it was not an overbroad application of whatever content blocker has been used by the newspaper.

No comments: