It now looks like the main thrust of TeliaSonera's offer to start talks with the Latvian government on privatizing the state shares in fixed line operator Lattelekom (51 %) and mobile operator Latvian Mobile Telephone (LMT) is to get ahold of at least (but necessarily)LMT. Indeed, this blogger has seen a letter from the Latvian Competition Council, giving, on April 15, a kind of advisory opinion suggesting that any deal giving both the fixed and mobile operators to the same owner would likely be forbidden. The letter, written to the Latvian Privatization Agency (LPA), urges the LPA to draw up political rules that would discourage such a sale to the same owner.
TeliaSonera keeps pretty good tabs on what is happening in Latvia, it paid several low key visits to see Minister of Economics Krisjanis Karins and others, so it must have known about the letter. Karins, in an amusing and entertaining debate with Minister of Transport Ainars Slesers at Tuesday's Cabinet meeting, mentioned in passing that there could be trouble with the Competition Council.
TeliaSonera Denmark, Norway and Baltic States president Kenneth Karlberg, said that it was difficult to concieve of the company's expanding "Nordic-Baltic" home market without a strong mobile services element. By implication, it is less difficult to concieve of the market without a fixed operator, at least in Latvia. Mobile is "a basic service" of the future (and the future is now in Sweden, where nobody - and I've seen it in Kenneth's headquarters building – has a fixed line desktop phone). So it looks like there will be no crying and gnashing of teeth if Lattelekom has to be tossed to...whomever.
To be sure, the deal would have to, at best, extract the 23 % share of LMT from the fixed operator's clutches. Those would not be very tight clutches, because I think Lattelekom has a mobile strategy of its own. Remembering now that I read a hint of movement on the privatization issue in TeliaSonera honcho Erik Hallberg's smile at a wine-drinking event in London a couple of months ago, but apparently didn't blog anything to that effect. Therefore I now venture this wild hallucination:
I don't exclude that Lattelekom, left to its own devices (perhaps) and maybe, just maybe lucky not to be in the 100 % clutches of a rich but timid fullmother, will move on wireless communications in several ways. First, it will make all of its extensive WiFi network WiFi phone-friendly to the max. Then it will saturate some urban areas (entire rural towns, too) with WiMax or something like it , where these phones also work. Finally, it may do something outrageous - especially if fully privatized, such as buy Triatel. It has whatever is currently unspent of LVL 30 million earmarked for "digitizing" the remaining 10 %, shacks-in-the-woods part of the network. Why not build on a good thing and at least partner with the cdma450 operator, build out the net with some of this coverage and get a mobile service to boot? As Swiss Army knife GSM/UMTS/WiFi/CDMA phones come on the market, Lattelekom can cover its GSM side by partnering, say, with Bite Latvija, which says it will gladly host virtual operators. Bite can then share some of the Triatel/Lattelekom base station towers and the like. UMTS possibilities also open up with Bite, plus wireless internet, a service the company offers in Lithuania.
To take the fantasy even further, why not have TDC of Denmark buy Lattelekom as a, say, Christmas 2006 present for the Bite Group? In one swoop, you get the Latvian fixed network, the mobile business (though only number 3/4), perhaps the Triatel business, internet television and all kinds of goodies. Plus you have Citrus Solutions and C1 and the somewhat forgotten Sakaru Sistemas, which does IT stuff.
I don't smoke. I would like to, but no time to go for a weekend in Amsterdam :). This all real and possible, if you ask me.