Look for Lattelekom to expand its international data transmission network over the next few weeks and months. The first step will be a point-of-presence (POP) in Moscow for Russian corporate customers to run virtual private networks (VPNs) with their affiliates in the Baltic countries. The next move will be to extend Lattelekom's network into the Ukraine and possibly Poland. Here the demand is coming from customers in Sweden and Scandinavia, where Lattelekom already has a POP in Stockholm. The idea is to run traffic to and from the Ukraine cheaper and more efficiently that via Russia. where there are apparently problems with the Moscow to Ukraine link.
Does this coincide with any plans by Telia International Carrier, the Lattelekom half-mother's international network? This blogger doesn't really know, but heard one opinion from an informed source that "the Swedes aren't that good at the international business", especially in the former USSR. Lattelekom, apparently sees no reason to wait for the half-mother to catch up.
Lattelekom to go Danish?
Another rumor concerns the possibility that Lattelekom and the half-mother will disown each other, just as the Widow's Son wants it (see earlier posts regarding the Minister of Economics' insistance that anybody but TeliaSonera own Lattelekom if TeliaSonera buys the rest of Latvian Mobile Telephone/LMT).
The latest rumor sees two possible buyers for Lattelekom - Denmark's TDC, which would take over the fixed line/internet business to complement its mobile Bite Latvija operation. Then Lattelekom's growing data network tentacles/POPs would fit nicely to the Scandinavian Song data network that TDC recently bought. With everything migrating, eventually, to high-speed, multiservice IP networks, this makes perfect sense (as far as I know, Lattelekom already manages its backbone and carrier networks with MPLS, so these would fit nicely with Song and its customers).
One should also note that two groups of private equity funds are studying whether to buy TDC. This is very interesting because 1) most recent and rumored (such as Telefonica and KPN) telecoms mergers have been operations driven (gaining customers, network footprint, etc.) 2) private equity expects a very good return on investment, so they are bargaining on TDC and perhaps the telecoms sector, selectively or as a whole, earning substantial profits. What do they know that we don't?
Still another rumor - Telenor of Norway may buy Lattelekom. Not so likely, as it has no mobile network (TDC has Bite) to complement the Latvian fixed line operator with.
As far as the three-minister working group trying to figure out what to do with Lattelekom and LMT, it seems to have become a standing committee. No decision, just studying the question (is it that f**king complicated, gentlemen??). We may see some movement on this next week, when Prime Minister Aigars Kalvitis comes to the Baltic Development Forum in Stockholm and will apparently meet with TeliaSonera. Whether or not the half-mother has any new persuasive arguments for becoming the full mother remains to be seen. This blogger has the feeling that the Latvian government believes competition arises by having several small, half-assed and weak players rather than regulating the inevitably increasingly big and strong few players.
As far as being worried about the size of whoever owns parts or all of Latvia's telecoms system, what will they do when 3 to 5 years from now, LMT is just a small subsidiary of a medium size subsidiary of a giant global telco?