Monday, November 21, 2005

On the "rats" of Latvian telcos, with a strange backstory

Today I was contacted by a young reporter for another publication who considers me an expert on telecoms. Flattering.
She asked what would happen with the 30 or so alternative voice service providers in Latvia. That inspired me to write what I told her for this blog, but first, a strange digression.
This summer, because of a dispute with the management of my newpaper, I had reached what the hilarious Google Translate German version of my writings would call "bumsen weg" stage of relations with this institution (that is how it translated "fuck off", test the thing if you don't believe me). Anyway, I did secretly visit the newspaper across the river, as we call it, and saw the smart lady business editor, told her that I had had a row with my editor and might be interested in paddling across. The business editor said she had no openings, but was working with a couple of barely 20-somethings trying to make a semblance of a business page, etc. etc,
A few weeks later, the lady who I went to look for a job with because I had a row with my editor had a row with her editor, quit and left the paper-across-the-river and is freelancing or whatever. The 20-somethings were left "motherless" which is how the business page has looked from time to time.
I have stayed where I am, a truce has been called with my editor and that is where things stand for now.
So now I suspect I may have been called up by one of those "motherless" 20-somethings, though I could be terribly wrong.

And to the point:

I told her that I strongly suspected most of the 30-odd little operators got their revenues from IP telephony, connecting their code to a POP and a leased fat pipe. Hence the leaflets in the outlying housing projects offering calls to anywhere in the world for LVL 0.07 per minute, which is far less than Lattelekom offers, but only a little less than Triatel, one of the bigger alternative players, offers on its fixed and mobile wireless network.
When asked whether number portability would bring changes to the fixed network market, I said that the main sense I saw was to be able to move one's number to a different switch within one dialing region. All the action will be in the mobile space, and then, probably not all that much.
For customers who want cheaper foreign calls, operator pre-selection serves this purpose. There are actually very few alternative networks to move your fixed number to. Baltkom with its fiber optic network in Riga could be one. However, for local calls, anyone who makes lots of them can probably cut a deal with Lattelekom (lowest rates at certain times are LVL 0.05 per minute, only free is cheaper, so get Skype).
This brings me to my next point, which is that the future of the fixed network is DSL or some other high speed internet connection with quality voice as a low priced feature and do-it-yourself voice (or video calling or whatever) essentially "free" (included in the monthly all you can eat fee). That, in turn, means that the next battle among fixed line operators will be when local loop unbundling is implemented, and small operators want to buy lines from Lattelekom or have their own DSL equipment (DSLAMs) hosted by Lattelekom. While I have not looked into it in detail, I understand this has caused some friction between BT in Britain and its rivals. Here I could see someone like Latnet finally making good on its pre-2003 musings about offering telephony. Instead of fixed line voice, maybe they will want to buy lines and run their own DSL service instead of re-selling Lattelekom's DSL. I am merely speculating, I have not heard anyone at Latnet say this.
I also came up with a great quote for the reporter from-across-the-river : "Fixed voice is a a sinking ship, and the battle for customers is among rats on that ship. Lattelekom is seen as the the big fat nasty rat, but there is no point in winning against it as the whole ship is going down."


Anonymous said...

what do you mena by this?

do-it-yourself voice (or video calling or whatever) ...

Juris Kaža said...

Yes, once you have broadband internet for a reasonable fixed price, do-it-yourself voice (Skype, some of the VOIP services) become possible. Video chat is also possible with higher speeds (say 2 Mbps).

Khmmm said...

It was unclear about "newspaper accross the river", "my editor", "my newspaper". Are still working and writting for DB or ... some other newspaper?

Juris Kaža said...

Of course I am still with DB. We are located in the center of Riga, having moved from the Press Building in 2004. If you follow the blog, you will find a post indicating that there was some tension with my "bosses" in the early summer. At that point, I thought of getting out and was, in fact, interviewed by IDG News for a possible position in Stockholm, which did not materialize (they took someone in London, already living there, instead).
The paper across the river is Diena. I don't work for them. I do some freelancing for IDG and for the Economist Intelligence Unit. As long as it is not in Latvian, the management here doesn't really care. So that is why I do as a please on the blog :).