Tuesday, February 28, 2006

No cow, no ice, let's try to do it nice...

No cow, no ice, let's try to do it nice...
That bit of doggrel (poetry written by dogs :) ) sums up the real truth behind the whole TeliaSonera, Lattelekom and Golden Telecom uproar in a teacup.
TeliaSonera doesn't object to Lattelekom doing a deal with Golden Telecom, they were just ever so slightly peeved that doing a big dog and pony show about it wasn't coordinated according to procedures. NOTHING was said about Golden Telecom's links with the Alfa Group. Once these procedural matters are ironed out, the whole thing can be announced with a brass band for all anyone cares.
As for the planned February 27 press conference, it fortunately didn't happen because the Golden Telecom executive couldn't make it. Up to you to decide whether he was the dog or the pony. But alls well that seems to end well. Forget the bizarro Swedish expression about a cow on the ice. The cow was never there. Sometimes the truth is more boring than a potentially good story. But the point of reporting and good blogging (even in a somewhat gonzo vein) is to stick to the truth as much as possible.
At the same time, there was enough background noise between TeliaSonera and Alfa to justify writing the cow on the ice post. It's a blog, after all. The wackazoonie (nice new word, eh?) story about Alfa lusting for Lattelekom by dear Natalia of Business & Baltija only tossed a log on the bonfire of vanities.

Sunday, February 26, 2006

Lattelekom puts a cow on the ice?

There is a bizarre Swedish expression for creating a perilous situation ko på isen or a cow on the ice. This seems to have happened with Lattelekom's pending deal with Russia's Golden Telecom, partly owned by the Alfa Group (and Norway's Telenor). The deal is for a point-of-presence (POP) in Moscow that would handle some of Golden's data and voice transit (IP voice?) to Western Europe.
Makes sense - except for one thing. Alfa Group has been at loggerheads with Lattelekom's half-mother TeliaSonera about a Turkish mobile operator and apparently other issues. So what has happened is that some TeliaSonera honchos are asking Lattelekom to at least cool it with the publicity about the deal with Golden. So there may be no press conference on February 27 as announced earlier.
Another reason is that Natalia Vasiljeva, the IT and telecoms reporter for the Russian-language Business & Baltija (the newspaper, like Prince, known as &) wrote that Alfa Group might be interested in buying Lattelekom. Purely speculative, but this may have freaked out some of the Swedish honchos. Don't read Russian, this is what folks say Natalia wrote.
Given that the Latvian government won't sell Lattelekom to TeliaSonera, but rather, to anyone but, should it surprise anyone that at least one anyone but has show up? Do Russian companies not like bargains (without Latvian Mobile Telephone, with just a fixed network, 75 000 DSL lines and its two new subsidiaries, Lattelekom is still less than hot...)?
That this Russian company may be thinking the same as & is no surprise, even less of a surprise to the Latvian government, which has practically been dangling the company to all the anyone buts of the world (there aren't too many of them). So now you may be starting to get what you wanted, at the expense of a serious cow on the ice freakout by the other half=mother. Next step, what will the conservative Latvian nationalists in the Saeima say about selling the main national telecommunications network to a Russian company controlled by an oligarch-- Mihail Fridman, if I am not mistaken?
The problem with Russian ownership (Russian oligarchs are interested in making money efficiently, otherwise they would be beggar-garchs or whatever) is that oligarchs (like any Russian, except they have lots of money and economic power to take away) are not sheltered from the whims of the Russian state. So if Mihail Fridman gets on the bad side of the Putin Kremlin, his properties could end up the properties of the not-so-whimsical Russian state.
This could mean a couple of weeks of merriment...
Oh yes, TeliaSonera (Telia at the time) had an attempted marriage with Telenor that put Britney Spears' antics in Las Vegas to shame. The whole thing fell apart, some Norwegian honcho even punched out a Norwegian radio reporter as the whole mess was wobbling and reeling. A real circus. So we have a corporate nemesis and a a spurned ex-fiance out there on the ice with the cow... :)

Thursday, February 23, 2006

Lattelekom to flip the bird?

Here's the latest from my murky unnameable sources:
Lattelekom is going to crank up the speed of its undersea optical cable to Sweden to several gigabits. One reason is that it is on the verge of doing a major deal with a (Scandinavian?) television organization that will use the fiber to distribute its digital TV content wholesale by landlines rather than satellite (the bird). It will probably be a regional deal involving all three Baltic countries. Lattelekom and its regional partners will provide the MPLS backbone to deliver a high quality IP TV signal to cable operators. Tests show that the result is better than digital satellite (depends on a shared or individual dish antenna), which is the way a lot of cable operators get their signal (in Latvia, from Latvian TV's dishes on Bunny Island - Zaķu sala).
MPLS allows a better quality of service implementation and the ability to shape the way the backbone handles the packet stream.

And from not so murky sources:

Look for Triatel trying to pre-empt HDSPA services on Latvia's UMTS networks (0nly Bite Latvija has said it will implement) by boosting its nomadic wireless internet speeds to over 3 Mbps by upgrading to EV DO rev. A. The current version of EV DO manages up to 2.4 Mbps, but Triatel talks of a 1 Mpbs link just to be safe. However, the cdma-450 operator may be racing against a three-legged horse -- there are very few HDSPA phones and radio cards available.
Also look to Triatel implementing "plastic roaming" starting with some Russian GSM operators and then Western Europe. This means that sticking one's Triatel SIM card in a GSM phone will work with these roaming partners. Next step -- hybrid phones that work on the European GSM frequencies. Then the two phone problem will be solved. Huawei, which came out of the closet about its relationship with Triatel recently, says it will have hybrids, too. Huawei is building Triatel's network in Latvia. Official at last!
In 2008, look for mind-boggling wireless internet speeds of over 70 Mpbs downlink with EV DO rev B coming online. Don't know what Triatel's plans are, the technology was described in a presentation by one of Huawei's demi-honchos, Jeff Wang. Sun Gang, a gentleman I have spoken to a few times (he spilled the beans about Latvia) was also there at the joint dog and pony show in Riga. But no Chinese snacks, just typical (but good) Latvian presentation stuff :(.

Sunday, February 19, 2006

Some quick definitions of the weird

As I may have gained a few readers while at 3GSM, I want to explain some of the strange terminology used from time to time in this blog, namely:

A half-mother - derived from the use of the maternal parent to designate the parent company in some European languages Muttergesellschaft in German, Moderbolag in Swedish. Any company owning around 50 % (or 49 % as TeliaSonera owns in Lattelekom) is, thereby, a half-mother.

Honchos – derived from, I believe, the Spanish, meaning powerful, leading person and decision maker. Kenneth Karlberg, who has some long title describing the entire geography of the regions he is responsible for at TeliaSonera is easier called simply a honcho.

The widow's son – derived from the Latvian atraitnes dēls and used to describe an earnest young man making a best effort, at least as I understood it to be meant. Used by a member of my family to describe the Minister of Economics Krišjānis Kariņš, who is one of the three ministers trying to figure out whether to sell Lattelekom to TeliaSonera or not. As far as I know, the Minister isn't a widow's son in real life.

Other bizarre terminology will be explained as it comes along.

The inexhaustible patience of the Swedish half-mother

Despite all the adventures in Barcelona with pickpockets, a 3GSM World Congress press room like a refugee reception center and a Third-World commuter train experience, I did come away with some insights on the state of play between TeliaSonera, the half-mother of Lattelekom, and the Latvian government, the other, slightly-more-than-half mother.
First, there is an ongoing discussion, most of it apparently by written communication, on models for the privatization of the remaining 51 % of Lattelekom. Since price is a sticking point, and since the Latvian side imagines that Lattelekom (which they want to sell as a bare-bones fixed network operator) is worth more than some of the figures suggested by TeliaSonera, one possible model is to list Lattelekom on the Riga Stock Exchange and get some kind of market driven benchmark.
The price, of course, would be partly held up by the fact that there was one major buyer (TeliaSonera) always in the background, but also depressed by the fact that, in the long run, who needs a fixed line operator with 1/3 as many users (600 000) as Latvia's mobile operators put together (around 1.8 million)?
Both of the other companies in the Baltic in which TeliaSonera has acquired a majority holding (Lietuvos Telekomas and Eesti Telekom or was it Elion/?/) are traded on stock exchanges. In Estonia, TeliaSonera had a hard time prying a few percent shareholdings loose from the state, so Latvia has not been the only hard nut to crack in the region (never mind the mess the Swedish company faces with its attempts to buy Turkcell, etc.).
Still, it appears that nothing will happen until 2007 at the earliest, after Latvia has had its parliamentary elections in October 2006 and a government is formed. If the present coalition retains power, there can perhaps be some movement along the "share-listing" path.
One possible worst-case scenario is that Aivars Lembergs, the controversial mayor of Ventspils (who has great support in the polls) may end up forming a populist/strong-man led government. Lembergs has been hostile to foreign investment and Sweden in particular. This could lead to a scenario of a) continued stalemate or b) the pull-out of TeliaSonera from Lattelekom in exchange for 100 % of Latvian Mobile Telephone (LMT).
To me, it seems that TeliaSonera probably has a "plan B" for making LMT into a modern, mobile-centric wireless voice and data services enterprise that could develop any necessary fixed line (or fixed wireless) assets so as to offer a complete integrated services platform.
In that case, the biggest problem will be in getting LMT's management to be less conservative and, as some say, a bit arrogant with its own success hitherto (in terms of relentless record earnings, etc.).
For Lattelekom, the sale-to-anyone-else scenario will involve a longer period of state ownership while the company is prepared for this offering. As I have written before, this means an almost certain loss of many of its present top-management assets, who will not work in a 100 % state-owned telco (probably the only one in the EU in 2007 or 2008, when this scenario could come to pass). The effect on the quality of service and, above all, on the creativity of new services, flexibility, etc., that will result from political ownership will drive even more customers to smaller, more flexible and customer-oriented alternative operators and to all-pervasive wireless (voice, data, even entertainment such as TV ) service providers.
At the end of "the day" (lasting, say, half a decade) we may see someone finally taking the Lattelekom fixed network off the state's hands for a low price in order to use it for data, IPTV, and wholesale capacity provision to the private operators that will have taken over much of the dwindling fixed network customer base (mainly broadband to the home, some business services, and IP TV).

Tuesday, February 14, 2006

Bite hints at early 3G launch

Bite Group (the Lithuanian-Latvian organization running mobile operators in both countries) sees itself on the right track as its representatives visit 3GSM World Congress in Barcelona. Zilvinas Kuchinskas (whose name I may have mispelled) told me that Bite was both inspired and encourged by what they had seen and hear at the global mobile telecoms event.
Kuchinskas also strongly hinted that Bite would make an announcement about 3G services in Latvia "pretty soon". That this will include a flat rate wireless data connection seems certain, but it is not certain that Bite will launch with HSDPA, still seen as an emerging technology in terms of handsets and PC cards. However, once HSDPA devices are available, it should be a hot technology.
The experts here also expect 3G to take off very fast over the next couple of years, especially with drivers like mobile TV, entertainment and games. But at the same time, other technologies such as WiFi and WiMax will be nipping at 3G, especially with Nokia announcing that it will be making multi-functional radio devices capable of using GSM, 3G, WiFi and WiMax networks.
There is also an event here where Niklas Zennstroem will talk about Skype going Mobile. Unfortunately, due to the whole mess with me having my wallet stolen, I spent much of the afternoon phoning banks, cancelling cards and talking to the Spanish police. I must say that I got off pretty well compared to the several "brothers in misfortune" (bēdu brāļi) as Latvians would say. The other complaints being heard at the police office involved whole bags with laptops, mobile phones, air tickets, passports, passports with US visas, lots of money (I lost around LVL 40 maximum), in otherwords, I only stepping in shit, these folks got hit by shitstorms. It has been a merry time for thieves and pickpockets here, adding to the already bad legends one hears about Southern Europe and the so-called Latin countries.

Jose good, pickpockets bad

The session with Jose the Bureaucrat was actually OK, gave some insight into Latvia's problems. On the way from there, however, some m-f lifted my wallet, credit cards, the whole business. Hour on the phone to cancel all cards, useless fucking mess.

Monday, February 13, 2006

Jose the bureaucrat and the Great Clusterf**K

Well, we are off to a great start here at 3GSM World, the press center has no power, no WiFi, no Ethernet internet access, in short, a total clusterfuck of a situation, and a great recommendation for the ability of whomever is supposed to be running these technologies here.
Also our hosts for this event have scheduled a meeting tommorrow with the Spanish regulatory authority at the same time at as the top honchos like Arun Sarin of Vodaphone, Olle-Pekka whatshisname of Nokia and others are scheduled to give keynotes. We will instead be talking to Jose the bureaucrat about regulation in Spain, of little but academic interest.
In addition, the organizers of the big even failed to send me the press registration bar code, leaving me and others standing in line for about an hour. Oh well... more later.

Sunday, February 12, 2006

Charlotte's footsteps and Kenneth's forehead

This may seem like a bizarre title for my first post from Barcelona, but it sums up some of the important matters.
First, who is Charlotte? She’s Charlotte Züger, a press spokesperson for TeliaSonera who I called recently on an IT related story. Charlotte talked to me for about three to five minutes and all during that time, I could hear her footsteps. She was walking down a hallway, probably in the TeliaSonera Stockholm office, away from here desk. Although I called the Swedish “landline” number for her office, she answered on a mobile phone for the simple reason that THERE ARE NO MORE LANDLINES at TeliaSonera. Everyone is mobile, either inside or outside the office, and everyone is available almost always.
To sum it up, for voice, mobile is the future and has been the future for a couple of years. This is what 3GSM World is all about, mobile is where the personal communication environment is going. TeliaSonera realizes this and is probably placing most of its bets on a mobile future for its customers as well, both in Sweden and outside.
And so who is Kenneth? Kenneth Karlberg, the chief honcho of TeliaSonera’s Baltic operations (Denmark, Norway, whatever as well). Why is his forehead interesting? He has been beating his head against the stonewall put up by the Latvian government against the perfectly rational idea that TeliaSonera should acquired control of both Latvian Mobile Telephone (LMT) and fixed-line operator Lattelekom. The government thinks it is better for “competition” to have a “orphan” fixed line operator to be sold at a fire sale, rather than a strong fixed-mobile platform the offers a seamless solution to business and private customers, like similar operations do in dozens of countries.
I think we will hear soon from Kenneth of the battered forehead that he will follow in Charlotte’s footsteps. that is, go with the mobile. Take LMT, best available and f**k the rest (unfortunately). But I probably won't hear it here (officially, nor even in unoffical whispers) here in Barcelona.

Friday, February 10, 2006

LMT profits "over the hill" at record level

Latvian Mobile Telephone (LMT), which is 49 % owned by Sweden's TeliaSonera (and indirectlty via Lattelekom's 23 % holding), posted record 2005 after-tax profits of LVL 56.4 million, only slightly up from LVL 54.6 million in 2004. Turnover rose to a preliminary LVL 168.4 million, compared to LVL 149.3 million in 2004.
The figures show that profitability at LMT is flattening due to increasing competition and an expansion of the client base to lower revenue-bringing, less profitable customers. This is inevitable as the number of mobile users approaches or may even have passed 1.7 million of a population of around 2.2 million. It can be reasonably said that the company is past peak on margins and may have reached the top of its profit figures in absolute terms.

Here comes Radio Free Politics (and Videoblogging)

It looks like the wackwits (there's a more colorful word, but I've overused it when writing this blog in anger at various idiocies) in the Latvian parliament (Saeima) are going to pass a law that essentially forbids all political advertising and political agitation 90 days ahead of the October 7, 2006 parliamentary elections.
This is an idiotically overbroad draft law, it would suffice to tighten up campaign spending limits, to monitor them and to enforce penalties against violators. Besides, we are constantly subject to advertising, and if we haven't learned how to critically examine this method of communication, well, then we deserve what we get (and seem to have gotten it in the present Saeima).
One way to get around the repressive IDIOT LAW (which could be interpreted to attack the press and television) is to use the internet to say FUCK YOU ALL! in the name of freedom of expression to the legislators and to conduct the campaign by internet. Political advertisments, podcasts and videoblogs can replace using the national media and serve as totally free and unregulated places to conduct a political campaign. Short of turning Chinese, there is no way to stop this. You simply host and finance everything from a foreign server, where the friends of Party X,Y, or Z in Sweden or Kiribati or Moldova fund the podcasting of political agitation and the videoblogging of paid (by Kiribatian friends of Party X) political advertisments.
Once you get key voter segments, like the 500 000 + users of draugiem.lv to start listening to podcasts from Radio Free Latvian Politics or watching Political Web TV (or getting short political commercials as guerilla e-mail attachments or even multimedia phone messages), you have a completely different campaign. Instead of advertising street rallies, one will summon the party faithful as "flash mobs" by SMS. I would like to seen the Green Stupider than Peasants Moron Party (the Latvian Green/Farmer's Alliance sponsored the bill, which passed by 60 votes in a preliminary reading, left-wing wackos voted for it, the other coalition parties didn't) start confiscating mobile phones as "outdoor agitation.
This puts a bizarre twist to a remark I made to Kristaps Kaupe, a Latvian blogger (at http://blogs.7x24.lv/blog/kristaps/). He blogs mainly on sometimes arcane IT matters (being an IT person), but is also a bit of a political activist on the radical end of the nationalist spectrum. I phrase this gently because Kristaps is still mourning a laptop hard disk and I know what that's like. Anyway, much as I, being of libertarian-anarchist inclinations, would disagree strongly with much of the politics of the Union of Nationalist Forces (Nacionālo spēku savienība N.S.S.), but at one point I commented on Kristaps' blog that a small party(or movement or whatever they consider themselves) could popularize its views in podcasts and videoblogs (this was after Lattelekom indicated they would be hosting Apollo internet users' videos after their got their IP TV service organized, much the way Google does with Google Video).
So now it looks like we are heading for where all Latvian political parties, who want to keep their freedom of expression or simply defy this moronic law, will be using the uncontrollable internet to run political campaigns that will be banned from the traditional media. In fact, if the Monkey House on Jēkaba Street actually passed the bill as a law, I am thinking of starting a Free Latvian Politics blog through Blogger, which is hosted somewhere in the US and protected, I should hope, by the First Amendment of the US Constitution.

Thursday, February 09, 2006

Heading for Barcelona

Judging by the blog, just about Jack Shit has been happening here, which is not really true. Electric utility Latvenergo is wiring a couple of apartment buildings and a mixed housing project in Riga with fiber-to-the-home. Plus, it will offer a kind of triple-play with a choice of cable TV providers, so people moving in will click whether they want IPTV from say, Baltkom TV, IZZI, or someone else. The internet speeds will be in the 2 Mbps to 10 Mbps range, with a premium 100 Mbps for whatever you can do with 100 Mbps. Fiber to the homes is still something pretty radical even in Western Europe, so go for Latvia, go for it.
As to going, I am flying down with some Latvian journalists to 3GSM World Congress in Barcelona on Sunday and hope to do a little blogging from there. Although I work for a business newspaper and only the digerati know of this blog, I have been getting e-mails from every maker of widgets and gadgettrons and quantum network googleizers. Right up the alley of a general purpose newspaper whose reader is a Latvian Jed Clampett. So this is a very specialized event, besides having every mobile honcho in the world there. Should be interesting...

Friday, February 03, 2006

The long silence of the half-mother means...

Lattelekom, to use the term common in some European languages (Muttergesellschaft/.de and Moderbolag/.se), has two half-mothers, the Latvian state (51 %) and TeliaSonera (49%). Last summer, the Latvian government put together a three-man commission consisting of Finance Minister Oskars Spurdzins, Minister of Economics Krisjanis Karins and Minister of Transport Ainars Slesers. It has been many moons now, and nothing has been said by these three wise men. A pretty good job of keeping their cards close to their chest.
However, there are mutterings out there that the reason is -- it has been decided to swap the remaining ownership in Latvian Mobile Telephone (LMT) for TeliaSonera's shares in Lattelekom. TeliaSonera will, therefore, get the best of second-best alternatives -- the leading and oldest mobile operator, the real prize. Indeed, some of the executives at Lattelekom are said to be resigned to this scenario, which means there will be a finite, but indefinite period of state ownership followed by a firesale of a wireline-only company to whomever.
I've discussed this before and I have made some guesses, one being TDC, which could then pair Bite Group with a fixed operator (useful in the future for high-speed broadband where voice is a feature). Telefonica has also come up, but now one reads they are having trouble getting prime-quality financing for their purchase of UK mobile operator O2.
Now that I mention TDC, which was bought by some private equity funds, I can also imagine a scenario where, instead of some international operator buying Lattelekom, a private equity consortium is formed to get some of the juicier parts of the orphan. Whether the government will sell to them is anothe question (they may find no one else), but, from the viewpoint of Lattelekom holding together as a viable business model, the faster the private equity boys moved in, the better.
Lattelekom's strengths are its national network, its eventual inroads into real broadband (10Mbps in some urban areas by the summer, perhaps) its business process outsourcing (BPO) subsidary C1, network builder Citrus Solutions and any IT and corporate data business it can build around Microlink. It should have opened a POP in Moscow to link Scandinavia (where it has a Swedish POP) and the Baltics with Russian data networks.
In BPO, it is an open secret that Lattelekom is doing data entry and processing work for the Finnish Sonera side of TeliaSonera. This has been kept under wraps and handled very carefully to keep the Finnish unions from going apeshit (so late at night as I write this, I can use all the American slang I want :) ) before the deal is finalized. But expect it to happen soon.
Look, too, for Lattelekom moving more strongly into content/entertainment after the stumbling start of its IPTV service (at 10 Mpbs, it could offer HDTV over IP). With this done, you have a company that looks pretty interesting to the more adventurous but demanding private equity investor.

Thursday, February 02, 2006

The word from the "beefather" and other stuff..

I was on my way to an event where Maarten van Engeland, the new CEO of the Bite Group was introduced when the whimsical thought occured to me to ask the Hill & Knowlton girls at the door whether this was the place the new beefather (bištēviņš in Latvian) was having his reception. Bite means bee in Latvian, and bištēviņs would mean a kind of main man to the bees, except that bees don't have any main man, they are a female heirarchy ruled by a queen where the poor drone or drones (bee sex specialists can comment) have little to say or do...
Anyway, the new man is just as cagey as Jesper Thiell Eriksen was (you can get half a word of ambiguity out of him on future plans, etc). Nevertheless, I was able to get "the word from the man" – which is to watch Bite in Lithuania. Whatever they do, and whatever works (unless it is something weirdly Lithuanian, like phones in the shape of cepelinas, some kind of fat-dripping dumpling our southern neighbors favor), will be adapted to Latvia. First in line, perhaps, is HSDPA, the high speed data standard for 3G being installed at BiteGSM (all Bite Group now). When this comes on line in Latvia, it will be part of the business services package, one can assume.
Interestingly, the honchos at Latvian Mobile Telephone (LMT) are shrugging at HSDPA, saying there ain't no equipment available yet. I downloaded some stuff on HSDPA, but haven't had a chance to read it yet. Bite is installing something more than promises on its infrastructure in Lithuania, one would like to think.
Another interesting thing will be that most of Bite's bells and whistles will be available when Master Telecom launches its MTS postpaid mobile service in Latvian in the next couple of months. That is because the service will run on the network infrastructure of an unnamed but easily guessed new existing operator with MTS' own switches, billing, marketing, customer service, etc. It will also be the first fixed/mobile offering from one vendor, with some interesting corporate deals, especially for those who switch operators. A hint -- no cheap phones for anyone, but nice discounts on call volume. I have said more than my anonymous source will be happy with.

On the crackpot scene...

A Latvian parliamentary commission has approved a redraft of the Radio and Television Law as an Audiovisual Service Providers Law, which will require the licencing and regulation of all providers of audiovisual broadcasting services, including the internet and mobile networks. The established internet media in Latvia are a bit worried -- who will regulate (if it is at all possible) and who will be held accountable for user-generated content? And will every podcaster and videoblogger need a licence? Give me a f**king break!!! Information is free, it got away a long time ago, and unless you want to make a mini-China of Latvia (the big China is also barely suceeding in its censorship and regulation efforts), it is best not to start down this path. Otherwise the rather charming lady Ingrida Circene of the New Era party, who heads the commission, will be like the old hag trying to sweep back the tide with a broom made of twigs.
For better or worse, all the genies are out of the bottle, everyone is an internet connection and a DV camcorder away from being a broadcaster. Face it.
For the commercial media in Latvia, self-regulation seems to work. Really offensive ravings on websites and live chats are stopped, the Latvian guys who did an early video blog of themselves, drunk, burning a live pigeon, were caught with the help of the Latvian portal where they posted, so let's not try to fix what isn't really broken.