Thursday, April 13, 2006

Ministers change, Satan remains Satan

Two out of three ministers in the "troika" that has been pondering the sale of Latvian Mobile Telephone (LMT) and Lattelekom to TeliaSonera are gone (Minister of Transport Ainars Slesers fired, Minister of Economics Krisjanis Karins resigned), but the reshuffled government still seems to regard TeliaSonera as "the Nordic Great Satan" who will never, never, never get both LMT and Lattelekom.
The new Minister of Economics Aigars Stokenbergs has declared that Lattelekom will not be sold to TeliaSonera. Period. It will be nationalized instead, at least temporarily. So writes the news agency BNS.
Strangely, the Nordic Satan's top honchos are the last to get the message. I seriously think they believe they have a shot at Lattelekom. Now is the time to push for a deal to get LMT completely under its wing and shake the company up a bit out of its self-satisfaction at being the biggest earner in Latvian history. As for Lattelekom, forget it...
The same goes for the company's eventual fate --"forget it", since a state-owned fixed network operator is the last thing anyone wants to buy (at least at a price the state would find interesting). Look for many of the present management to leave rather than be under 100 % state ownership, even for a short time (and short could be a couple of years).
About the only ray of hope that some insiders in Lattelekom are clinging to is that Danish TDC, now owned by a private-equity consortium, may buy Lattelekom and combine it with Bite Latvija to create the seamless fixed and wireless offering that customers expect (this was the point with having LMT and Lattelekom together under TeliaSonera). For TDC, Lattelekom would offer its Baltic data transmission network (with a POP in Sweden) to complement TDC's asset Song, as well as its business process outsourcing unit C1, network builder Citrus Solution, the data link (POP) in Moscow, IPTV and a lot of other stuff. However, for this to work, all parties have to move quickly.
As it seems now, the statement by Stokenbergs is yet another nail in the coffin of Lattelekom's corporate value.

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