Tuesday, May 09, 2006

Toss another wrench into Aigars S plans

The government's plans to nationalize Lattelekom and let TeliaSonera get 100 % of Latvian Mobile Telephone (LMT) have had a wrench tossed into the works by a Latvian appeals court. The court ruled that the 23 % stakeholding in LMT (plus another 5 % held by the Ministry of Transport) that Minister of Economics Aigars Stokenbergs says he could discuss trading for 49 % of Lattelekom, actually belongs to what is now a state joint stock corporation Latvian State Radio and Television Center (LVRTC in Latvian). The LVRTC when it was a state non-profit corporation owned the 23 % but transfered it to its subsidiary, the now moribund Digital Latvian Radio and Television Center (DLRTC). This entity was charged with implementing digital terrestrial television in Latvia, with the idea being that the enterprise would be financed by dividend revenue from the LMT stake.
As is well known in Latvia, the digital TV project was essentially killed by an overzealous anti-corruption government under Einars Repse in 2003, and some of its good faith participants who were, in fact, delivering what the DLRTC had been paying for, are still being hounded in the courts as if they were common criminals, fraudsters and lowlife.
At the same time as Hercules Repse pulled the digital temple of sin and fraud crashing down around him in ruins, a lawsuit was launched to recover the LMT stakeholding for the state. The LVRTC thought that, if anyone, it should be it that got back what it had (foolishly?) given to its wanton and promiscous daughter (who was soon to be broken on the wheel, anyway). Now, it seems, the LVRTC has won (and the DLRTC is being slowly and quietly broken on the wheel).
What this means for the whole Latvian telecoms nationalization/privatization deal is that the Swedes must now turn to the independent but state-owned LVRTC and see if it is willing to sell or swap its stake in LMT.
Just to set the record straight, Stokenbergs was a little miffed when my paper (not in my article but in a blurb of sorts) suggested that he had suggested to the Swedes that they swap Lattelekom holdings and cash for LMT. He says TeliaSonera had proposed the swap, minus the cash. However, government documents from a few years back suggest that the swap of Lattelekom for LMT was favored by the government at the time. Stokenbergs indicated one future option he was willing to discuss was stakeholdings and cash, but he had not put this on the table for the Swedes yet. OK, fine. Somehow I doubt that if the price of the remaining roughly 28 % of LMT is seen as more that 49 % of Lattelekom, the Min of Econ is going to ask for rubber duckies instead of large bags of euro or kronor or whatever. But now, that deal will have to be cut with the LVRTC. Next question to ask for my paper (which again grumbles, though mildly about my performance) is whether Ivars Golsts, the head of the LVRTC, is ready to do the deal and whether Aigars S has any say in what he decides.

Meanwhile, if you're wondering about terrestrial digital in Latvia, the answer is simple. Forget for the moment, the well-meant plans of the government to implement something in the next few years. Digital terrestrial TV in Latvia is fucked. Go buy a satellite dish or get cable...

Music played (on headphones) while writing this: Jefferson Airplane, Volunteers, The Who, My Generation, The Byrds, I Was So Much Younger, Tom Petty, Free Falling, Paul Butterfield Blues Band, Two Trains Running and The Mommas & Pappas, California Dreamin'

1 comment:

Anonymous said...

"Forget for the moment, the well-meant plans of the government to implement something in the next few years. Digital terrestrial TV in Latvia is fucked. Go buy a satellite dish or get cable..." - I wouldnot agree to such a harsh judgement :) some operators already sell Digital Terrestrial w-out cable or dish necessities.. no matter what...

unobjective reader