Monday, December 18, 2006

Rural broadband tender sorta flops...

One tender has been submitted by Telecom Baltija (read Triatel) for the Ministry of Transport's call for bids for wholesale broadband solutions for remote, low-income rural areas. The call for tenders ended December 18.
In effect, Triatel will get the deal unless their tender was totally wacko, which is unlikely. Other companies were giving strong signals they wouldn't participate, including Lattelecom and IZZI, who thought the process was too short and rushed. Unistars, a wireless broadband company preparing for a major WiMax push in 2007 has also stayed away, as it hinted it would by saying there were too many questions surrounding the tender terms.
The Secretariat of Electronic Government Affairs, as Minister Ina Gudele's ministry is officially called, has been against this approach from the start and considers the allocation of LVL 4 million in EU funds to expand wholsale infrastructure to be a waste of funds. Instead, Gudele and the Latvian Internet Association (LIA) proposed subsidizing end-users. This would increase demand for existing services, which the minister and LIA said had sufficient coverage in most of the areas covered by the tender.
Raimonds Bergmanis, the head of the Communications Department of the Ministry of Transport, insists that his model, increasing the number of wholesalers, will reduce the cost of connections by creating competition among those providing wholesale internet to local ISPs.
Triatel's solution is likely to be wireless internet (EV DO over CDMA 450), but it will be interesting to see how it provides wholesale broadband. As I understand it, Triatel uses at least some other companies for backbone routing of the internet bitstream to its base stations (where end-user connections are made). What will the model be-- selling the capacity of an entire base station or regional cluster of base stations to an ISP, which will then resell it as individual susbscriber links (using Triatel's own subscriber equipment--what else?). Makes it all the more curious, since IZZI, which did not participate, is a Triatel reseller.
Well, we shall see...

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