Springtime for Nyberg

The suitors are lining up for TeliaSonera under CEO Lars Nyberg (whence the title). Norway's Telenor, an old flame of Telia (1999) who was left at the altar (or stormed away, forgot which) is back, according to press reports. France Telecom is mulling how to bid for the Swedish telco with enough cash in the offer to attract finicky TeliaSonera shareholders. A merger with Telenor would create a real Nordic giant, though still mid-sized by global standards.
This may leave the half-mother of Lattelecom with less time and energy to deal with the wackbat* Latvian government, so she may just take any deal on offer. In other words, do the share swap using the Latvian State Radio and Television Center, get its 100 % of mobile operator LMT (the most profitable of all of TeliaSonera's subsidiaries, I believe) and forget about any covenants in the deal to functionally seperate Lattelecom into wholesale and retail units. By the time the Latvians get around to doing it -- late 2009 is for the real Pollyanna optimists, to my mind-- the European Union will decree functional separation in any case. So it doesn't matter. What matters is to get the f**k out of bed with the government, get LMT and start turning it into a full service telco (including wireline, DSL, LTE wireless internet, etc. in the next couple of years).
*an amalgam of wacko and batshit. I like it.

Much time, no honcho

The owners of Lattelecom (the Latvian government 51%, TeliaSonera 49%) failed yet again on April 25 (?) to agree on a candidate for managing director of the company to replace Nils Melngailis, who resigned and left his post on April 1.

The stakeholders want more information on the candidates -- the current finance director and acting managing director Juris Gulbis,  network services director Valdis Vancovics and Gatis Kokins, a former executive of Parex Bank, currently in his own business. 

Whoever gets the job will still face the uncertainty of who will finally control Lattelecom  and what strategy the fixed-line operator will follow. This may be a reason why international executives have not been swarming to apply for this position. If Lattelecom is sold to a third party, say, Blackstone, the new owners may want to see their own man or woman in the CEO position. 

Riga trains lawyers for when the m--f-- falls from the sky

This is a bit of a weird post until you think about it. It seems that the Riga Graduate School of Law (RGSL) held a European finalist moot court competition on, of all things, space law (a complicated case involving the collision of two satellites, one a vital communications link for some dirt-poor African country). Chris de Cooker of the European Space Agency (ESA) was one of the moot court judges and he and the rector of the RGSL, Dr. Lesley Jane Smith talked to me about what all this means, as well as what joining the ESA could eventually mean for Latvia.
Satellites are still an important part of global telecoms (nobody is going to run optical cable through 700 km of snake-infested desert to Upper Squalidania compared to the cost of a satellite up/down link that can be airlifted in).
It also reminds me of a premonition I had at a Motorola Iridium (remember that?) facility in Arizona in 1999. A small group of journalists was standing under a full-sized (the size of a compact car) model of one of the satellites hanging from the ceiling and I said in a too-loud whisper -- "I wouldn't want this m***f*** coming down in my back yard." Well, the RGSL is training the lawyers you will need when the m-f does come down in your back yard.

Here's the video:

Une demi-mere francaise?

Word is now out that the half-mother of Lattelecom (and indirect 60 % stakeholder in mobile operator LMT), TeliaSonera, is being courted by France Telecom.
This confirms soemthing I have written earlier -- the half-mother is just a mid-sized fish. If you want to see the really big killer whales in this business, wait until the European and international telco giants get frisky. Well, now they are.
The deal is far from certain, as the Swedish and international press have been writing. The French will have to considerably sweeten any share-swap with cash, and that won't please the creditors of France Telecom, who are still owed billion for (if I am not mistaken) a deal done a couple of years back to buy/expand the mobile operator Orange.
The French are interested, most likely, in the Nordic market and the half-mother's partial motherhood in mobile operations in Turkey, Russia and some of the 'stans. Latvia is below the event horizon on this one. Lattelecom's annual revenues are about what France Telecom takes in over a 36 hour period.
So what might interest the French? LMT is one of the most profitable units in the TeliaSonera family, so it could make a good addition to Orange, even be Orange Latvia if we fantasize further into the future. Or Orange Baltics, since it appears to be in the cards that Vodafone will buy the calf -- the Bite Group -- being fattened by MidEuropa Partners. So a pan-Baltic response would make sense from France Telecom's side.
Would the French step up, roll up their sleeves and plunge their hands into the Latvian telecoms tarbaby? Probably -- first, to get LMT, but also for the fixed network operated by Lattelecom in order to expand its internet TV footprint, where France Telecom is said to be number one in Europe. So there may be a pan-Baltic IPTV project, as well.
This is far fetched to be sure, but the big telco raptors are stirring and something is bound to happen. Who knows, maybe Sysiphus (TeliaSonera honcho Kenneth Karlberg) will get to take a rest while some Kerman Karlbourg struggles for another five years with the indecisive and wavering Latvian government,

More headaches for the half-mother

The Latvian government appears to have decided to privatize Lattelecom by swapping its shares in mobile operator LMT for the 49 % of Lattelecom held by TeliaSonera (the half-mother). The Swedish stake will then be sold to a new investor, most likely The Blackstone Group, a US private equity company.
The decision was announced over the objections of a coalition partner, the Fatherland & Freedom party, whose Minister of Economics Kaspars Gerhards would prefer to have 100 % of Lattelecom put up for auction by both current stakeholders.
The government has also indicated that it does not want to divide Lattelecom into wholesale and retail units, a condition TeliaSonera insists upon. The European Union is expected to mandate such a functional seperation for telco operators soon, and TeliaSonera, British Telecom and Telecom Italia have already done so voluntarily.
My guess -- the shakily backed government plan will fall apart either because of political dissension or the non-acceptance of terms by TeliaSonera. According to some sources, Prime Minister Ivars Godmanis is ready to let everything go back to "square one"where things stay as they have been, that is, TeliaSonera remains a minority stakeholder in Lattelecom and an indirect holder of more than 60 % in LMT. In other words, the Swedes will remain reluctant and restricted owners of companies they want to either buy 100 % or divest 100 %, but these options will be blocked by the government.
Another stumbling block for the deal is that Blackstone will surely demand an airtight management agreement in order to take less than a controlling stake in Lattelecom. That means that all strategic and management decisions will be made by managers appointed by Blackstone, with the government kept at arm's length. The government is unlikely to accept this, so the deal may collapse on that note.
And on we go...

IBM Impact 2008, some random highlights

I tossed together some video from IBM's conference on Smart SOA (Service Oriented Architecture) Impact 2008. The start and end titles have some phrases in Latvian, as this is a dual use video.

IBM brainiac talks about widgets, mashups, SMEs

I got a chance to talk to Jason McGee, one of the chief developers of the IBM Mashup Center and the scripting language Websphere sMash about how small and medium businesses could use mashups for various purposes. This was recorded at the IBM Impact 2008 conference in Las Vegas. 

IBM honcho on SOA for small and medium business

I got a hold of Steve Mills, the Senior VP at the IBM Software Group (not an Executive VP, as I have mislabeled him on the video) for a talk about service-oriented architecture for IT systems as it applies to small and medium-sized businesses. I will be cross-posting this on my Latvian-language blog. This was recorded at the IBM Impact 2008 conference in Las Vegas, where I have been for several days. I will be back in Latvia on April 12 to write, probably, about the latest lunacies surrounding Lattelecom.

On the ground in Vegas for Impact 2008

UPDATED ON APRIL 7

I am on the ground in Las Vegas at IBM's Impact 2008 conference (about SOA and other rocket-sciency stuff). I was in the Boston area seeing family and getting away from the ongoing zoo in Latvia (about Lattelecom, but other stuff as well). Even Vegas seems normal by comparison. One strange thing I saw at McCarren Airport in Las Vegas was this iPod dispenser. Crazy. If it were iPhones, it wouldn't be there anymore.

I finally uploaded  a picture I took of the iPod dispenser (you have to use a credit card to buy one), yesterday, the picture upload function popped up once and didn't  working :(.  Also on the not-working list -- the WiFi network (for my MacBook) in the IBM press room here at the MGM hotel. Found an Ethernet connection.  But already a number of things seriously suck. 

The muddlers decide - we pick a new half mother

The Latvian government more or less decided on a scheme for finding a new half-mother for Lattelecom. It is an amalgam of ex-Lattelecom CEO Nils Melngailis and The Blackstone Group's  plan B -- to buy 49 % of Lattelecom and Minister of Transport Ainars Slesers plan to swap 23 % of mobile operator LMT for TeliaSonera's stake in Lattelecom.

How it will work is that the 49 % held by the Swedes will be parked with the Latvian State Radio and Television Center (LSRTC) until it is bought by, most likely, Blackstone. Blackstone will most likely demand an ironclad management contract so that the government doesn't use its remaining 51 % majority to mess with strategy and operations.

TeliaSonera will then do a deal to get the rest of the shares in LMT held by Lattelecom and the state (they will already have the 23 % from the LSRTC and already directly hold 49 %). At the end of the whole Chinese fire-drill, the Swedes will have 100 % of LMT, the Latvian state and Blackstone --100 % of Lattelecom, plus covenants binding them to split Lattelecom into wholesale and retail units, as some other European operators, including Telia, the Swedish unit of TeliaSonera, have already done. 

I am a bit late writing this because I didn't want it to look like an April Fool's joke. Also, I am leaving for the US this morning and won't be writing until I get over there (Boston, then an IBM event in Las Vegas).

The whole thing could still crack up if 1) the Fatherland and Freedom party decides to swamp the coalition boat -- it wanted some kind of auction of 100 % of Lattelecom (they would have a potential ally in Slesers, who wanted  100 % for the state) 2) if the management agreement is unacceptable to the government, or the government's desire to modify such an agreement pushes Blackstone to walk away. 

Then there is the Baltkom/Peteris Smidre proposal.

So there is still a way to go and nothing is certain.

Yet another interesting question -- will Melngailis, who was closely linked to Blackstone's plan B, somehow return to running Lattelecom?  He is rumored to have been offered a position with Blackstone representing the private equity firm's interests in the Baltic, although there is at least one Baltic country that, until April 1, was giving Blackstone the finger. 

Swedish expert on the future of wireless broadband

Jens Zander, a professor of radio communications at the Royal Institute of Technology and head of the research institute wireless@kth, recently talked to me about the future of wireless broadband technologies.

Click to play