An offtopic on free speech and hate speech in Latvia

I won't mix my personal libertarian views with the discussion of telecoms issues here, but I do think people should know what is going on, socially and politically, in Latvia, which is not only a telecoms market. So here, with the next Riga Pride (for me, a strictly free speech issue) coming on Saturday, May 31, are some thoughts and reflections on another, little-used blog of mine.

Sweden plans 1 Gbps internet in apartments

I have been in Stockholm for a couple of days and I got to see Anders Johansson, the IT and internet honcho at the Swedish Municipal Housing Companies Association (SABO -- I think this is the third or fourth English version of what they call themselves). Anyway, the municipal housing authorities will be installing infrastructure (fiber to the home) in some 800 000 apartments across Sweden over the next few years that will provide up to 1 gigabit per second internet speeds. Here is my talk with Anders:

A Twitter-like application for images

I am visting Sweden for a few days and saw Peter Sandberg, a fellow blogger (in Swedish, however) and an entrepreneur who started Moyume, a company making an application for instant image sharing (photos and videos). Here is my talk with him:

The half-mothers agree to move ahead

The Latvian government and TeliaSonera have agreed, as co-owners of Lattelecom, to study ways in which the fixed-line operator could implement functional separation. Agreement to functional separation of Lattelecom into wholesale and retail operations is a precondition for doing the swap of the Swedes 49 % share for the remaining state stake in LMT, the mobile operator and the real prize for TeliaSonera in this long dragged out process. Kenneth Karlberg talks about what was achieved:

Tele2 starts a music download store in Latvia

Mobile operator Tele2 on May 20 launched a music download store for its customers in Latvia, offering around 4 million songs. Later, the content will be available on the web.
This blogger had a chance to talk to Bonnie De Souza, Tele2's (Sweden) recently appointed product manager for music. Here is the video:

Catching up ahead of May 21

On May 21, Sisyphus (Kenneth Karlberg) and others from the half-mother TeliaSonera will be coming for negotiations (rolling the rock again) with the Latvian government on the proposed privatization deal concerning Lattelecom. Under the proposed deal, TeliaSonera will swap its shares for Lattelecom for the state's remaining holdings in Latvian Mobile Telephone (LMT) and probably pay a cash premium on top of the 49 % stake in the fixed operator.

Sisyphus (why do I call Kenneth that? Remember the Greek/?/ dude who was condemned to roll a stone up a hill only to have it roll back again and then roll a stone up a hill only...) should not get his hopes up. 

Still, I think that the half-mother should quietly forget about the idea of having the government sign off on a functional division into wholesale and retail operations of Lattelecom. TeliaSonera wants this to ensure that LMT will have open and fair/fairly priced access to Lattelecom's network. The Latvian government says it won't do this, but by 2010, it will have to do this because of upcoming European Union rules. As I see it, by the time the deal goes down (and we will be f**king lucky if it goes down by 2010), the functional division of Lattelecom will be an unavoidable reality.

So my recommendation: put your Lattelecom stake on the table with a nice pile of cash (let us say, an eye-opening amount). If you are lucky, the dude with the beard will say " Point one -- yes, point two -- we can sign on..." (this is a satire for my Latvian readers). If things go as usual, nothing will happen, so what else is new... As we all know, Sisyphus is head of TeliaSonera Mobility, a field where anything can happen, the future is unpredictable, technological change is mind-boggling, and nothing, nothing will be certain for Kenneth except that with Latvia, he will still be rolling that stone even if he retires, still shuttling to Riga,  as head of France Telecom Nordique Telepathy.

I have been remiss in updating the blog for a while.  Juris Gulbis, the new CEO of Lattelecom, has given a couple of interviews where he has said he will continue with the same strategy of developing broadband and related services that Lattelecom was following before Nils Melngailis was unseated. He also said that it was very important to settle the ownership question soon, so that management could get on with running the company, moving into mobile service and becoming a regional player. These points make sense, almost. If the against all previous experience, something actually moves ahead,  Gulbis could face answering to Ainars (Slesers, the Minister of Transport) and the Wackbats (the rest of the government) instead of the Swedes and the Wackbats. 

Who is smoking what?

While this may sound way off-topic, it has recently been discovered that a plant called Salvia can legally be smoked in Latvia with apparently entertaining results. It seems that someone at Deloitte in Latvia was smoking something when they signed off on a report saying that Latvia was one of the best places in the world for private equity investment.  

Hello! Hello! Are we on the same page? Or planet?

One of the world's largest private equity investors, The Blackstone Group, took part in a management buy-out bid  for Lattelecom which was given the BIG FINGER (with no rational argument) by the present government. I got the impression that the Latvian government was saying between the lines  that big, respectable private equity capital was about as welcome as a pig at a synagogue. 

I may be able to get a meeting with Sisyphus on the 21st and put up some video of it. 

Finance director named top honcho at Lattelecom

Juris Gulbis, currently chief financial officer and acting CEO of Lattelecom, has been appointed permanent CEO by the company's owners, the Latvian government and Sweden's TeliaSonera. Gulbis had been acting CEO since the April 1 resignation of Nils Melngailis.
Gulbis, born in 1969, received an engineering degree in Latvia and qualified as an accountant in Britain. He worked in banking, finance and accounting positions and was employed by Coopers & Lybrand, the predecessor of Coopers PriceWaterhouse in Latvia at a time when Melngailis was running the audit firm's Riga office.
The new Lattelecom CEO worked for Ave Lat Group, a food and beverages conglomerate owned at the time by the controversial Latvian politician Andris Skele. Later, Gulbis worked for and became director-general of the alcoholic beverages maker Latvijas balzams. For a time, he worked for the alcoholic beverages distributer SPI in Cyprus, a company linked to a controversial Russian oligarch. Gulbis has worked at Lattelecom since early 2007.
Latvian media have been speculating that Gulbis retains loyalties to Skele and may be part of an elaborate and byzantine scheme to sell Lattelecom to Russian interests, perhaps using a tangle of offshore companies that would make the "investor" appear to be a little known West European private equity company. The large US private equity group, The Blackstone Group, now represented by Melngailis in the Baltic region, is still interested in taking a stake in Lattelecom.
Others point out that Gulbis is a professional with loyalties to the owners that employ him and was chosed CFO of Lattelecom partly because Melngailis knew and trusted him because of their time together at the audit company.
Valdis Vancovics, the director of network services at Lattelecom, was appointed deputy CEO. He had been a candidate for the top post.

Latvia's LMT digging the grave for tariffed mobile voice?

Latvian Mobile Telephone (LMT) has announced a flat rate, unlimited useage mobile internet plan for LVL 19 a month. The iBirojs Open (iOffice Open) plan was made public May 7, a day before Triatel, a wireless internet and CDMA mobile services provider was to hold a press conference on having finished what it says was 95 % coverage of Latvia.
That, however, is not the point with the LMT plan (well, maybe one of them) nor the fact that LVL 19 undercuts the LVL 23 (?) price for Triatel (the speeds of both networks match at "up to 3.6 Mbps, with LMT saying it will jump to 14.4 Mbps "soon".). Even though iBirojs is a package for use with laptops and only for mobile data transmission, it effectively opens the way for "free"voice using Skype or other IP telephony services anywhere on the LMT network. While the iBirojs SIM card apparently comes installed in a HuaWei dongle modem, it can, theoretically, be removed and put in an HSDPA capable business class phone. Then you are ready and probably able to make free Skype calls to any other mobile phone on the internet (whether via HSDPA or WiFi). Once the phone is on a 14.4 Mbps link (or even one that is far slower), the way is open even for video calls from a mobile over the internet. It is a matter of time before white-hat Latvian hackers turn the iBirojs into a flat-raid based platform for mobile voice and video.

Lattelecom - staying the course on autopilot

Ran into some unnameable sources today and they said that Lattelecom, despite the long delay in selecting a new CEO and the endless talks on privatization, is more or less staying the course. A few people with close loyalty to departed CEO Nils Melngailis have left, but there has been no general bleed-off of staff or middle management. "The board is still there, watching how the company is run" said one of my informants. They also said that there were no noticable issues about strategy and "the goal of any owner will be to have the company make money."
Finance director Juris Gulbis is acting CEO until a replacement for Melngailis is selected.

Latvian telco privatization --writing off yet another year?

Latvia and Sweden are similar in that both countries stop for a while after the Midsummer holiday. This is more pronounced in Sweden, but Latvia's parliament also goes on vacation after June 22, if not earlier.

With the next round of talks on the proposed Lattelecom for LMT swap set for May 21, it is unlikely that anything will be resolved before Midsummer. That essentially kicks the next "round" of the never-ending story into September, which, even if the both parties to the talks decide to go ahead, do valuations, etc., means that nothing will happen before the end of the year. So look to 2009, maybe, as the next possible time when this matter may finally be resolved. But don't count on it. 

Meanwhile, Lattelecom remains leaderless, a few more important mid-managers may leave and the value of the company will continue to drift downwards.