Former PM Kalvitis seen as Lattelecom board chairman

Latvian television and the news agency BNS report that former Prime Minister Aigars Kalvītis, who announced his retirement from politics, may be named as chairman of Lattelecom, the fixed network operator owned 51 % by the Latvian government and 49 % by Sweden's TeliaSonera.

Kalvitis would replace Gundars Strautmanis, whose mandate as chairman ends this year. The former Prime Minister and People's Party politician has not been associated with telecommunications in the past. Born in 1966, he has academic training (including study in Ireland and the US) in agriculture and the food industry and practical experience as a dairy farmer before he entered politics. From my personal experience, Kalvitis speaks very good English.

If the former politician is named to the Lattelecom post (which pays, judging from what Strautmanis salary is) more than 100 000 LVL per year, there could be considerable controvery. Kalvitis is widely blamed for what is seen as reckless economic policies and declarations that Latvia was enjoying "fat years" when, in fact, it was riding a credit-fueled real-estate boom and wage-price spiral.

In some of the more strident criticisms of Kalvitis, who is of a portly build, the former PM has been depicted as an evil hog. Television cameras have caught him dozing during sessions of the Latvian parliament, the Saeima.

Recently, an investigative television program claimed that Kalvitis' wife was trying to privatize some state-owned fish hatcheries. The privatization attempt was rejected after the TV show aired.

Less emotional critics of the ex-politician, whose party enjoys popularity ratings below 2 %, will be concerned by his lack of experience or education in managing a telecommunications operator that faces a number of challenges.

The issue of privatizing Lattelecom, whether by a sale to TeliaSonera or some other solution, has been put on the back burner because of the economic crisis and depressed international financial markets. This effectively prevents the company from going into mobile telecommunications in direct competition with its "sister" company LMT, although the two have never been close nor have they reached a functioning cross-selling arrangement. The uncertainty over ownership also restricts Lattelecom's freedom to compete on regional and international markets.

This year, Lattelecom will be replacing its DSL internet infrastructure with fiber-to-the-home that will offer 100 Mbps speeds to start with, 500 Mbps by the end of the year, and a mind-boggling 10 gigabits per second (Gbps) to end users, apparently for those willing to pay. The company is also entering the new business of building out a terrestrial digital television broadcast network.

Although most of this, on a day-to-day basis, will be dealt with by CEO Juris Gulbis and his management, Kalvitis will have to oversee these projects at the board level. Whether his dairy-farmer education and experience, coupled with many years in politics, will suffice remains to be seen.