Kenneth Karlberg (TeliaSonera) comments while in Rīga

Here is a short video of TeliaSonera's Kenneth Karlberg making some brief remarks about the telecoms situation in Latvia during a short visit and informal lunch meeting with journalists.

Latvia looks to improve mobile services procurement

Sorry to be a bit late with this, but on May 13, Tele2 organized a round table discussion gathering almost all players in the procurement of mobile services for the public sector in Latvia. Present were representatives of the host, Tele2, LMT, Bite, Baltkom, the State Auditor (Ingūna Sudraba in person), the Procurement Oversight Authority, the State Chancellery, the City of Riga, the Latvian Telecommunications Association and others.

After hearing complaints that procurement was biased toward certain players (implied was LMT), and that the state could save at least LVL 4 million by doing things differently, including regular reviews of tariffs and shorter contract periods (Bite's Fred Hrenchuk pointed out that no private business would ever lock itself into a 60 month or five year contract when mobile services prices were dropping month on month).

Jānis Lelis, managing director of the Latvian Telecommunications Association, said that mobile service consumers (including the public sector) need to be educated about their options, which would help them make considerable savings. He gave an example (naming no names) where the association had advised a customer to go to another operator and get an offer. The offer was for a substantial cut in costs, but the customer then brought the offer to his existing services provider and got an even better deal.

This confirmed my suspicions that Tele2 and perhaps Bite -- while their claims of lower tariffs are quite true -- are often used as bargaining chips by LMT customers to -- at the end of the day -- squeeze better deals from LMT. This doesn't mean that Petras Kirdeika, the managing director of Tele2 in Latvia is wrong in saying (as he has for about a year) that he can cut the public sector mobile bill by 30%.  He probably can. The incumbent, with some grinding of teeth, can probably offer 33 % (or some other package -- like free calls to all users from the same government agency) and keep the customer.

The most interesting outcome of the discussion was general agreement with Ms. Sudraba that public authorities could purchase mobile services according to one basic standard and possibly under one umbrella agreement rather than drafting tender rules and standards for each and every ministry, state agency and municipality. It would also avoid drafting unreasonable standards - such as 95 % national coverage for services to be used largely within a single municipality.  As Bite's Hrenchuk asked rhetorically: " Why do they need coverage near the Russian border?" (referring to a town a couple of hundred kilometers from the border zone.

It now appears that some kind of working group will be formed to work out how umbrella standards and procedures could be drafted for mobile (and telecommunications services in general) procurement. This would move Latvia toward the models used in other countries, such as Sweden's authority for coordinating state purchases. 

Sweden's IQUBE looks to Latvia

IQUBE, the privately-owned Swedish business incubator, is applying for European Union funding to set up a similar incubator in Latvia as a joint venture with a local partner. In the video, new business manager Christian Fricke talks about how IQUBE works in Sweden, then Business Development director Michael Ahlström tells about the project in Latvia.

Kalvītis named to Lattelecom board

Former prime minister Aigars Kalvītis  of the People's Party (TP) was named as one of three new member of Lattelecom's board, as earlier predicted by Latvian media. He is likely to be made chairman of the board.

The ex-politician (whose government is blamed for ignoring warnings of economic overheating) will earn a salary of around 100 000 LVL, around what outgoing chairman Gundars Strautmanis, a telecommunications profession, earned.

Also named to the board were Jānis Bergs, the head of FMS, a Latvian enterprise management software company and an IT professional as well as Uģis Zemturis, a former banker.

Of the three appointments, Kalvītis is a purely political gesture under pressure from the government coalition partner, the TP. The former prime minister has business experience in dairy farming. With the TP enjoying "popularity" of around 1.7 %, the appointment is generating a huge public uproar (nearly 1000 comments on the delf.lv portal). In times of austerity, the granting of what appears to be a huge "political pension" to 43-year-old Kalvitis is seen as a example of the complete political insensitivity and "friendship corruption" (looking after our folks/savējie) by the political elite.

The appointment will also bring public attention back to Lattelecom after a period of quiet when the once-monopoly "Great Satan" of telecommunications in Latvia has built up a good, relatively low-key reputation and stayed out of controversial headlines about privatization models and the like. It will cast an unncessary aura of political corruption over what should be a company running like a competitive private enterprise judged by its service to customers.