Bite to launch HSDPA in September

Bite Latvija will launch HDSPA with stable download speeds of 2 Mbps in September, effectively postponing its planned launch of 3G services with slower date speeds originally scheduled for June.
This will be a flat fee service, probably comparable to what Bite charges in Lithuania for EDGE, which is around equivalent LVL 20, though no Latvian price has been set.
At the same time, the company will offer 22 channels of international and local mobile TV, presumably also viewable on laptops equipped with HSDPA cards. There will be a fixed premium fee for watching mobile TV. A collection of 300 000 songs will be available for download through the enhanced Bite Plus entertainment portal
The reason for the delayed launch is that Bite sees more of an opportunity in waiting and launching something that offers DSL comparable speeds for business and a high speed entertainment platform for the consumer market. In addition, Bite is counting on HSDPA phone /handset availability by September, so that there will be demand from the consumer side and, of course, the inevitable offering of cheap HSDPA phones at Bite outlets.

The Story of the Story

Exclusivity of news is like freshness in fish. It is governed by rules outside the control of the fisherman who catches it. To eat fresh fish, you gotta cook it fresh. I was given the Bite to launch HSDPA story on Friday. It did not go in Monday's paper. It will not be in Tuesday's paper. I don't know when it will be published. However, no one in the Latvian media seems to read this blog anymore, so maybe, by a process akin to mummification, the story will still be fresh looking when finally published.

An experimental opportunity lost :)

In a strange fit of sanity, the Latvian parliament, the Saeima, rejected a raving loonie crackpot scheme by the Green/ Farmers Alliance (ZZP) to ban all political "agitation" and advertising in most media 90 days ahead of the upcoming election. It opted, instead, for no restrictions and a system of spending limits on political parties (wildly honored in the breach* during the 2002 elections).
How does this relate to telecoms and IT? Well, had the ban actually been enacted, it would have been a wonderful stimulus to start an "offshore" internet-based political campaign with ads and programming running as video streams, internet radio, vlogs, blogs, podcasts and videopodcasts. In fact I (a total moron as far as hands-on website building) entertained the thought of urging the start of something like www.freelatvia.net (hosted outside the jurisdiction) as a political platform for any and all once the "green" blackout curtain was drawn on democratic political debate.
There could have been some great, bizarre videos of the Riga Municipal Police fining (who knows, maybe even arresting) politicians for talking to more than three people at once on the street. Agitation? Aha, grab that person!
Could it have been done had it been needed? I saw some interest for this idea from another blogger, Kristaps Kaupe, who runs a Latvian-language blog that is an odd mixture of extreme geek stuff on open source software, RSS feed-type and other meta-information linking technologies (tags, trackbacks and other weird sounding stuff) as well as somewhat fringe nationalist politics, opinions on music and a chronicle of the death of a mouse. Anyway, Kristaps (whose day job is in a small IT company) could have been a source of advice on how to set up and run this free-for-all, free-speech fundamentalist, basically anarchist (FCUK THE STATE!) project. These are not his politics, btw. Perhaps they are mine, but since this is a largely non-political blog, I just ask anyone interested to Google "libertarian" and judge for yourself...
While it could have been fun to show the big middle one to these idiots who want to curtail debate with a sledgehammer when other means of regulation make more sense, I am glad there is no need for this, and I hope there will be no next time around...
----
*honored in the breach means ignored and violated.

Now some musings to prove I am not insane..:)

As for the earlier post, time will tell.
Meanwhile, it seems that Kenneth Karlberg of TeliaSonera was in Riga to meet Minister of Economics Aigars Stokenbergs and to hear from the horse's mouth that there is no chance he will get Lattelekom, but to get Latvian Mobile Telephone (LMT), both sides have to agree on a pricing/appraisal mechanism and then, of course, the price. The way things look, both sides will pick a kind of arbiter who will make an appraisal that will be binding to all (binding as a number, whether or not one wants to pay it is another issue). Nonetheless, it now looks like the government is serious about getting some kind of deal done in the next few months, perhaps even before more people representing the other end of the horse get elected to public office in the October parliamentary election.
That means, of course, that Lattelekom will soon be a stand-alone, state-owned fixed network operator. As I have written before, that doesn't look very good in today's telecoms world. However, there are some conditions and developments that may actually make this work. They are:

The Mobile Factor
Clearly Lattelekom will need a mobile component and, apparently, the company is working on several scenarios.
Plan A: Lattelekom, despite a change in owners, radically improves its operational/marketing cooperation with LMT. A precondition is that some people strolling to work down Ropažu Street (the LMT headquarters building is there, unless I am mistaken) about the street name) have a revelation and realize GSM IS DEAD!!(but, like any gut-shot elephant, still has to fall over). How is it dead? Well, think about HSDPA capable handsets on a flat-rate, always on internet connection and a SkypeOut capability built into the phone(that is the pre-paid, call most of the world's ordinary phones for 1.7 eurocents a minute service offered by Skype). LVL 0.012 per minute can't really be beaten, except by the price free, which also comes with the Skype when calling device-to-device. That is a price that in Latvia makes it just as cheap to call Australia (OK, I didn't check the Skype price list, but let's assume) as it is to call your neighbor on a Lattelekom phone. ).
And that is not the only threat to GSM. Think WIMAX. Think of other scenarios and you realize that it is better to have friends (Lattelekom) than to fade away alone.

Plan B: is where we start to get radical. Lattelekom could, under the right circumstances, buy the Bite Group if it were to come up for sale. That should give the combined company a strong mobile presence in Lithuania and a growing one in Latvia (also with a flock of MVNOs using and paying for the Bite network. Interest group oriented virtual operators are one way that mobile services can grow. Think again of a draugiem.lv /the 630 00 member social network/ mobile phone service since draugiem is one of the biggest flowers growing in a greenhouse where Lattelekom is the gardener). The purchase could be financed by credit and recovered when Lattelekom does an IPO at some point (with some of the funds going into the company rather than to the state directly).

Plan C: Even crazier, but assuming the "conventional" mobile phones are all going to get hit as phone-like, always on, flat rate mobile internet devices with Skype or SIP capability take over, why not? Under this plan, Lattelekom buys Triatel, the wireless internet and CDMA450 mobile phone operator. I mean, if you are going to cannibalize part of your own DSL customer base, do it with a potential velociraptor of a system such as the EV DO evolutions that will do several tens of megabits per second on the downlink, as Triatel has indicated they will do. Besides eating your own limbs, you will chomp on potential HSDPA users on speed (assuming that the average speed of HSDPA won't be much over 3 Mbps as some analysts forecast). Certainly Triatel will come cheaper than Bite.

The Media Scenario
While still remaining a content aggregator, Lattelekom develops its portal, Apollo, into an interactive news and entertainment platform with much user generated content, including the very new and burgeoning video collection on draugiem.lv (a kind of Latvian, perhaps soon Baltic YouTube). Dragging over the draugiem crowd, adding users/readers/viewers/listeners/comtributors/bloggers in all three Baltic States (or Tanzania for that matter..), Lattelekom becomes a medium that is as big as television in the region, and unlike television, available on demand and on any number of plaforms from 50 inch plasma HD screen to handheld to a live electronic ink tablet-like book/newspaper/magazine that is about to be invented at an affordable price.
In 2010, Lattelekom buys the flagship daily Diena and is the main plaform for interacting with a specialized business information environment formerly known as a paper I work for...

Pretending that I have smoked a bit too much of something, I will stop here. No music this time...

My DaVinci Code...:)

Who are the Siamese twin snowboarders? Answer late next week.

No, I am not crazy, just enignmatic.

10 Gigs across the Baltic

Lattelekom, which owns a majority share in a Baltic subsea optical cable (the minority owner is Sweden's Tele2) has just pumped up the bandwidth on this pipe to 10Gbps from an earlier 622Mbps. The company installed a repeaterless Siemens solution on the ca. 300 kilometer long link from Ventspils in Latvia to Nynäshamn in Sweden. The jazzed up fiber is expected to go commercial very soon, with Lattelekom convinced it will fill enough of the pipe to pay off some EUR 1 million spent on the upgrade.
One reason is that Lattelekom expects internet use and bandwidth consumption to rise with plans for boosting the last mile of its own Home DSL service to 10 Mbps in urban areas later this summer (probably). Add to that the rising mobile internet services and others (enterprises) using data transmission links, and you have the potential source for all that demand.
Meanwhile, Latvian cable TV/internet and fixed telco mogul Peteris Smidre's Baltcom Fiber plans to upgrade its current 2.5 Gbps to 2x2.5 Gbps, or a total of 5 Gbps (probably lighting up another pair). This link to Sweden via Gotland will also be repeaterless and cover around 103 km on the Latvian coastline to Gotland stretch (the other link is, I believe owned by Stokab of Sweden). Smidre, who started and later sold what is now the Tele2 mobile operator in Latvia (it was once Baltcom GSM), bought his 100 km of sophisticated fishing line (glass?) from a Dutchman who laid and buried it in the seabed and then was stuck holding the bag/roll or whatever because Foco 16, a rather dodgy "Powerpoint Company" put together by some Russian and Dutch entrepreneurs, fell apart and failed to pay. Smidre is said to have picked up the fiber link for a song (but the name was already taken :) ).
As things now stand, the price per Mbps is said to be reasonable and stable in this region, despite the more than tenfold jump in Lattelekom/Tele2's sub-Baltic capacity. There will apparently be enough demand to pay off the upgrade.

Music while this was written: Creedance Clearwater Revival, Mustang Sally, The Doors, Five to One, Jimi Hendrix, Lover Man, Quicksilver Messenger Service, Mona, Rage Against The Machine, Kick Out The Jams (MC5 Cover), Lou Reed, Sweet Jane (one of a number of versions)

Fun to be virtual and take out that wrench?

Telekomunikāciju grupa (TG), the Latvian alternative operator, is planning to join the growing number of virtual mobile operators of one kind or another buzzing along on Bite Latvija's network. The regulator has issued them 50 000 numbers for this purpose.
TG largely serves a business clientele, so that their virtual service will probably be business-oriented and probably linked to the launch of Bite's long-awaited business class services such as HSDPA and flat-fee mobile internet.
Meanwhile, it seems that the government can instruct the state-owned Latvian State Radio and Television Center (LVRTC) to sell its 23% stakeholding in Latvian Mobile Telephone should that be needed to complete a deal with TeliaSonera (see earlier posts). That doesn't really make the possible Chinese firedrill of a deal any easier (49 % of Lattelekom minus 23% of LMT for 28 % of LMT plus just over 11.5 % of LMT, hold the other 49 % of 23 % of LMT that Telia Sonera indirectly holds through Lattelekom. Now repeat...). Oh yes, add cash. Lots.

Toss another wrench into Aigars S plans

The government's plans to nationalize Lattelekom and let TeliaSonera get 100 % of Latvian Mobile Telephone (LMT) have had a wrench tossed into the works by a Latvian appeals court. The court ruled that the 23 % stakeholding in LMT (plus another 5 % held by the Ministry of Transport) that Minister of Economics Aigars Stokenbergs says he could discuss trading for 49 % of Lattelekom, actually belongs to what is now a state joint stock corporation Latvian State Radio and Television Center (LVRTC in Latvian). The LVRTC when it was a state non-profit corporation owned the 23 % but transfered it to its subsidiary, the now moribund Digital Latvian Radio and Television Center (DLRTC). This entity was charged with implementing digital terrestrial television in Latvia, with the idea being that the enterprise would be financed by dividend revenue from the LMT stake.
As is well known in Latvia, the digital TV project was essentially killed by an overzealous anti-corruption government under Einars Repse in 2003, and some of its good faith participants who were, in fact, delivering what the DLRTC had been paying for, are still being hounded in the courts as if they were common criminals, fraudsters and lowlife.
At the same time as Hercules Repse pulled the digital temple of sin and fraud crashing down around him in ruins, a lawsuit was launched to recover the LMT stakeholding for the state. The LVRTC thought that, if anyone, it should be it that got back what it had (foolishly?) given to its wanton and promiscous daughter (who was soon to be broken on the wheel, anyway). Now, it seems, the LVRTC has won (and the DLRTC is being slowly and quietly broken on the wheel).
What this means for the whole Latvian telecoms nationalization/privatization deal is that the Swedes must now turn to the independent but state-owned LVRTC and see if it is willing to sell or swap its stake in LMT.
Just to set the record straight, Stokenbergs was a little miffed when my paper (not in my article but in a blurb of sorts) suggested that he had suggested to the Swedes that they swap Lattelekom holdings and cash for LMT. He says TeliaSonera had proposed the swap, minus the cash. However, government documents from a few years back suggest that the swap of Lattelekom for LMT was favored by the government at the time. Stokenbergs indicated one future option he was willing to discuss was stakeholdings and cash, but he had not put this on the table for the Swedes yet. OK, fine. Somehow I doubt that if the price of the remaining roughly 28 % of LMT is seen as more that 49 % of Lattelekom, the Min of Econ is going to ask for rubber duckies instead of large bags of euro or kronor or whatever. But now, that deal will have to be cut with the LVRTC. Next question to ask for my paper (which again grumbles, though mildly about my performance) is whether Ivars Golsts, the head of the LVRTC, is ready to do the deal and whether Aigars S has any say in what he decides.

Meanwhile, if you're wondering about terrestrial digital in Latvia, the answer is simple. Forget for the moment, the well-meant plans of the government to implement something in the next few years. Digital terrestrial TV in Latvia is fucked. Go buy a satellite dish or get cable...

Music played (on headphones) while writing this: Jefferson Airplane, Volunteers, The Who, My Generation, The Byrds, I Was So Much Younger, Tom Petty, Free Falling, Paul Butterfield Blues Band, Two Trains Running and The Mommas & Pappas, California Dreamin'

The bees, the Lithuanian hare and the Latvian turtle?

TeliaSonera's regional honcho Kenneth Karlberg, not-quite-yet-not-really-totalled resigned to getting just Latvian Mobile Telephone (LMT) told me that ultimately, speed is what telecommunications is all about. A truism, considering that all telecom signals move at the speed of light, which is as fast as you can go in this universe, but something more when you talk about the actual speed of information, the throughput and bandwidth. In this respect, there is still a way to go before Einstein dances with Schrödinger's Cat (whatever that means), which is to say that bandwidth (and the content/experience to go with it) are the tools of competition. Karlberg is convinced that LMT can match other operators in speed even if TeliaSonera doesn't get 100 % ownership of fixed network operator Lattelekom. I think he was talking about two kinds of speed -- the speed of deployment, where wireless can beat wireline hands down (you can activate your 3G phone in a shop, but the Lattelekom installer still comes in a few days to install a wire phone and DSL) and the actual speed of the service. Here opinions vary. I am not sure we can blast gigabit metropolitan wireless without frying the crows as they fly by, but I may be wrong. Gigabit to the household by fiber is possible and said to be being done in Japan.
Anyway, even with no deal done on who ultimately owns Lattelekom and how soon the Swedes get all 100 % of LMT, one area where we don't see a race for speed is in deploying HSDPA, the fast mobile internet and data service that matches lower-end DSL speeds (around 3Mbps, some claim 14 Mbps). For one thing, there are no HSDPA phones on the market yet, though a number are coming in 2/2 2006. However, Estonian Mobile Telephone (EMT) has already launched its HSDPA service and Ominitel, a 100 % subsidiary of TeliaSonera, will launch a service in June. Both companies are aiming the HSDPA at business users and offering various laptop cards (which makes sense, considering the HSDPA at its best can be a city-wide and mobile DSL substitute).
LMT at best will do some technical tests or pilot schemes with HSDPA this year, taking the cautious route. It hopes to be the winning turtle (I can't spell tortoise) among the Baltic hares. However, according to my sources, it will be soundly beaten by the Latvian bee (Bite Latvija). I predict the bee will buzz something about HSDPA over the next few days. Watch this space.

More on the no sale of Lattelekom

This is what I believe the present Latvian government intends to happen if the government's plans to sell only Latvian Mobile Telephone (LMT) to Sweden's TeliaSonera are implemented.
Lattelekom, Latvia's fixed network operator, is going to be an arms-length, state-owned company for a few years, probably starting its own mobile operator before being prepared for an IPO on one of the bigger regional (Nordic) or European stock exchanges. The state will probably keep a small share when that happens to get a revenue stream from what Minister of Economics Aigars Stokenbergs believes will be a stronger, more diversified and profitable Lattelekom.
Lattelekom will become a small to medium-sized regional competitor to its former half-mother in some niches (such as data communications) a provider of services that TeliaSonera doesn't offer (business process outsourcing, even with TeliaSonera as a potential customer) and a player in entirely new services such as intelligent, application-aware networks (with some help from MicroLink, the IT integrator that it recently acquired).
What the latter means is that the fixed network operator will offer a new, very sophisticated VPN layer when it connects the network to certain business customers. In other words, it will attach the corporate users to, say their Oracle or SAP application suite and have the network recognize and route. say, all their order messages and other related data traffic in a particular manner. It could even error check and, say, bounce back an order with an improperly entered number or whatever.
Such a network could also, at the VPN (maybe I am getting this wrong) layer, handle and prioritize content and services from a content provider, interact with CRM, etc. This is all from Cisco honcho Kaan Terzioglu's recent presentation. So that means that Lattelekom in Latvia and regionally could provide the backbone and hosting for this kind of stuff, grabbing up enterprise customers almost end to end, in fact, installing customized intelligent network based applications instead of just running a phone, ISDN or internet line to the enterprise. And here lies, perhaps, a threat to TeliaSonera...
Some of my sources say that Lattelekom chafed a bit under the half-mother, saying she was a little slow and conservative. In fact, some Lattelekom execs had mixed-feelings about being wholly owned by the Swedes, or at least they saw a certain downside.
This is not to say that Lattelekom going it alone as a state-owned company is all roses. When I mentioned this to my colleagues at my sometimes maligned (in this blog) paper, there was derisive laughter. They are pretty sure that once the state gets 100 % of Lattelekom, politicians will, to put it bluntly, fuck up the company. There is some truth to this, or rather, much truth. The Minister of Economics isn't really a politician, more of a technocrat and one of the few politics-connected people in Latvia who passes my "Alfred E. Newman" test (Newman is that wacko looking guy in the American Mad Magazine, who has a caption under him Not Insane).
Minister Stokenbergs has, for Latvia, some pretty sane (therefore unacceptable or at least strange on an interplanetary level to the rest of the loonies in politics) ideas, such as 1) letting Lattelekom do its business 2) changing laws so that, for example, management can get performance-based incentives, including options ahead of or after the IPO, etc.
On the downside, Lattelekom could lose the economies of scale that it enjoyed co-purchasing equipment and services with TeliaSonera, though I am not sure how much of that has been going on. At the end of the day, the Swedes may even come to an independent Lattelekom to get things done -- like some of their billing, books, network management, whatever can be done remotely over the network from the Baltics.
There is also the issue of whether Lattelekom can successfully start a fifth mobile operator in our land of 2.2 million (and falling) souls. Here the weird idea of buying Bite creeps in, but that is perhaps because I am sipping whiskey in the middle of the night on Latvia's Independence 2.0 Day. I suspect Bite could be an expensive proposition, especially if Lattelekom has to go against, say, Elisa in Finland. But at least Bite would give Lattelekom a foothold of some, say., 100 000 mobile customers in Latvia and much more if the Lithuanian bee is also bought.
This is descending into rambling hallucinations.

Music played while writing: Rage Against the Machine, Maggie's Farm, U2, Vertigo, Rolling Stones, Brown Sugar, Bachman Turner Overdrive, Let It Ride, Grateful Dead, Sunshine Daydream (a download described as Fucking Awesome, but having no good grass/or any grass in the house, I can't say.. :) :). Oh yes, and Jimi Hendrix (Live at Winterland), Sunshine of Your Love, instrumental, definitely in the Fuckin' Awesome category by me...

Minister says definite "no" to Lattelekom sale

Latvia's Minister of Economics Aigars Stokenbergs said "a crystal clear no" to selling 100 % of the fixed network operator Lattelekom to Sweden's TeliaSonera but said negotiations would continue on the Swedish company's offer to buy 100 % of mobile operator Latvian Mobile Telephone (LMT).
It was the first clear rejection of part of TeliaSonera's offer, told to this blogger. Stokenbergs said the main reason for rejecting the Swedish offer was not concern about market dominance voiced earlier by some government officials and analysts, but rather that Lattelekom could pursue a more independent business development strategy even if 100 % owned by the state. At some future date, the government would probably opt for an IPO of Lattelekom on one of the region's or Europe's larger stock exchanges.
More later...

F**K IT!!! (perhaps)

This is not so much about telecoms as it is about telecoms journalism. Last week, I got my good sources to give most of the details of the Lattelekom-Triatel deal to finish modernizing the fixed voice network using fixed wireless CDMA technology. I explained how Lattelekom would be buying the CDMA radio units, how most customers getting this modernization would continue to use their old fixed handsets, how a 100 kbps internet link would be possible for some, with high speed internet possible later and in some areas (likely at additional cost). I suspect I pretty much got most of the story ahead of anyone else and I submitted a good curtain raiser/exclusive. The newspaper shitcanned it. An exclusive, though not earthshaking story. So fuck them.
This blog is become more and more important for getting across what I know, both from attributable sources and well...others.

A later note
Just adding this note today, May 3, that I checked only the internet version of the paper last night when I first wrote this rant. It should contain the entire print edition text, but sometimes it doesn't.
The person who was news editor is relatively new to her job and, like many, clueless about telecoms stories or technology more complicated than a ball-point pen. So I am off to work to see whether the story was really canned in print as well.
The worst of it is that I spend time and effort at the editor's behest to add some comment from the side, a technique that is sometimes interesting and illustrates the impact of the story on someone the reader can identify with, other times, it is just following mindless routine. It was a bit more of the latter, as when we first revealed the Lattelekom-Triatel relationship we already quoted the managing director of the Latvian Telecommunications Association as saying this was a good thing. But I tracked down one contact (in Philadelphia) who is a businessman with a country house in some hell by the cartwheel place (for middle of f**king nowhere, Latvians say ellē ratā which really doesn't translate..:) ) and got his views, plus a short list of customers from Lattelekom who had CDMA fixed phones installed. As it is, a fucking waste of time, unless the print paper used it...
I don't have enough contacts at the local mental hospitals to find someone to say that modernizing telecommunications with wireless technologies was BAD because more demons would come to his/her head over the Satanic frequencies used by the great Satan Lattelekom. So I did my best...

Lattelekom's broadband game plan

Lattelekom has the biggest potential broadband customer base (a fair chunk of its 600 000 fixed network users) but is falling behind in the high-speed bells and whistles that some other providers can offer. Balticom, for instance, offers 10 Mbps in some Riga suburbs and a few downtown locations.
The biggest threat to Lattelekom is in the new/renovated housing market, where the inhabitants are likely to have the necessary discretionary income to buy high speed services and premium content (such as HDTV over the internet, when it become available). Here Latvenergo, the state owned energy utility and its subunit, Latvenergo Telecommunications, are putting in fiber to the home with speeds of up to 100 Mbps. While I am not sure just what you can do with 100 Mbps (show me the servers that can unload multiple streams of content at those speeds), Latvenergo has the advantage of putting in this service pretty much wherever new electricity connections are made. It has already run fiber to the residence in some multi-dwelling buildings and will soon be doing a single family home development of a number of homes.
My sources say Lattelekom has a plan to put up to 24 Mbps DSL in many Riga homes. In a major upgrade of its fiber optic network in most of Riga, the incumbent will install fiber to the curb units attached to mini-DSLAMs in local boxes that will deliver very fast DSL to an entire block of homes and businesses. This will involve replacing existing switchboxes with newer models that have back up and main power supplies, since the DSLAMs apparently need to be seperately powered. In other words, a bit of digging and installation.
Before that, you will probably see Lattelekom speeding up its existing DSL connections from the present 1 Mbps (pay LVL. 1.99 per month extra) to something like 10 Mbps just to keep up with the likes of Balticom and to at least match what Latvenergo will offer in its basic fiber to the home package.

Lattelekom, Triatel to sign agreement

A "marriage" at last. Lattelekom has announced it will sign a formal deal with cdma 450 operator Triatel on May 3 for the mobile/fixed wireless operator to assist in finishing the digitization /modernization of the network where use of non-wireless technologies is prohibitively expensive and, also, probably, to connect new customers in rural and remote areas.
This is nothing new for this blog. In March, I wrote:

Lattelekom + Triatel = True!

"Or thats what it says on the ladies' bathroom wall, where ( I am guessing, being male) messages of affectionate relationships are scribbled.
The "love story" is one that was hinted at a long time ago on this blog. Namely, Lattelekom and cdma 450 operator Triatel have been running a pilot project to "digitalize" certain rural areas using Triatel's fixed wireless technology rather than running fiber or cable to shacks in the woods. Over the past six months, several hundred phone lines have been installed in this way -- officially by Lattelekom, but with the network capacity and perhaps the phones provided by Triatel. Look for this to be officially sealed and announced in the next few months."

And back in September, 2004 when this blog was launched, one of the earliest posts said:

"Triatel's chief Mihail Zotov told this blogger in an informal conversation that CDMA 450 would be an excellent, relatively low cost technology for Lattelekom to bring both voice and high-speed internet to remote rural areas. In the Czech Republic, mobile operator Eurotel sold the technology as a kind of wireless DSL. CDMA has relatively wide signal propagation and, if old LMT NMT towers were used, the cost of bringing digital services to the rural dweller would be limited to the cost of the base station."

It is nice to be ahead of the curve. Remember you read it here first :)

Not a chance, half-mommy!

The news agency BNS reports Latvian prime minister Aigars Kalvitis as saying that "nothing has moved forward" in talks between TeliaSonera (the 49 % half-mother of Lattelekom and a 60 % indirect owner of Latvian Mobile Telephone/LMT) concerning the purchase of the remaining stakes in these Latvian assets.
BNS has it slightly wrong, a colleague who was there says Kalvitis merely said he thought nothing had happened and was waiting for Minister of Economics Aigars Stokenbergs to report when he gets back from accompanying the president on a visit to Finland. But the essence of what Kalvitis meant is true -- almost a year has passed and the only clear statements have been to the effect that Latvia will NEVER sell Lattelekom to TeliaSonera, no matter what arguments one makes about the far better viability of a company that combines fixed and mobile services. Lattelekom, at the end of the day, if this government has its way, will be effectively nationalized and put on the shelf waiting for a buyer. Its top management may then leave, plans for expanding the fixed network company into a broadband, IT, voice and data networks services provider and a major business process nearshore/outsourcing company will stagnate and the state will find itself owning an unsellable stranded asset. That, I am afraid, is the gameplan in a worst case scenario.
I still believe that TDC, who I have seen as a potential buyer, will retreat rather than advance in the Baltics. A sell off of the Bite assets may be premature, but analysts expect it to happen.
So there is no white knight out there for Lattelekom.

Digging the grave of classic telecoms?

I am posting briefly via WiFi from a Cisco conference in Riga, where I have just seen a demo of how, using IP phones and dual-mode (WiFi and GSM) mobiles, plus video calling, one can completely get around the classic switched telephony network. As I watched, I flashed back to the presentation of Lattelekom's first WiFi hotspot at a cafe in Riga a couple of years ago. The Cisco guy, Vladimir (also hosting today's event) made an IP call to Finland as part of the demo, which was like saying, this is digging the grave of classic telecoms. I thought it was a piece of unintended black humor, showing Lattelekom how it would be killed. Now some of this (Skype, SIP, other IP telephony technologies) is a significant reality.

Time will tell..and with bees you never know!

Well, I raised a bit of an uproar reporting in my newspaper the rumor that Denmark's TDC was going to sell Bite GSM (Lithuania) and Bite Latvija to the Finnish Elisa group. Everyone denied this, as one does a) if it is not true and b) if you are keeping your mouth shut as you should. Only the analysts seemed to believe the rumor would come true sooner or later. It was one of those believable things. And as one says in Latvia, with bees, you never know. You hear the rumor on this blog first!

Bees in the wind that whispers Elisa...?

Bite means bee in Lithuanian and Latvian and now the wind that often blows the bees about has brought an interesting whisper. Here it is.
Danish TDC, the owner of the Bite Group (which includes the mobile operator Bite Latvija in Latvia and Bite in Lithuania) is in talks to possibly sell both mobile assets to Elisa, the Finnish mobile operator which already has an operation in Estonia.
The private equity owners of TDC have apparently decided that the company should shed, or at least explore shedding some "marginal" operations such as the Baltic mobile operators to have a leaner, more Nordic focused operation.
The Nordic investment bankers Carnegie are said to be advising TDC on the possible sale of both Bites. They advised the sale of TDC to its current private equity owners.
Meanwhile, Elisa gets pan-Baltic mobile coverage. The company has been shopping recently with its aquisition of Finnish (virtual)mobile operator Saunalahti, a deal where Carnegie was also involved, advising the seller, Novator.
If what the wind whispers proves true (it may take weeks, anyone involved who confirms this on record to a bloggerist /blogger -journalist/ will get bigger stripes on his/her suit if the matter involves any stock exchanges :) ), then my theory of TDC as a possible buyer of Lattelekom falls apart and Lattelekom looks more and more like an aging orphan princess that will be taken out on a sled to the woods and left for the wolves by its (then) sole owners, the state. But that is another story.

Ministers change, Satan remains Satan

Two out of three ministers in the "troika" that has been pondering the sale of Latvian Mobile Telephone (LMT) and Lattelekom to TeliaSonera are gone (Minister of Transport Ainars Slesers fired, Minister of Economics Krisjanis Karins resigned), but the reshuffled government still seems to regard TeliaSonera as "the Nordic Great Satan" who will never, never, never get both LMT and Lattelekom.
The new Minister of Economics Aigars Stokenbergs has declared that Lattelekom will not be sold to TeliaSonera. Period. It will be nationalized instead, at least temporarily. So writes the news agency BNS.
Strangely, the Nordic Satan's top honchos are the last to get the message. I seriously think they believe they have a shot at Lattelekom. Now is the time to push for a deal to get LMT completely under its wing and shake the company up a bit out of its self-satisfaction at being the biggest earner in Latvian history. As for Lattelekom, forget it...
The same goes for the company's eventual fate --"forget it", since a state-owned fixed network operator is the last thing anyone wants to buy (at least at a price the state would find interesting). Look for many of the present management to leave rather than be under 100 % state ownership, even for a short time (and short could be a couple of years).
About the only ray of hope that some insiders in Lattelekom are clinging to is that Danish TDC, now owned by a private-equity consortium, may buy Lattelekom and combine it with Bite Latvija to create the seamless fixed and wireless offering that customers expect (this was the point with having LMT and Lattelekom together under TeliaSonera). For TDC, Lattelekom would offer its Baltic data transmission network (with a POP in Sweden) to complement TDC's asset Song, as well as its business process outsourcing unit C1, network builder Citrus Solution, the data link (POP) in Moscow, IPTV and a lot of other stuff. However, for this to work, all parties have to move quickly.
As it seems now, the statement by Stokenbergs is yet another nail in the coffin of Lattelekom's corporate value.

Bite Latvija inks deal with Vodafone

Bite Latvija has signed a cooperation agreement with Vodafone. Details were not given in an official announcement.
In all likelihood, it will be similar to the arrangement that Bite GSM has in Lithuania, were Bite users can roam in Europe and internationally on the simplified "Vodafone World" tariff scheme. When Bite came into Latvia, the relationship with Vodafone was presented as one of the advantages it would offer to frequent and business travelers.
Just how much of an "edge" the lower Vodafone rates will offer in terms of competition is under some doubt in the medium term, since the European Union is putting huge pressure on companies to lower their roaming rates. So at the end of a hypothetical "week" (avoiding "at the end of the day") the difference between roaming on Vodafone and anyone else may be marginal. The attraction may be in how billing is presented (I see all my Vodafone roaming calls in, say, Germany, in detail).

MTS GSM, ho hum...
In other news, Master Telecom, previewed on this blog some months ago, has finally announced its MTS GSM service, not to be confused with MTS, the unrelated Russian operator. If you ask my opinion, Master Telecom's "problem" is that they are launching with a very unspectacular and hazy brand. Compare to Toxic, Amigo, Hallo! and Ura, the other (though pre-paid) services aiming clearly at a youth/teen/older child and low income, no frills markets. These are the segments where people still do not have mobile services, so you can get new customers. MTS GSM is not a brand you want to dance to...
Having said that, I should note that the company expects to get around 2 % of the Latvian market, maybe 20 000 users. Enough? We shall see...

IZZI aims to pull ahead of Baltcom

IZZI, the cable television, internet and mobile telephony service provider, has boosted its cable TV subscribers to 100 000 by acquiring FAO, a cable TV and internet company operating in several Riga suburbs. IZZI executives say they aim to surpass Baltcom (with around 130 000 subscribers) and become the largest cable operator in Latvia. More acquisitions of smaller operators are planned.
By throwing down the gauntlet to Baltcom, IZZI is also starting a contest of two different technology and program packaging mixes. Baltcom is offering a large number of digital cable channels (0ver 100) for a monthly price of LVL 10 to 15 (there are various mixes in various parts of the Baltcom network). Many of these channels are (for me) obscure Russian language or narrow interest (Wine Channel). Baltcom's digital TV offering is often promoted as best purchased as part of a triple-play package combining internet and fixed network telephony (where available). Baltcom uses its optical network (which it is apparently building out) and MMDS (a terrestrial digital broadcast technology that requires special equipment, usually to capture the signal for an apartment building with an internal cable net).
IZZI is distributing its digital TV in smaller, well defined packages grouped by interest (news, sports, music, Russian, film, etc.) with the basic service costing LVL 4 per month and the interest packages LVL 1.50. It offers, in effect, a menu-type service -- add whatever you want to the basics. The more interesting aspect is that IZZI is able to deliver its TV offering as IPTV, which can be carried as a service by other cable TV/Ethernet based internet and cable TV operators. This means that IZZI can capture subscribers by partnering with smaller and regional cable operators across the country. All it needs to do is deliver the IPTV «master» signal to the local network, which then resells it. No special, proprietary technologies (such as MMDS) are involved.
In my view, IZZI has a very flexible approach to expansion. It can expand by acquisition, as it has with FAO, or it can expand its subscriber base by partnering with other operators, be they cable TV or «pure» ISPs (with sufficient bandwidth) by offering to deliver IPTV down a backbone. The Latvian network solutions company Santa Monica Networks is rumored to be building such a backbone for IZZI that will link it to at least one other operator in a town outside of Riga, where the local ISP will then be able to deliver IZZI's IPTV.
The development is also a signal that Latvia's smaller cable operators, ranging from those with a few thousand subscribers to small, community or building -based networks, are starting to consolidate and many will eventually be bought by larger players. It remains to be seen what moves Baltcom will make. There is nothing to stop them from expanding by acquisitions as well.

Wish the all could be California Ferengi

Someone asked for a picture of my activities in California. Here it is.
You meet a lot of strange people there...

The half-mother a desirable acquisition?

The Swedish business newspaper Dagens industri published a list of Swedish companies it thinks are likely to be candidates for acquisitions (friendly or otherwise). Among them is TeliaSonera, the half-mother of Lattelekom and 60% plus holder of Latvian Mobile Telephone (LMT) . Also mentioned is Tele2, the owner of (big surprise) Tele2. Regarding TeliaSonera, the newspaper says it is ripe for acqusition because «has too much money, too little growth and fast-growing companies in which it has an interest. All the ingredients are in place for a change, but also in place are the Swedish state and the Finnish state.»
Readers of this blog will recall that we have, several times, floated the idea that TeliaSonera could end up as part of a greater European or global organization, pretty much for the reasons mentioned by Dagens industri.
I will blog something later on the IZZI acquisition of FAO, a Riga cable TV company, and on the post-paid virtual mobile operator Master Telecom, launching services next week.

Busy IZZI

The cable TV and telecoms company IZZI will report its 2005 financials on April 6 and probably also announce the acquisition of another cable TV company and/or ISP. Rumor has it that it may be a company outside of Riga, although one source close to IZZI says this isn't so. Another source says that IZZI has been working with a networking company to transmit its IPTV service to a smaller city somewhere in Latvia, apparently for redistribution by a local ISP.
This rumor came up in connection with talk that some ISPs (internet service providers, about time I explained that) were dissatisfied with the internet exchange LIX, which is owned by Lattelekom, Telia, Latnet, and MicroLink (now part of Lattelekom, although it was supposed to sell its physical network assets). Apparently, there is unhappiness with the fees charged and also with the quality of service (there were supposed to have been incidents while I was away). A Latvian networking company, Santa Monica, is reportedly organizing an alternative internet exchange that would run on the same physical network as LIX, but with better (they say) routers and network management software. It would be an interesting case of one layer on the network cannibalizing another.
More on that, perhaps, next week. I may get some information when I talk to one of the Santa Monica honchos at the end of the week.

More remarks from afar

I am back in reality from Las Vegas and also back in the land of "free" high-speed internet (free as included in the price of the hotel). The only good news I have picked up from Latvia is that Lattelekom is offering 1 Mbps download, 512 Kbps upload HomeDSL for an extra LVL 1.99 per month, with the first month free to those who requested it by March 27. The only bad news is that I could not access the www.dsl.lv page to get my free month, presumably because I was outside of Latvia and the HomeDSL network. Oh well.
In Las Vegas, you have to be pretty far off the strip to get free internet, otherwise it is USD 10 for 24 hours, as it was at the ridiculous Luxor where we stayed (not my idea). So anyone travelling to Las Vegas, Google for free internet, plus a free shuttle to the main attractions, and you will get a far better deal. Plus make sure your friends and family in Latvia get Skype on their home/work computers, so you can make computer-to-computer calls for free. SkypeOut, the service that allows you to call ordinary phones, will eat up EUR 0.20 per minute to Latvia, so calling on a phone card may be cheaper.
One major "problem" here on the West Coast is that one is -10 hours from Latvia, making it impossible to overlap business days. Right now (before the US goes to Daylight Savings Time) it is 20:15 here, but 7:15 AM on a Saturday in Latvia. I spend the first week of my vacation sending SMS to all kinds of unanswered calls that I got at 1:30 AM local (California) time, telling the callers that I was in the US. So if you are expecting calls on your roaming LMT/Tele2 or Bite phone, turn the phone to silent and then SMS your callers. With free internet, it should not be hard to keep up with any e-mail.
As for Vegas, I will diverge from telecoms simply to say it is the world's biggest balagāns. I don't want to explain that Latvian term, so if you don't know what it means, ask your nearest neighborhood Latvian.

Some remarks from afar

Well, I have been in California for almost a week. I was at a mall in Burbank, hanging around, waiting for my wife to return from a store that interested her, when I started talking to some guys at a T-Mobile stand. It turns out that a lot of the goodies we take for granted are still on the future horizon here. They had heard of, but didn't offer any of the Nokia N series phones. HSDPA, which we don't have but will soon have in Latvia is something they have hardly heard of, nevermind EV DO, the high speed wireless internet standard that Triatel offers and that will be capable of multi-megabit speeds by the end of this year.
If you have a Latvian GSM (LMT) phone, the coverage has been good so far, with Cingular popping up more often than not. It is possible to call US mobile phones of unknown network (such as the phone of a former colleague who moved to California some years ago), but not possible to send SMS.
So far the places we have been staying (imcluding a very cheap motel-type place in Hollywood) have had good free wireless internet or free internet (Ethernet line here in San Diego). I have used SkypeOut to make calls to US phones, but Latvia remains expensive (around EUR 0.20 per minute) so I have not made any Skype calls (also, there is a rather large time difference and by the end of the day here, it is the middle of the night in Riga).
Off on a day trip to Tijuana, Mexico today (Saturday). A day of sad remembrance in Latvia, the March 25, 1949 deportations.

Wish they all could be California girls...

Well, folks, even bloggers have to have some downtime. As it is, I am flying with my family (wife, 10 year old son) to Los Angeles via London over the weekend. We will visit Universal Studios, Hollywood, the San Diego Zoo, Las Vegas, the whole scene. Just taking it easy. It is my two weeks away from the daily paper as well. For the simple reason that I am away from Latvia, I won't be posting much from the US (as I would were I at some interesting IT or telecoms event). Just so you know, my dear readers.

Lattelekom + Triatel = true!

Or thats what it says on the ladies' bathroom wall, where ( I am guessing, being male) messages of affectionate relationships are scribbled.
The "love story" is one that was hinted at a long time ago on this blog. Namely, Lattelekom and cdma 450 operator Triatel have been running a pilot project to "digitalize" certain rural areas using Triatel's fixed wireless technology rather than running fiber or cable to shacks in the woods. Over the past six months, several hundred phone lines have been installed in this way -- officially by Lattelekom, but with the network capacity and perhaps the phones provided by Triatel. Look for this to be officially sealed and announced in the next few months.
This also means that Lattelekom, a faithful Ericsson and Alcatel infrastructure customer, is entrusting part of its traffic to infrastructure delivered to Triatel by China's Huawei. That is another "secret" partnership we revealed on this blog some time ago. For Huawei, it is a significant indirect endorsement.

Minister of Transport (and telecoms) fired

Prime Minister Aigas Kalvitis asked Minister of Transport Ainars Slesers to resign, which the minister did. The reason was that Slesers "had lost the public trust" because of his alleged involvement in a bribery scandal surrounding the election of the mayor of Jurmala, a Riga suburb by the seaside. Transcripts of an eavesdropped telephone conversation seem to indicate that Slesers was aware of an attempt to bribe a city council member to vote for the candidate of Sleser's Latvian First Party. See the earlier item about "the biggest cretin". Slesers has denied any wrongdoing.
I won't go into the bizarre and sordid politics of the whole affair, but will instead mention a few things that happened on "his watch" as MoT.
Most of the events under Slesers were on the "physical" transport side. Ryanair and Easyjet were brought to Riga, opening low cost travel to and from Latvia to new groups of people, from Latvian middle class families to boozy British bachelor party groups (they spend their money here, fine with that).
In telecommunications, Slesers was running the ministry when the third UMTS/GSM licence was auctioned to Bite Group. This has been a major stimulus to competition for mobile voice and data services. His time as minister also saw the implementation of number portability which has generated a "churn" of around 9000 mobile customers and 1000 fixed line users. With more than 1.8 million mobile and 600 000 fixed line users, this was less than trivial and had nothing to do with who was MoT.
Slesers seems to have a fairly competant team of professionals in the MoT under the Communications Department, who have their fingers on the pulse of most things. However, the market is mature enough to move ahead without much prodding from the government and we will see such things as very fast and affordable broadband, fast mobile internet, VOIP as the default voice platform for broadband users, IP TV, user-generated TV, HDTV etc. etc., all coming through a fast fixed or mobile link regardless of who is the new MoT. Rumor has it that the post may be filled until the elections in October by Latvian First Party (LPP)parliamentary whip Juris Lujans. That is, unless the LPP leaves the government and brings the whole shithouse down. But that is unlikely.

Lattelekom prepares to serve God (Latvian-size) as a customer

Lattelekom has purchased some Siemens DWDM equipment and will be installing it on its backbone network by mid-year. According to my source, this allows a throughput of 40 simultaneous 10 Gigabit data flows per optical strand. That is like 0.4 Terabit, and there are lots of strands in an optical cable. So I figure this is enough data capacity for Dieviņš, the kind little Latvian god who rides his horse without disturbing a tender blossom (fire and brimstone on a Judeo-Christian scale is a bandwidth hog). Anyway, the kind of capacity Lattelekom is putting on its carrier and, possibly, metro networks is enough for the data transmission needs of a small universe and its god. Like Dieviņš, who, after all, can offer around a million Latvian folksongs or dainas for downloading. Beat that iTunes!
But that is probably not what it will be used for, it is going to be there for the high capacity multimedia services the network will carry when Lattelekom a) finally kicks up the default DSL speed to around 10 Mps and starts pushing lots of TV, including customer-created content and HiDef channels down its IPTV network.
The Siemens equipment was purchased jointly with the half-mother TeliaSonera, which is also upgrading its backbone.
Now one just has to watch for Skandinieki, the Latvian pagan folk music group to be singing outside Lattelekom offices to know that Dieviņš has signed up as an enterprise data customer. And then another network upgrade will be necessary...:)

Which one is the biggest cretin?

I won't get into Latvia's latest political scandal, which is bizarre and rich in detail for black humor cynics. Suffice it to say that claims that GSM phone calls cannot be eavesdropped are false. The transcripts(disclosed by Latvian TV) of top Latvian politicians apparently talking openly about efforts to bribe a newly elected member of the Jurmala (a posh seaside Riga suburb) city council prove that GSM eavesdropping works.
A quick Google of "mobile encryption" reveals that finding this rocket-science technology isn't rocket science. I mean, if you are going to pull off a blatantly corrupt deal (sending two expendable f**kers to put EUR 20 000 in the pockets of a politican cooperating with the anti-corruption agency), either don't talk about it on your mobile or at least encrypt the calls or use code words. Apparently, the utterly depraved and equally fuckwit dumb Latvian political elite doesn't have the same common sense about such matters that any brain-burned crack dealer has in some American slum.
When it became apparent that the bribe had not worked, one former political honcho and eminence grise suggested electing deputies for their political opponents (who had now won the city council's election of a mayor) based in the criterion : which one is the biggest cretin?
I think we now know.
It should have been political suicide (at least), and in most civilized countries, it should have been jail, but this is Latvia and no heads will roll unless a miracle happens. But hey, this isn't a political blog...

The half-mother wants an IPO?

TeliaSonera honcho Kenneth Karlberg is reportedly meeting with Minister of Economics Krisjanis Karins March 8 and one issue they may discuss is the possibility of listing Lattelekom on the Riga Stock Exchange as a step that would facilitate a number of solutions to the seemingly endless effort by the Swedish half-mother to get majority control of both the fixed line operator and Latvian Mobile Telephone (LMT). All else failing, TeliaSonera will settle for LMT alone and that, as far as the otherwise intractable Latvian government goes, should be not problem.
There are several things to be gained from doing a Lattelekom IPO:

1) Both sides would get a market price/valuation for the company instead of spending money finding investment bankers who a) would value the company cheap for the buyer and b) dispute that valuation for the seller. At the end of the day, each would use some kind of analogy to a company that is already on the market, so why not go to the market directly?

2) The IPO could be done by diminishing, perhaps proportionally, the holdings of the existing stakeholders to create a pool of shares (Lattelekom would be converted from a Latvian limited company or SIA to a joint stock corporation or a/s) for the IPO. It could be in the range of 20 % or something. This would mean no one would have a clear majority, making one of the options below more attractive.

3) As in Estonia, where it now has just over 53 % of Eesti Telekom, the full mother of fixed line operator Elion and Estonian Mobile Telephone (EMT), TeliaSonera would buy shares on the market to get just over 50 % of Lattelekom. It would do so without the embarrassing attempt to woo minority shareholders that flopped with Eesti Telekom, although there is one version that I have heard that it was intended to show that TeliaSonera would not pay just any price for Eesti Telecom.

4) If TeliaSonera decided not to press ahead with a purchase of Lattelekom for whatever reason, a fair portion of the shares could be sold to a third party financial investor, such as a mutual fund or private equity fund interested in holding Lattelekom shares in its portfolio for their possible dividend flow or capital gains. This would provide an exit strategy for Lattelekom and also make an exit easier for the financial investor (who would not be getting 49 % of Lattelekom as the bedmate of the other slightly more than half -mother). Quite frankly, anyone who has been watching the situation can fairly conclude that, as far as what to do with Lattelekom, the Latvian government is basically totally batshit wacko... Deprived of 51 %, it could not make things worse either for the new investor or itself.

5) Finally, this arrangement would allow any of the shareholders to sell to a White Knight (anyone but TeliaSonera!!!) telco that would come in and buy most or all of Lattelekom, fulfilling the dreams of the Latvian government that someone reputable could be found to take a majority holding and usher in a new era of cut-throat competition in fixed network services. (Like what about the fact that more than twice as many people use mobile for voice, that there is a range of regional internet choices, some pretty good speeds for under LVL 10 per month, that there is practically free VOIP, like there is a competition problem? What planet has the government been visiting? See the batshit wacko remark above..)

Anyway, all this would be possible after an IPO. The idea is nothing new, by the way, the Riga Stock Exchange, when it was under different management, proposed as much in 2003, before
and the government had settled their arbitration dispute. The idea of giving Lattelekom to anyone but TeliaSonera can also be found in government position papers that fluttered into the hands of this blogger as the government of Einars Repse fell in the spring of 2004.

This was written while listening to the following tracks (not in this particular order):
Rage Against The Machine, Maggie's Farm (Dylan cover), U2 Vertigo, Grateful Dead, Sunshine (live), Jimi Hendrix, Sunshine of Your Love (Cream cover, live at Winterland). Eddie Grant, Electric Avenue, Green Day, American Idiot.
BTW there is something seriously fcuked with blogger.com, keeps disconnecting.

A new video blog attempt

I tried to do a video blog avoiding Google Video, which absolutely sucks. We'll see if this outfit, YouTube, is any worse...


We'll see.

Waiting for Monday and the whipping post

It looks like a certain newspaper will finally publish my story about Lattelekom and Golden Telecom, also giving the final version of the little bit of friction with the Swedes, on Monday. See the earlier post on No cow, no ice. There's also some talk that next week, the Public Utilities Regulatory Commission may get down to at least threatening to kick some ass among the many telecoms operators who have failed to report company data by the February 1 deadline. Reminder letters have been sent and widely ignored. Most of these are your Sharaskin & Sons outfits with a small number of customers, but there may also be a bigger fish about to be lashed to the whipping post. Well, not exactly a fish, a different creature.

No cow, no ice, let's try to do it nice...

No cow, no ice, let's try to do it nice...
That bit of doggrel (poetry written by dogs :) ) sums up the real truth behind the whole TeliaSonera, Lattelekom and Golden Telecom uproar in a teacup.
TeliaSonera doesn't object to Lattelekom doing a deal with Golden Telecom, they were just ever so slightly peeved that doing a big dog and pony show about it wasn't coordinated according to procedures. NOTHING was said about Golden Telecom's links with the Alfa Group. Once these procedural matters are ironed out, the whole thing can be announced with a brass band for all anyone cares.
As for the planned February 27 press conference, it fortunately didn't happen because the Golden Telecom executive couldn't make it. Up to you to decide whether he was the dog or the pony. But alls well that seems to end well. Forget the bizarro Swedish expression about a cow on the ice. The cow was never there. Sometimes the truth is more boring than a potentially good story. But the point of reporting and good blogging (even in a somewhat gonzo vein) is to stick to the truth as much as possible.
At the same time, there was enough background noise between TeliaSonera and Alfa to justify writing the cow on the ice post. It's a blog, after all. The wackazoonie (nice new word, eh?) story about Alfa lusting for Lattelekom by dear Natalia of Business & Baltija only tossed a log on the bonfire of vanities.

Lattelekom puts a cow on the ice?

There is a bizarre Swedish expression for creating a perilous situation ko på isen or a cow on the ice. This seems to have happened with Lattelekom's pending deal with Russia's Golden Telecom, partly owned by the Alfa Group (and Norway's Telenor). The deal is for a point-of-presence (POP) in Moscow that would handle some of Golden's data and voice transit (IP voice?) to Western Europe.
Makes sense - except for one thing. Alfa Group has been at loggerheads with Lattelekom's half-mother TeliaSonera about a Turkish mobile operator and apparently other issues. So what has happened is that some TeliaSonera honchos are asking Lattelekom to at least cool it with the publicity about the deal with Golden. So there may be no press conference on February 27 as announced earlier.
Another reason is that Natalia Vasiljeva, the IT and telecoms reporter for the Russian-language Business & Baltija (the newspaper, like Prince, known as &) wrote that Alfa Group might be interested in buying Lattelekom. Purely speculative, but this may have freaked out some of the Swedish honchos. Don't read Russian, this is what folks say Natalia wrote.
Given that the Latvian government won't sell Lattelekom to TeliaSonera, but rather, to anyone but, should it surprise anyone that at least one anyone but has show up? Do Russian companies not like bargains (without Latvian Mobile Telephone, with just a fixed network, 75 000 DSL lines and its two new subsidiaries, Lattelekom is still less than hot...)?
That this Russian company may be thinking the same as & is no surprise, even less of a surprise to the Latvian government, which has practically been dangling the company to all the anyone buts of the world (there aren't too many of them). So now you may be starting to get what you wanted, at the expense of a serious cow on the ice freakout by the other half=mother. Next step, what will the conservative Latvian nationalists in the Saeima say about selling the main national telecommunications network to a Russian company controlled by an oligarch-- Mihail Fridman, if I am not mistaken?
The problem with Russian ownership (Russian oligarchs are interested in making money efficiently, otherwise they would be beggar-garchs or whatever) is that oligarchs (like any Russian, except they have lots of money and economic power to take away) are not sheltered from the whims of the Russian state. So if Mihail Fridman gets on the bad side of the Putin Kremlin, his properties could end up the properties of the not-so-whimsical Russian state.
This could mean a couple of weeks of merriment...
Oh yes, TeliaSonera (Telia at the time) had an attempted marriage with Telenor that put Britney Spears' antics in Las Vegas to shame. The whole thing fell apart, some Norwegian honcho even punched out a Norwegian radio reporter as the whole mess was wobbling and reeling. A real circus. So we have a corporate nemesis and a a spurned ex-fiance out there on the ice with the cow... :)

Lattelekom to flip the bird?

Here's the latest from my murky unnameable sources:
Lattelekom is going to crank up the speed of its undersea optical cable to Sweden to several gigabits. One reason is that it is on the verge of doing a major deal with a (Scandinavian?) television organization that will use the fiber to distribute its digital TV content wholesale by landlines rather than satellite (the bird). It will probably be a regional deal involving all three Baltic countries. Lattelekom and its regional partners will provide the MPLS backbone to deliver a high quality IP TV signal to cable operators. Tests show that the result is better than digital satellite (depends on a shared or individual dish antenna), which is the way a lot of cable operators get their signal (in Latvia, from Latvian TV's dishes on Bunny Island - Zaķu sala).
MPLS allows a better quality of service implementation and the ability to shape the way the backbone handles the packet stream.

And from not so murky sources:

Look for Triatel trying to pre-empt HDSPA services on Latvia's UMTS networks (0nly Bite Latvija has said it will implement) by boosting its nomadic wireless internet speeds to over 3 Mbps by upgrading to EV DO rev. A. The current version of EV DO manages up to 2.4 Mbps, but Triatel talks of a 1 Mpbs link just to be safe. However, the cdma-450 operator may be racing against a three-legged horse -- there are very few HDSPA phones and radio cards available.
Also look to Triatel implementing "plastic roaming" starting with some Russian GSM operators and then Western Europe. This means that sticking one's Triatel SIM card in a GSM phone will work with these roaming partners. Next step -- hybrid phones that work on the European GSM frequencies. Then the two phone problem will be solved. Huawei, which came out of the closet about its relationship with Triatel recently, says it will have hybrids, too. Huawei is building Triatel's network in Latvia. Official at last!
In 2008, look for mind-boggling wireless internet speeds of over 70 Mpbs downlink with EV DO rev B coming online. Don't know what Triatel's plans are, the technology was described in a presentation by one of Huawei's demi-honchos, Jeff Wang. Sun Gang, a gentleman I have spoken to a few times (he spilled the beans about Latvia) was also there at the joint dog and pony show in Riga. But no Chinese snacks, just typical (but good) Latvian presentation stuff :(.

Some quick definitions of the weird

As I may have gained a few readers while at 3GSM, I want to explain some of the strange terminology used from time to time in this blog, namely:

A half-mother - derived from the use of the maternal parent to designate the parent company in some European languages Muttergesellschaft in German, Moderbolag in Swedish. Any company owning around 50 % (or 49 % as TeliaSonera owns in Lattelekom) is, thereby, a half-mother.

Honchos – derived from, I believe, the Spanish, meaning powerful, leading person and decision maker. Kenneth Karlberg, who has some long title describing the entire geography of the regions he is responsible for at TeliaSonera is easier called simply a honcho.

The widow's son – derived from the Latvian atraitnes dēls and used to describe an earnest young man making a best effort, at least as I understood it to be meant. Used by a member of my family to describe the Minister of Economics Krišjānis Kariņš, who is one of the three ministers trying to figure out whether to sell Lattelekom to TeliaSonera or not. As far as I know, the Minister isn't a widow's son in real life.

Other bizarre terminology will be explained as it comes along.

The inexhaustible patience of the Swedish half-mother

Despite all the adventures in Barcelona with pickpockets, a 3GSM World Congress press room like a refugee reception center and a Third-World commuter train experience, I did come away with some insights on the state of play between TeliaSonera, the half-mother of Lattelekom, and the Latvian government, the other, slightly-more-than-half mother.
First, there is an ongoing discussion, most of it apparently by written communication, on models for the privatization of the remaining 51 % of Lattelekom. Since price is a sticking point, and since the Latvian side imagines that Lattelekom (which they want to sell as a bare-bones fixed network operator) is worth more than some of the figures suggested by TeliaSonera, one possible model is to list Lattelekom on the Riga Stock Exchange and get some kind of market driven benchmark.
The price, of course, would be partly held up by the fact that there was one major buyer (TeliaSonera) always in the background, but also depressed by the fact that, in the long run, who needs a fixed line operator with 1/3 as many users (600 000) as Latvia's mobile operators put together (around 1.8 million)?
Both of the other companies in the Baltic in which TeliaSonera has acquired a majority holding (Lietuvos Telekomas and Eesti Telekom or was it Elion/?/) are traded on stock exchanges. In Estonia, TeliaSonera had a hard time prying a few percent shareholdings loose from the state, so Latvia has not been the only hard nut to crack in the region (never mind the mess the Swedish company faces with its attempts to buy Turkcell, etc.).
Still, it appears that nothing will happen until 2007 at the earliest, after Latvia has had its parliamentary elections in October 2006 and a government is formed. If the present coalition retains power, there can perhaps be some movement along the "share-listing" path.
One possible worst-case scenario is that Aivars Lembergs, the controversial mayor of Ventspils (who has great support in the polls) may end up forming a populist/strong-man led government. Lembergs has been hostile to foreign investment and Sweden in particular. This could lead to a scenario of a) continued stalemate or b) the pull-out of TeliaSonera from Lattelekom in exchange for 100 % of Latvian Mobile Telephone (LMT).
To me, it seems that TeliaSonera probably has a "plan B" for making LMT into a modern, mobile-centric wireless voice and data services enterprise that could develop any necessary fixed line (or fixed wireless) assets so as to offer a complete integrated services platform.
In that case, the biggest problem will be in getting LMT's management to be less conservative and, as some say, a bit arrogant with its own success hitherto (in terms of relentless record earnings, etc.).
For Lattelekom, the sale-to-anyone-else scenario will involve a longer period of state ownership while the company is prepared for this offering. As I have written before, this means an almost certain loss of many of its present top-management assets, who will not work in a 100 % state-owned telco (probably the only one in the EU in 2007 or 2008, when this scenario could come to pass). The effect on the quality of service and, above all, on the creativity of new services, flexibility, etc., that will result from political ownership will drive even more customers to smaller, more flexible and customer-oriented alternative operators and to all-pervasive wireless (voice, data, even entertainment such as TV ) service providers.
At the end of "the day" (lasting, say, half a decade) we may see someone finally taking the Lattelekom fixed network off the state's hands for a low price in order to use it for data, IPTV, and wholesale capacity provision to the private operators that will have taken over much of the dwindling fixed network customer base (mainly broadband to the home, some business services, and IP TV).

Bite hints at early 3G launch

Bite Group (the Lithuanian-Latvian organization running mobile operators in both countries) sees itself on the right track as its representatives visit 3GSM World Congress in Barcelona. Zilvinas Kuchinskas (whose name I may have mispelled) told me that Bite was both inspired and encourged by what they had seen and hear at the global mobile telecoms event.
Kuchinskas also strongly hinted that Bite would make an announcement about 3G services in Latvia "pretty soon". That this will include a flat rate wireless data connection seems certain, but it is not certain that Bite will launch with HSDPA, still seen as an emerging technology in terms of handsets and PC cards. However, once HSDPA devices are available, it should be a hot technology.
The experts here also expect 3G to take off very fast over the next couple of years, especially with drivers like mobile TV, entertainment and games. But at the same time, other technologies such as WiFi and WiMax will be nipping at 3G, especially with Nokia announcing that it will be making multi-functional radio devices capable of using GSM, 3G, WiFi and WiMax networks.
There is also an event here where Niklas Zennstroem will talk about Skype going Mobile. Unfortunately, due to the whole mess with me having my wallet stolen, I spent much of the afternoon phoning banks, cancelling cards and talking to the Spanish police. I must say that I got off pretty well compared to the several "brothers in misfortune" (bēdu brāļi) as Latvians would say. The other complaints being heard at the police office involved whole bags with laptops, mobile phones, air tickets, passports, passports with US visas, lots of money (I lost around LVL 40 maximum), in otherwords, I only stepping in shit, these folks got hit by shitstorms. It has been a merry time for thieves and pickpockets here, adding to the already bad legends one hears about Southern Europe and the so-called Latin countries.

Jose good, pickpockets bad

The session with Jose the Bureaucrat was actually OK, gave some insight into Latvia's problems. On the way from there, however, some m-f lifted my wallet, credit cards, the whole business. Hour on the phone to cancel all cards, useless fucking mess.

Jose the bureaucrat and the Great Clusterf**K

Well, we are off to a great start here at 3GSM World, the press center has no power, no WiFi, no Ethernet internet access, in short, a total clusterfuck of a situation, and a great recommendation for the ability of whomever is supposed to be running these technologies here.
Also our hosts for this event have scheduled a meeting tommorrow with the Spanish regulatory authority at the same time at as the top honchos like Arun Sarin of Vodaphone, Olle-Pekka whatshisname of Nokia and others are scheduled to give keynotes. We will instead be talking to Jose the bureaucrat about regulation in Spain, of little but academic interest.
In addition, the organizers of the big even failed to send me the press registration bar code, leaving me and others standing in line for about an hour. Oh well... more later.

Charlotte's footsteps and Kenneth's forehead

This may seem like a bizarre title for my first post from Barcelona, but it sums up some of the important matters.
First, who is Charlotte? She’s Charlotte Züger, a press spokesperson for TeliaSonera who I called recently on an IT related story. Charlotte talked to me for about three to five minutes and all during that time, I could hear her footsteps. She was walking down a hallway, probably in the TeliaSonera Stockholm office, away from here desk. Although I called the Swedish “landline” number for her office, she answered on a mobile phone for the simple reason that THERE ARE NO MORE LANDLINES at TeliaSonera. Everyone is mobile, either inside or outside the office, and everyone is available almost always.
To sum it up, for voice, mobile is the future and has been the future for a couple of years. This is what 3GSM World is all about, mobile is where the personal communication environment is going. TeliaSonera realizes this and is probably placing most of its bets on a mobile future for its customers as well, both in Sweden and outside.
And so who is Kenneth? Kenneth Karlberg, the chief honcho of TeliaSonera’s Baltic operations (Denmark, Norway, whatever as well). Why is his forehead interesting? He has been beating his head against the stonewall put up by the Latvian government against the perfectly rational idea that TeliaSonera should acquired control of both Latvian Mobile Telephone (LMT) and fixed-line operator Lattelekom. The government thinks it is better for “competition” to have a “orphan” fixed line operator to be sold at a fire sale, rather than a strong fixed-mobile platform the offers a seamless solution to business and private customers, like similar operations do in dozens of countries.
I think we will hear soon from Kenneth of the battered forehead that he will follow in Charlotte’s footsteps. that is, go with the mobile. Take LMT, best available and f**k the rest (unfortunately). But I probably won't hear it here (officially, nor even in unoffical whispers) here in Barcelona.

LMT profits "over the hill" at record level

Latvian Mobile Telephone (LMT), which is 49 % owned by Sweden's TeliaSonera (and indirectlty via Lattelekom's 23 % holding), posted record 2005 after-tax profits of LVL 56.4 million, only slightly up from LVL 54.6 million in 2004. Turnover rose to a preliminary LVL 168.4 million, compared to LVL 149.3 million in 2004.
The figures show that profitability at LMT is flattening due to increasing competition and an expansion of the client base to lower revenue-bringing, less profitable customers. This is inevitable as the number of mobile users approaches or may even have passed 1.7 million of a population of around 2.2 million. It can be reasonably said that the company is past peak on margins and may have reached the top of its profit figures in absolute terms.