Bite talks about mobile entertainment

I recently did an e-mail interview with Šarunas Čomentauskas, marketinga manager of the BITĖ Group regarding their plans for mobile entertainment. This was research for an article I did for Kapitāls, the Latvian language business magazine that is part of the LETA group of information services companies that I work for. It is interesting enough to publish here (also easy, since our correspondence was in English).

Meanwhile, Zetcom, the company behind virtual operator Amigo (phone cards of the same name, use Latvian Mobile Telephone/LMT's network) announced a scheme to pay up to LVL 0.20 for downloads of user-generated content for mobile phones. This tops what Bite offers for its Foto Bazaar -- LVL 0.04. The Amigo platform is called Multivide.

Due to a copy-past from a Windows Word file, this could look a little strange...

What are the user statistics for Bite Plus, your mobile entertainment portal?

We have about 25 thousand unique users per month. Each of them opens up on average 59 pages per month.

What is the most frequently purchased service?

We have our own content and provided content. In total draugiem.lv and one.lv services (social networks for Latvian and Russian speakers, respectively) are absolute leaders. Concerning BITE content – games and polyphonic melodies are the most popular products, and they are 3 times more popular then true tone melodies.

Is it true that ringtones and games sales are not doing well (across the industry in Latvia/Baltics) because of piracy?

One.lv has largely left this kind of business and is using mobile for transactions and access related to its social network.

Popularity of games is growing significantly. Since the start of the year the usage of games has grown by more then 3 times. Certainly it is partly connected to BITE customers’ base growth, but people still like games on their phones.

What is the future trend -- mobile TV, mobile/online communities. a shift to user rather than commercially generated content?

Certainly there is a recent trend for user generated content. We have just recently introduced Foto Bazaar service – gallery with user’s generated pictures, where users can upload their pictures and share them publicly. New service is a unique possibility for TOXIC users which can even earn money 0.04 Ls for each picture downloaded by other Foto Bazaar user.

However we think commercial content will not disappear at all, it might become more localized. We also observe a new trend in the market - free content, which is supported by advertisement.

What will be the impact of eventual flat rate or near flat rate service?

BITE already offers flat rate services and we see that the customers like this approach. Flat rate allows to users have easier control on their expenses and they feel more secure when paying a certain fee monthly.

When most phones are HSDPA capable, will there be any boundaries between mobile entertainment and commercialized internet entertainment generally? That is, if I have paid a subscription (maybe by mobile banking) to "Sports TV" does it matter if I watch it over flat rate DSL on my PC, flat rate HSDPA on my laptop or the same HSDPA on my mobile (OK, maybe the system detects the device and adjusts the stream and/or download format to the screen).

We think that there is a big opportunity for services specially designed for mobile usage. Not just internet copy-paste services, but specially designed services for mobile phones. Certainly, mobile and internet integration will continue to grow, but in mobiles can gain more by providing unique mobile based services.

Baltcom's Pēteris tosses a little wrench into the works

Pēteris Šmidre, in his capacity as board chairman of Alīna, the holding company that owns the Baltcom electronic communications group (internet, cable/digital TV and fixed telecoms), has tossed a wrench into the works of plans for a management/staff buyout of Lattelecom.
Alīna has sent a letter to the Latvian government expressing interest in acquiring a piece of Lattelecom. One reason, according to the news agency LETA, is that Lattelecom should be held to its committment to provide services to unprofitable customers. Otherwise, there are few details as to what Alīna would do as an investor in Lattelecom. Certainly, it is doubtful that Šmidre could buy the whole company (at LVL 290 million if its 23 % share in Latvian Mobile Telephone/LMT is discounted, otherwise LVL 450 million) alone, and saying that you are buying a company that you intend to force into unprofitable businesses is not the best way to get co-investors.
But that is not the problem. Pēteris is pounding on an open door on this issue, since the Latvian regulatory authority has always insisted that Lattelecom, as a market dominant operator, has a duty to provide universal service. Currently a government working group is studying how to fund universal service provision and who should be eligible. Raimonds Bergmanis, the head of the Communications Department of the Ministry of Transport, is inclined to favor a system of open regional tenders for utilizing the fund, that is, allowing all service providers to bid for providing subsidized universal service. More likely than not, the fastest and cheapest solution will be wireless. So Lattelecom is unlikely to be deeply involved in any of this.
So why all this? One simple theory is the bad blood between Baltcom and Lattelecom. Šmidre has always maintained that Lattelecom did everything to delay competition on fixed line telephony by dragging out interconnect negotiations and asking for, to his mind, unreasonable fees after the fixed telecoms monopoly was lifted in 2003. Since then, Lattelecom has implemented what amounts to fixed-fee domestic telephony (but feels like unlimited free calling) as part of its Mājas komplekts (Home Package) of DSL internet and phone service (with IPTV tacked on recently).
As Šmidre sees it, Baltcom (now facing cut-throat competition on foreign calls, with Skype looming over everything) was screwed out of a couple of good years building up its fixed telephony business and is now paying back the villain, Lattelecom, by tossing a wrench into the works. The government may well have to treat the Alīna letter as a legitimate request to privatize, complicating any decision on the Lattelecom management/staff buy-out proposal.
On this issue, the Latvian government is officially sending TeliaSonera the proposal and will decide what to do based on the half-mother's response. But as far as I know, that is pretty much a done deal. Lattelecom CEO Nils Melngailis, in Stockholm for a conference a couple of weeks ago, strolled 300 meters to TeliaSonera headquarters where he got an informal, but definite nod of approval from the half-mother. Who else is going to get TeliaSonera out of a 49 % no-future holding in Lattelecom that also holds the whole Latvian company hostage to uncertainty?
The logic of much of this has not deterred my former employer, Dienas bizness, from publishing some bizarro interpretations of what is going on, but that is another story. My Latvian readers know what I am talking about.
I should be writing more on this blog, but my usual evening writing hours have been ruined by the Latvian premier of the TV series Jericho. No, there is not an episode every night. There are informal sources for the original US series, almost all of it, so I am watching several episodes a night :).

Government OKs Lattelecom management/staff buy-out

A Latvian government working group approved the proposed management/staff buyout of Lattelecom for a sum around LVL 290 million (USD 580 million). Since TeliaSonera, which owns 49 % of the Latvian fixed-line operator, has unofficially given the nod to the deal, it appears that Lattelecom management and staff can get serious with international banks that have expressed interest in financing the deal and move ahead to a due diligence.

More on this later.

Some things that should be done by Midsummer

The Latvian version of the Midsummer bachanalia, called Jāņi, is also a marker for when political and major economic activity take a break for the summer, just as in the Nordic countries. So I have made a list of things that should be cleared in the Latvian telecoms "space" up by June 23, just a few weeks off.

1) The government should declare its position on the proposal by Lattelecom for a management and staff buyout of the whole company. TeliaSonera, the half-mother, has already indicated it favors the idea. With the Swedish government proposing an immediate sale of 8 % of TeliaSonera, it would be good for potential buyers to know that the Swedish group was getting out of a potential stranded investment for a reasonable price.

2) I am hoping to hear something about faster wireless internet speeds from Triatel and/or the GSM operators. This is personal -- I want to set up something at my summer house in Carnikava that has a reasonable speed compared to my 10 Mbps Riga DSL connection. Maybe I can get an extra DSL over my fixed phone line? Triatel has hinted at an upgrade of at least some of its EV DO network from the present maximum speed of 1 Mps.
Bite's 3.6 Mbps HSDPA (or a similar speed from Latvian Mobile Telephone) would be interesting, too. My present operator, Tele2 (via LETA) has not announced that it is expanding HSDPA coverage outside Riga (as yet).
A Latvian blogger with the nickname onkulis complains that Triatel has set an unannounced limit of 5 gigabytes (GB) per month download, despite professing to offer "unlimited" internet. Technologically, it may be necessary to ration wireless bandwidth in the face of BitTorrent junkies, but this sould be made explicit. Sorry, Triatel, you can be the first among many operators in Europe to tell it like it is with the fine print (my son, in Sweden, hit a ceiling on a 10 Mps fixed broadband connection).

3) Finally, my pre-Jāņi wish list includes at least one decent (at extra cost, if you please) international film channel on Lattelecom's IPTV service. The Bollywood channel now on the list doesn't count and I have yet to see what the video-on-demand film offerings are like ( I had to return my Ruckus wireless test set up, which worked fine as far as the TV went, but presented problems with using the internet at the same time).

Management/staff offers LVL 290 million for Lattelecom

One of the pitfalls of speedblogging is errors. They stand corrected, including the headline.

Lattelecom's management and staff are offering TeliaSonera (the half-mother) and the government a total of LVL 290 million (around USD 580 million) for all of the fixed line operator, my one-time rival Baiba Rulle reports in Diena, the national daily.
The sum is around LVL 40 million above valuations for the company and apparently doesn't include the 23 % of Latvian Mobile Telephone (LMT) held by Lattelecom. A new legal entity will be formed to hold the Lattelecom participation on behalf of the management and staff with the whole deal financed by "international banks". Including the LMT holding, the amount paid for Lattelecom would be around LVL 450 million or USD 900 million, with around LVL 160 million to be recovered by selling 23 % of LMT to TeliaSonera.
To firm up the tentative committment to the buy-out by financial institutions, Lattelecom needs the government's go-ahead for the management/staff buyout. This would allow the financiers of the deal to do a complete due diligence on the company, Lattelecom CEO Nils Melngailis told this blogger recently.
The news comes shortly after Lattelecom top executives apparently got the go-ahead for the buy-out from TeliaSonera, who sees this as a way out of its endless halfmotherhood. A proposal to swap the 49 % Lattelecom holding plus cash for the remaining part of LMT has been on the table for nearly a year with no clear response by the Latvian government.
For Lattelecom, some deal, any deal is necessary to set a medium and long-term direction for the company. While Lattelecom has chafed somewhat having to deal with the half-mother, falling 100 % into state ownership is seen as the worst possible outcome.

Baltic (and other) Skypies can breath easy

Skype users in Latvia (where there are said to be very many) and the other Baltic countries can breath easy, because Skype doesn't see any intellectual property issues with its voice over IP (VOIP) technology. Skype spokesman Villu Arak (at Skype's Tallinn, Estonia skunkworks)said this in a very brief statement when asked about the implications of Verizon's legal actions against Vonage. He declined to comment on the specific case.
The Verizon- Vonage dispute has centered on a set of VOIP patents that allow internet connected users to call ordinary phone numbers. Some analysts have said that applied as broadly as in the court decision affecting Vonage, the patents claimed by Verizon could be violated by almost all VOIP services.
The decision by a US court to defer an injunction preventing Vonage from signing on new customers has probably saved Vonage from a quick demise, although the company has other issues (large churn).
With Skype apparently safe and a good chance that the lower court decision on the scope of the patents will be narrowed, the only people with anything to worry about are Balts living abroad who might have taken a Vonage number from Cleveland or New York while spending the summer at a second residence in Riga, Tallinn or Vilnius.

Draugiem.lv founder speaks in Stockholm

Lauris Liberts, the founder of draugiem.lv, the Latvian social networking site with more than 900 000 users (in a country of 2.2 million), spoke about his use of outsourcing at the Global Forum in Stockholm on April 20.

Rumors & Whispers at Global Forum

I have been in Stockholm at the Global Forum, a big business conference sponsored, among others, by Lattelecom. Naturally, there was opportunity to catch some rumors about what may be happening next.

1) It appears the half-mother (TeliaSonera) would be ready to go along with Lattelecom's staff and management buy-out proposal. This is rather logical, because it would bail the half-mother out of what is beginning to look like a stranded investment. So far, the Latvian government has made only one decision-- that it will not sell both Lattelecom and Latvian Moble Telephone (LMT) to TeliaSonera. It is willing to sell just LMT, but the government has made no decision in nearly a year about whether it will finalize a deal swapping its remaining holdings in LMT for TeliaSonera's 49 % stake in Lattelecom plus a cash payment. Independent appraisals have been made of both companies, it should be a matter of quick negotiation to seal the deal, but the Latvian government continues to waffle and waver.
The management buy-out proposal is a means of pressuring the government to do something, to make a decision soon, but at the same time, it is not a bluff. Lattelecom has its ducks...sorry, banks lined up and if the deal were to go through, TeliaSonera could cash out of an investment in which it would be bought out anyway by the Latvian government, only God only knows when.
As things look, Lattelecom top execs got the nod on their idea from the half-mother while here in Sweden.

2) Look for Lattelecom and the Latvian social networking website draugiem.lv to strike a businessm-to-business networking deal, something along the line of people in the same company or "fans"(customers) of a certain product forming subgroups in draugiem and companies setting up shops and internet sales points on draugiem. Lauris Liberts, the founder of draugiem.lv and Lattelecom officials talked openly of this idea. Liberts also said he expects draugiem.lv to pass 1 million users in the foreseeable future.

3) Finally, look for Lattelecom to launch an alternative, private sector e-signature that can be used on a mobile phone. Details are sketchy, but if the software gadget is cheaper to obtain and easier to use than the state and Latvian Postal Service sponsored official e-signature, then it could take off. Rumor has it that the number of e-signatures actually bought by private sector businesses and private citizens is perhaps a couple of thousand.

Also ran into some dumb-ass behavior characteristic of broomstick-up-the-ass stereotype robot Germans when a Swedish immigrant taxi driver refused to detour on a fixed price trip from Arlanda airport to some hotel downtown and let me off where I was staying in Kista, just off the main highway from the airport. Had to pay the fucker an extra SEK 50. Unbelievable. Just a few years ago, I was in the same situation, sharing a cab after missing the airport bus, and it was absolutely no problemo, the guy let me off along the way, I paid the other passangers my share and that was it.

Cisco's Piotr Pluta speaks about "The Human Network"

Cisco Baltics manager Piotr Pluta, recently at Cisco Expo 2007 in Riga, spoke to this blogger about Cisco's Human Network strategy, mobility and other issues.

Mark Emanuelson of Cisco talks about SMEs

Mark Emanuelson, who manages marketing strategy for Cisco Systems in Central and Eastern Europe, talks, among other things, about Cisco's strategy for small and medium-sized businesses in his area of responsibility,

Lattelecom launches IPTV

Lattelecom held a press conference on April 17 to announce its IPTV service. I got Gints Kiršteins, head of the Content Business Division of Lattelecom to talk about the new service.

Lattelecom looks to HD movies on demand

Lattelecom has yet to commercially launch the IPTV service about which I wrote a recent rant, but it is already looking beyond the first package of over-the-DSL link services to IP telephony, high-definition video on demand and surfing the internet on high-definition screens.
The real "killer app", although to a rather limited audience in Latvia at present, is the equivalent of an HD DVD player (for special programming and rental films). The company is already testing a second-generation decoder that can be connected to an HD capable TV.
By offering a "virtual" HD DVD player, Lattelecom offers a service where users do not have to choose sides in the ongoing HD DVD format wars. Regardless of whether the film is on HD DVD or Blu Ray, IPTV subscribers will be able to watch it.
The present new generation DSL modems to be installed with IPTV subscriptions have a port for IP phones. This means that Lattelecom may follow in the footsteps of Elion, the Estonian fixed-line operator, which has an IP telephony service with a globally portable number (in reality, an IP address for the phone) making it possible to call a user of the Elion service for local rates wherever in the world the phone is connected to the internet. A similar service by Lattelecom would make free or nearly free global voice possible.
The price of HD capable flat screens is falling in Latvia (as elsewhere), so as these are sold in increasing numbers, they can be used to surf the internet (both the current and the second-generation decoders can have keyboards attached). Presently, ordinary TV screen definition is considered inadequate for displaying many internet pages.

Political depravity and telco privatization in Latvia

Normally I would not write on this non-political blog about the outrageous, depraved state-capture corruption in Latvia suggested by a written agreement between a powerful oligarch and one (probably several) Latvian political parties. However, the alleged (?) contract published on delfi.lv and widely discussed in the media (it was first disclosed by TV talk show host and investigative journalist Jānis Domburs) contains a direct reference to Lattelecom. Under the contract, the political party agrees not to promote the privatization of Lattelecom. The contract was signed between the now jailed Ventspils mayor and oligarch Aivars Lembergs and his circle and, apparently, the Latvian Social Democratic Workers Party (!) in 1999, but it may well have been renegotiated with other parties with the same terms. By some accounts, the Social Democrats were paid LVL 70 000 for their cooperation, a fair sum eight years ago, but chump change today. Anyway, the existence of these kinds of secret contracts and back-door financial support could be one reason why the privatization of Lattelecom and Latvian Mobile Telephone has been running in place for all these years...
P.J. O'Rourke has already written a book called Parliament of Whores, and, anyway, I don't write about Latvia's parliament, the Saeima.

Mauku Saeima, anyone?

And from a market anarchist blog:

It's terribly unfair to compare government officials to whores. It slanders whores. What have whores ever done to deserve being compared with government officials?

IPTV -- so far, 90 % f**ked

When you beta test something, obviously there us a curve of testers ranging from those whose experience is excellent to those whose experience is a catastrophe. At this stage of the game, perhaps those who uncover a clusterfuck may well be of more value than those, for whom all goes as expected. In my case I believe whatever is wrong, in the sense of bizarrely fucked up is individual to my connection.

I have Lattelecom's test mode IPTV hooked up on their new DSL modem connected to a Ruckus wireless IPTV setup (too much trouble dragging Ethernet cables through my kitchen and across the hall, so Lattelecom lent me their test equipment). After trial and error and some help from Lattelecom, I got the Ruckus connection to work and the IPTV menus actually showed up on my screen. But then

so here is the GOOD FUCKING NEWS...

the only thing that worked was video on demand. I actually started watching one of the test films and it looked great, 16:9 image, just like playing a DVD and I could wind it back and forth, stop it just like a DVD or video. If this works and looks this good for everyone, it will be a killer app for Lattelecom's IPTV. You can forget buying even a cheapo LVL 25 DVD player made by yaks on some Chinese steppe. Excellent -- at least the one time I tried it and didn't watch the whole movie because it was late -- I only disconnect the normal WiFi and do these experiments when everyone else has gone to bed and no one wants to watch "regular" TV.

AND THE F**KED UP PART...

Check this video.



I shot this on my Nokia N-80, ghastly quality. The problem is most likely with my particular DSL connection. The multicast simply doesn't work. Kind Kristine of Lattelecom said to wait and the picture might pop up. It hasn't over the past 30 minutes, so it never will.

Nice try. Maybe it will get fixed, maybe not...
I certainly hope it works for most customers when this is commercially launched at the end of the month or whenever.
What upsets me most is that my DSL internet works only via a direct ethernet to my desktop computer. I plug the same m-f**king cable into a DLink DI-524 and even though I get onto thw WiFi network, I got no internet connection. The IP-non-TV runs nicely over the Ruckus gadgets. This is as f**ked up as it gets...

Siemens opens SAP training center in Riga

Siemens in cooperation with SAP has opened an SAP training center in Riga, Latvia covering the Baltic region. The purpose of the center is to provide SAP users with training courses in Latvian, English and Russian. Mika Tanner, head of training for SAP Nordics (the Baltic operation comes under Nordics) talked to this blogger about the new training center:

James Enck shuts it down and other matters

A blogger that I often read, James Enck in his EuroTelcoBlog, has announced that he is closing it down because of a major job change. James is leaving his post at Daiwa in London apparently to join a high powered Wall Street team (he doesn't say who). For one reason or another, blogging is not part of the game where he is going, though he doesn't exclude that he could reappear in the blogosphere. I enjoyed reading James from time to time and took note of his interest in FTTx solutions, probably the only way that fixed-line operators can stay significantly ahead in the bandwidth and speed categories. Best of luck to James at his new position.
I also shuffled through some statistics from the Latvian Telecommunications Association on market shares on the total voice (fixed and mobile) market. Tele2 is the biggest by a slight margin (in terms of users) with 32.4 % in 2006, followed by Latvian Mobile Telephone (LMT) at 31.8 % . Lattelecom had 21.1 %. The total market grew, however, by 14.6 % and the share of "other" voice providers grew to 14.7 % of the market from 4.7 % in 2005. Most of this growth is due to the appearance of Bite as a serious competitor during the year. In early 2007, they chalked up user 200 000, a person in the town of Jelgava who got 200 000 free minutes on the Bite network as a prize.
What is a bit confusing is that there is certainly some duplication of users -- most mobile users are also on the Lattelecom net, if not as voice callers from home, then as DSL subscribers (there are more than 100 000 of them). Also, fixed voice is folding into internet. Many of the 100 000 + DSL subscribers and those using other internet services are surely using Skype a lot. Skype says Latvia is one of the densest user locations relative to population.
In essence, except for charge by the minute mobile calling, the voice market is relatively meaningless as voice becomes a feature of flat-rate internet. In a few years, as reasonably priced flat-rate mobile internet spreads, voice (mobile Skype and the like) will also become a feature of this service. So soon, there will be little reason to talk about voice :).

Management/staff buyout proposed for Lattelecom

Lattelecom's management has proposed a management/staff buyout of the company as an alternative to the long, drawn out negotiations with the half-mother TeliaSonera on a resolution of the privatization of Latvian Mobile Telephone (LMT).
The plan was reported by Baiba Rulle, a most capable reporter at Diena, and confirmed by Lattelecom CEO Nils Melngailis, who declined to disclose any details, citing confidentiality until the government (which has not exactly been falling over itself to talk to TeliaSonera) examines and decides on the proposal.
With Lattelecom (minus the 23 % of LMT it holds) valued at at least 260 million lats, this is probably a bit more than the company's executives and staff can afford out of pocket. So in all likelihood, the proposal has lined up some kind of deal with either a bank, a banking consortium or private equity investor.
My guess is that some people in the government may see this as a "back door" for evil foreign (Western) financial interests trying to prevent them from running Lattelecom as a 100 % state-owned company that can be politically influenced to make commercially dubious investments or to simply operate as a Ministry of Telecommunications rather than an enterprise.
This is exactly what management is trying to head off -- the (as the Germans would say) Bock zum Gaertner (Billygoat as a gardner :) ? ) scenario of state ownership. At the same time, Lattelecom' s management sees the half-mother as a little slow on some important decisions and would, perhaps, not mind having TeliaSonera out of the picture.

Nozare.lv blog temporarily f**ked (update)

Since I have many readers of this blog in Latvia, I just want to note that my Latvian language blog on nozare.lv has been offline for a couple of hours due to some server crash or whatever. I hope it will be restored soon. Several other nozare.lv blogs are also affected in addition to my rants on telecommunications and IT.

UPDATE: After a rather long outage -- many hours. nozare.lv appears to be back online.

Interview with Johnny Svedberg, Tele2

Johnny Svedberg, Tele2's executive vice president in charge of the Baltics and Russia, talked to this blogger about the future of mobile telecoms generally as well as some of Tele2's plans for Latvia. In terms of customers, Tele2 is the largest operator on the market and Latvia is the only market where Tele2 is number one.

Lattelecom CEO speaks-- a videoblog

Lattelecom CEO Nils Melngailis talks about the telco, IT and BPO group's offering for foreign companies in nearby Scandinavia and Northern Europe.

Marion the librarian and Lattelecom's plan C

No, this is not the title of an Ed Wood movie along the lines of Plan 9 from Outer Space. It has to do with a credible scenario for how Lattelecom could move into mobile WiMax (thus mobile services on a new, very likely flat-fee quad-play package) over the next few years.
First-- let us recall the plans for getting into the mobile market once the connection to Latvian Mobile Telephone (LMT) is eventually broken. Plan A was to buy Bite, but Bite has been bought by others and the price was probably too high for Lattelecom. Plan B-- start a strongly branded and marketed Lattelecom Mobile as a virtual operator on the Bite network (everyone is welcome, the more the merrier...)
Plan C is to wait for mobile WiMax to ripen in 2008 and then go ahead and build out a WiMax network that eventually brings high speed wireless broadband and VOIP plus mobile VOIP to everywhere in Latvia that it is commercially practical. If positioned as a flat fee (though perhaps premium service) mobile WiMax with Skype or some other VOIP service would be the wireless equivalent of free calls on the Latvian network now offered as part of the Mājas komplekts (Home Package) deal.
But we are getting way ahead of events and forgetting about Marion the Librarian? Where does she come it? Lattelecom has just finished its WiMax tests and is evaluating the results. It looks like they will show the viability of the technology--after all, it works in other countries, why not here?
Also, Latvia will soon announce a tender for connecting all 800 libraries, many of them in rural villages, to high-speed broadband. If Lattelecom can win the tender with its test-proven WiMax, it will get at least partial government and European Union financing to unwire the libraries. Then, with many WiMax towers in place, it will have the bones and (some meat) of a national WiMax network, just as mobile WiMax starts to become viable.
So once Lattelecom unwires Marion the Librarian or Baiba bibliotekāre (for all you Latvian speakers) and give her the best of its megabits (do you read sexual innuendo in this? Why?) the next...conquest could be the new mobile communications market that WiMax will open up once the right handsets, antennas and base-stations are available (having built a tower for Marion/Baiba, Lattelecom will just add the new gadgets and software). And we are not too far from the handsets, since we now have multiradio gadgets coming on the market (like the Nokia N-95, talk about sexy), so adding WiMax should be no problemo.
If you ask me, by the time whoever is in the zoo called government in Latvia by late 20o8 finally decides what to do with LMT -- like closing the deal with Telenor Sonera (not a misspelling) or Deutsche Telia or Nordski Telefonski (if the Russians get a big piece of the pie when TeliaSonera is fully privatized and wheeled and dealed into something bigger than itself --OK, maybe Telenorski Telefon :))--when all this is over, Lattelecom just might be ready to go straight to Plan C. We shall ---"C"....

IPTV in Latvia -at long last?

It looks like Lattelecom will launch IPTV for ordinary TV viewers at long last. The company is holding meetings to finalize its pre-launch and launch activities on March 21. First, it will offer connections (modems and decoders) to a broader range of testers ( I have been asked :)), then the service will be made available to the public, probably just after Easter, that is, mid-April. It looks like the offering will be a do-it-yourself kit available, perhaps, at retail outlets or by mail/courier. Considering the disastrous state of the Latvian Postal Service (which has hopelessly clusterf**ked its new periodicals delivery systems, filling the data base with garbage addresses and running a desperate shortage of mail delivery staff at the same time), I would prefer picking up my FIUY* kit at a hypermarket or electronics store.
Lattelecom promises 40 channels of IPTV with the possibility of turning off the Russian soundtracks that have been added, by default to great channels like Discovery by other cable TV operators. I shall soon see and report...

*F**k it up yourself (what did you think? :) )

The World's Biggest Mobile Phone?

I have been in Sweden for a few days for various reasons, including researching a story for Kapitals, the magazine owned by my employer and some freelance work for IDG News. One of the companies I visited was InView, the maker of the IPPI device for receiving and projecting MMS messages (as well as SMS and e-mails) on ordinary TV screens. Mats Segerström, Managing Director of InView, tells why the IPPI can be consider the world's biggest mobile phone.



The IPPI was nominated for most innovative mobile device at the 3GSM World Congress in Barcelona. Red Herring bizarrely reported that the IPPI was a device for speaking SMS messages on TV sets.

Telenor reportedly interested in TeliaSonera

Norway's Telenor is in preliminary talks to acquire the Swedish government's shares in TeliaSonera, according to the Swedish daily Dagens Nyheter (DN). DN says preliminary contact has taken place between Telenor, the Norwegian state (which owns a bit over 53 % of Telenor) and the Swedish government, which recently filed a bill to approve the sale of TeliaSonera and five other state-owned companies.
DN also claims that Russian financier Mihail Friedman, who holds interests in several Russian and East European telcos through the Altimo holding company, is also interested in the deal. Friedman could be willing to swap his shares in these companies for a slice of a new Nordic-Baltic-Russian telco group. However, both the Norwegians and Swedes are said to be cautious about dealing with the Russian magnate. TeliaSonera, as I have often written, is the half-mother of Latvia's Lattelecom and LMT, and holds controlling interests in Estonia's Elion and LMT as well as Teo and Omintel in Lithuania.
This is just a quick take on it, may write some more later.

Baltcom Fiber doubles capacity to 5 Gbps

Baltcom Fiber, the unit of the Baltcom electronic services group that owns a subsea optical link from Latvia to Sweden, has doubled the capacity of the cable to 5 Gigabits per second (Gbps) from 2.5 Gbps hitherto.
The reason is is an increasd demand for capacity from internet service providers carrying a higher volume of multimedia traffic. Power utility Latvenergo, which is building out a couple of pilot fiber-to-the-home (FTTH) projects in Riga, is one of Baltcom Fiber's customers. They call it, amusingly, "Optics up to Your House" :).

VOOM!!! IZZI launches HDTV in Latvia

IZZI, the mult-electronic communication services company, has launched High Definition TV in Latvia, starting with a version of the US-based channel VOOM. Kaspars Spunde, Marketing Director of IZZI, explains in this video:



Some other interesting hints -- look for IZZI to take part in a fiber to the home pilot project as soon as they find a suitable partner. FTTH is the obvious way to deliver the many HDTV channels and eventual HD video on demand services that will arise in Europe and Latvia in the next few years. IZZI will also soon launch ordinary video on demand. They are also thinking of packaging their HDTV and digital cable offering with a discount on a flat screen TV.
The HD service will cost LVL 3 per month in addition to the basic digital TV service (LVL 4) and rental of the HD decoder(LVL 7, or buy the thing for LVL 240, in interest free installments of LVL 40, if you wish)

IZZI gets the jump on HDTV

IZZI, the multi-services provider (internet, cable TV, wireless internet and mobile) has indicated it will make an announcement about High Definition TV (HDTV) on March 1. This means that the (not by so much) underdog has gotten the jump on market leader Baltcom TV and Lattelecom, which has yet to launch its IPTV for ordinary TV receivers service.
Two questions come to mind. First, what technology will be used to deliver the HDTV signal and in what parts of the IZZI network. Second, what HDTV channels will be available? I may be wrong here, but there aren't too many HDTV channels in Europe. There is one that is more or less a demo channel showing fluffy animals (count the hairs on their fur) and tropical fish (check out the facets of their scales).
To deliver HDTV apparently requires quite a few megabits, possibly the maximum that IZZI can deliver over cable. Here, Baltcom with its optical network in parts of Riga is perhaps better positioned. We shall see what IZZI has to say on March 1 and wait for Baltcom's countermove. Maybe that will be to do nothing until there is substantially more than fuzzybears and fish to show. That would be a step away from quantity (100 + digital channels) in favor of packaged quality (an HDTV offering with a few good channels, not the Poodle Channel and 99 others).
Anyway, IPTV (HD or otherwise) is hot, witness the bidding war for Tandberg Television between Ericsson and Arris Group of the US.

Lattelecom profits surge 12.6 %

Lattelecom's profits rose 12.6 % to LVL 39 million in 2006 while revenues rose 7.7 % to LVL 143.7 million. The results are a good sign that the company is maintaining and increasing profitability, apparently by expanding into new, non-voice areas such as internet, information technology, business process outsourcing and media (IP TV to begin with). Revenues from internet services were up 30 % while revenues from new services, like outsourcing, IT and call centers, rose 84 %.
As this blog reported, starting probably in April, Lattelecom will offer triple play (DSL internet, voice and IPTV) as its basic services package. Voice calls within Latvia to other Lattelecom numbers will merely be a "free" feature included in the variable flat fee (depending on internet speed and number of IPTV channels).
This, however, is not the most radical change Lattelecom will undergo. Look for the company to become, for households, a media and home-management platform. This means that by 2010, the average middle class Latvian will get up and "awaken" an always-on high definition flat screen and request a color print of what was once called the morning newspaper. The person will then open a window to check any videovoicemails left by friends, and perhaps play a TV program missed the night before (if there is still any TV broadcasting on a fixed schedule). The user will open a screen to see whether a small child is still sleeping and under the covers, and also link to a remote camera at a summer house 60 km away, where a frail grandmother is living. The Lattelecom customer will then query his/her car on WiFi and see that it needs to tank up on biofuel, do a price check on the internet, and print a discount offer coupon (or send it to a mobile phone) to get a few santims off each liter. With his/her favorite London internet radio station playing in the background over the 100 Mbps internet connection, the Latvian of 2010 will finish morning coffee, switch the radio stream to a mobile device or the car's HSDPA link, and continue listening on the drive to the biofuel station and work.

Maarten van Engeland leaving Bite

Maarten van Engeland, CEO of the Lithuanian-Latvian Bite Group, has resigned his post at the mobile operator effective March 2. He cites personal reasons, which rings (and is) very true, since Bite, especially in Latvia, has been doing very well. (We all know that it is often better PR for all concerned to have the CEO of a sick company go on "personal reasons" rumored to be a sick aunt, but this is definitely not the case here). Bite, with 197 000 users in Latvia, including the customers of several virtual operators using the Bite network, is doing quite well for a third operator. It was among the first to launch HSDPA in Riga and several cities outside Riga (LMT beat them by a couple of weeks in terms of just turning on the service). Bite is credited with increasing competition in the Latvian mobile market and creating a base for a variety of boutique virtual services (such as 5 +, catering to middle-aged Russian-speakers). It is also presenting a broad offering on the mobile television and music side.
So, to Maarten, good luck as you step off a tight ship sailing on a steady course!
Maarten will be replaced by James Jackson, a man with a background in East European telecoms until a permanent CEO is found.

Russians interested in the half-mother?

Hopefully this has nothing to do with the earlier item about gangster threats :).
The Russian-language Latvian newspaperTelegraf reports that some kind of deal may be afoot between a Russian telecons-linked company and TeliaSonera. I don't read Russian, but I can give some quotes from the Babelfish version of the story :):):):

"In Lattelecom and LMT can arrive the Russians It is possible that Russian of "alphas-group" will fall into Latvia through Swedeņ."

"Recently into the Russian press filtered the information, from which it is possible to assume that this investor, probably, is the Russian company Altimo, which controls the telecommunication active memberships of alphas-group. Altimo - owner of the shareholdings in the number of the telecommunication companies, coowner of which is also Scandinavian TeliaSonera, and by it, in turn, belong to action in Lattelecom and LMT."'

"According to the information of one of them, the sides discuss the transaction, as a result of which Altimo would sell to Scandinavians entire or large part of its telecommunication active memberships in exchange for the portion in TeliaSonera, and it is already close to the agreement."

And so on, ending with the Russian investors indirectly owning interests in Lattelecom and LMT, although, the deflater line comes late in the Babelfished Russian story (it must sound more normal, though not as amusing, in the original Russian):

"In company Altimo their possible interest in any Latvian active memberships frankly they do not demonstrate."

Well, we shall see if these revelations are true. One more revelation -- looks like Babelfish hired Yoda when the Star Wars movies stopped :).

Triple play to be Lattelecom's basic service

A triple-play package of voice, internet and 25 IP TV channels will be Lattelecom's basic offering to all new private customers in the near future, according to Lattelecom's director of content business Gints Kirsteins (this is a short title, you see why I simply call these people honchos?).
Existing customers will be able to upgrade their ordinary phone or HomeDSL packages to the new service, which will involve installing new DSL modems and delivering an IPTV decoder for ordinary TV sets.
The service will have a video-on-demand option offering all films with original soundtracks and a choice of subtitles (plus local language soundtracks for children's films. This will be an extra-pay service, as will be subscription to an additional 18 channels of IPTV. The services will be identical to digital cable, with soundtrack options, etc.
The new triple-play option will be tentatively offered in April, pending final testing.
Also rumored is a softphone option for both business and home users that would link a Lattelecom number to an internet address and allow local calls (free for Home package users) to the user anywhere in the world, as well as low-cost or free calls to all Lattelecom numbers regardless of whether the customer is in Riga or Riyadh.

Various good things coming in April?

It looks like April will be the launch date for Lattelecom's IPTV service for viewers with ordinary TV sets (Lattelecom's TV offerings, both free and paid, can be currently beviewed on PCs) with decoders. It appears some 40 channels will be offered. April will also likely see an upgrade of more of the HomeDSL network to 10 Mbps (currently, the maximum speed of the Mājas komplekts/Home package is 5 Mbps and 10 Mbps broadband is available only in some areas of Riga). Lattelecom's IPTV service will be like digital cable TV, with soundtrack language choice and some kind of video-on-demand, including the option to record and view programs later using centralized servers.
The Lattelecom website in both Latvian and English contains a cryptic reference to "the autumn", which apparently was last autumn when the launch of IPTV was delayed. One reason: the HomeDSL offering with free national calling created such a rush of orders that there would have been no technical capacity for delivering and installing IPTV decoders.

Russian gangsters threaten the half-mother's honchos?

Swedish media are reporting that top managers of Lattelecom's half-mother TeliaSonera are being guarded by armed bodyguards because of unnamed threats to their lives. According to Swedish TV8, these threats may be coming from Russia.
It seems rather a bizarre scenario that Russian goons/hitmen would be sent to Sweden to harm TeliaSonera honchos, but the company does have interests in the Russian mobile market and has been up against Russian bidders for a mobile operator in Turkey. Still, it is far fetched that the Russian mafia would go after anyone other than, at worst, the local TeliaSonera affiliate management in Russia.
Perhaps the Russians don't know about the Swedish James Bond, Carl Hamilton, who would get sent after their sorry asses if they so much as harmed a hair on any Swedish executive's head.

ADDED FEB 16: Just want to credit reader Bleveland for tipping me off to this story. I had to find an English language version so that most readers could understand it.

Alcatel-Lucent honcho speaks

Baltic journalists were given a chance to interview Hubert de Pesqiudoux, the head of Alcatel-Lucent's Enteprise unit. Here is part of the interview as I recorded it (the entire 15 minutes would not fit on YouTube).



My 11-year old insists on being credited for the use of his video camera, a Sony HDD recorded (hard drive, not high-def, easy to use with a Mac despite what has been written)

Pat Russo of Alcatel Lucent speaks in Paris

This is an excerpt of a presentation by Alcatel Lucent CEO Patricia Russo at the Alcatel Lucent forum in Paris. No particular Latvian/Baltic interest, but shows where the IT/teleco market is going generally.



Added February 15: The start and end titles for this clip are in Latvian as it was originally posted to my Latvian blog at LETA (www.nozare.lv). This is the blog I get paid for :)

Pirates of Place de Maillot

Made it to Paris. Charles de Gaulle is a "fantastic" airport, a 1970s or 1980s hallucination of what the future, that is now (2007) was supposed to be like, with no one walking, everyone riding on people conveyors. Trouble is, the froggers actually built the thing (OK, no snide remark about the French meant, the US has Epcot Center) The monitors are there to say that one's baggage will be delivered at this Spaceport 2000 (vintage 1978) like 40 minutes after the plane lands.
Arrived at the Hotel Concorde de Lafayette, rode the elevator to my floor, which opened on a scene out of what upscale whorehouses look like in the movies -- winered wall-to-wall carpeting and mirrored wall panels. The room is nice, 25 + TV channels, many of them bizarre Arabic TV shops and Japanese channels with elderly people doing strange things and huge captions in Japanese characters, apparently so the elderly watching can read what is going on.
The cathouse hallways were a premonition of what this place charges for wireless internet. EUR 30 for 24 hours (people do sleep and attend events, so figure it out). Fortunately, the press center set up by Alcatel Lucent has free wireless. Considering that the newly merged company went several hundreds of millions into the bag in Q4 2006, I would not have been surprised had they charged for it :). This promises to be interesting, as everyone is probably waiting to hear how the company will get it together over the next few years. It is a supplier of switches to Lattelecom (wrote that earlier).
I am yet again glad that most Baltic hotels have free WiFi by default (or for the price of a cup of coffee if you walk into one of the Revals in Riga off the street). EUR 30 is more than I pay for a month of 5 Mbps Lattelecom DSL, FFS*!!!! (for f**k's sake, if you didn't guess)

Off to Paris and Alcatel Lucent

I am off to Paris for an Alcatel Lucent event. It will be interesting to see how things go for a company that is in pretty serious trouble -- major losses, higher job cuts planned. Alcatel was a major initial supplier of switches to Lattelecom, though I suspect they are leaning toward Ericsson for their network upgrade, not the least because Ericsson, I believe, supplies their DSL equipment.
Otherwise fairly quiet on the Latvian front. Must ask someone soon how things are going with the half-mother (TeliaSonera).
I am also considering trashing the new Firefox 2.0 on my Macbook (Intel Core 2 Duo) as it seems to work at 1980s dial-up speed. Writing this on Camino, which shows all of the blogger.com system's options like bold, italic, the link thingy, which all vanish on Safari.

Shoveling the grave of pay-per-minute mobile

Bite announced it will be possible to call Skype addresses from any Bite mobile phone by sending an SMS and getting the call connected (as a kind of call back). The connection will cost LVL 0.06 and the call LVL 0.40 for 10 minutes. However, once more mobile phones are WiFi or internet capable, and someone figures out how to put Skype on these (Symbian) phones, the era of no-charge calling on a fixed fee mobile broadband connection will start.

Its been a busy day, so I am letting Darius Montvila, a Bite deputy honcho, tell the story:

The Odyssey of Number Portability

In the Greek myths, people went on long strange trips, overcame weird obstacles, fought battles, etc. Changing mobile operators (or attempting to do so over the last almost three months) has been similar to this. It started when my old job, which paid a Latvian Mobile Telephone (LMT) subscription, gave me a power-of-attorney to take that account private so I could shift it and my number to Tele2, the preferred operator of my new employer. The old subscription would terminate on December 5. It indeed did so, making it impossible to do anything with my SIM card. So I got a temporary O-Karte from LMT to tide me over and gave the power-of-attorney to my new employer. The new company put someone who is well meaning but apparently not a whiz kid on this matter. Meanwhile, I used the O-Karte prepaid, but found that it was impossible to forward calls to my old number to the temporary one. Finally I was told that I had to go and get myself a temporary private LMT subscription with my old number. I did this just before going to the states so I would have a number I could use and be reached on.
I got back around January 21 and some days later went to the nearest Tele2 shop just under my new office. I also needed to get a new charger for my Nokia N 80, the kind with a smaller connector to the phone, so no one else's can be used. I saw a charger on a shelf, but when I asked one of the girls in the shop, she said they had no chargers. So I led her to the shelf and convinced her (to her pleasant surprise) that, yes, they did have chargers in a mobile phone and accessories shop. The lady did not seem like the brightest LED in the display, so it was no surprise when she said the data system wasn't working and the application to transfer couldn't be done.
My trip to Cannes intervened, and finally, Saturday, I went to the main Tele2 place in Riga, dutifully waited for my number to come up, and then got a very kind and helpful employee who filled out the forms, but, alas, got my e-mail address wrong. She did say that I should have gone to the corporate services unit, no numbers, no waiting, but for that I needed a power-of-attorney or some thing from the company, presumably from less-than-whiz kid. So now I actually have Tele2 SIM card that should come to life on February 15 or thereabouts, and I should then be able to go yet again to Tele2 with another document and have the account transferred to the company. Simply and fast, isn't it. All just to keep good old 292XXXXX...

Bite may announce Skype functionality

Bite has called a press conference for Tuesday, February 6 and it looks like they may announce a new Skype-linked function. In other words, Bite users will be able to make Skype calls to computers and phones (? not sure of this) by indirectly using a SkypeOut type of function. The feature will be apparently triggered by SMS (sending the Skype address) and then talking for something close to the SkypeOut rate for that country. So far, the geeks at Skype have yet to come up with Skype for Symbian, which they said they would have "soon" a year ago at 3GSM World in Barselona. We're still waiting. Maybe the pickpockets and thieving lowlife for which that city is notorious stole the code in progress?
Anyway, the great thing about this feature is that it drops the cost of calling home to a Skyper in Latvia and, perhaps, for calling from anywhere to a Skyper anywhere else. But we shall see...

Cisco going for " holopresence" next?

Cisco, which touted its relatively new Telepresence service (you sit across from ultra-high definition huge video screens, the others in Singapore look you in the eye, the sound moves around, etc., though I didn't see a demo) is working on some kind of holographic (or 3D, walkaround image)next generation Telepresence solution. This was disclosed in an offhand remark by a major honcho who I won't name because I am not sure it won't trigger some sort of SEC violation, whatever...
Anyway, Star-Trek style (but without the shimmery bad focus) communication is on its way, assuming you have a one-terabit dedicated connection and the right compression algorithms and a Godpower processor to deal with this. One of the most tantilizing things I heard down in Cannes, though not relevant to Latvian telecoms in particular.

Bljedniki
On the trip back I removed the volume limit settings on my iPod so I could drown out the conversation of the bljedniki just behind me on the plane. They were some young Russian-speaking folks who were merry with drink and punctuated whatever they said in Russian (which I don't understand) with the Russian word for whore - bljed. So I was (I am guessing the content -- Ī was bljed in some Warsaw bar bljed when some bljed Polish guy comes up and asks bljed about the Latvian hockey team bljed so we bljed had a beer together bljed--all this being sort of bellowed over the rather loud engines of the Embraer 175 that LOT operates between Warsaw and Riga).

Baltics Cisco Honcho Speaks

Down here in Cannes, I did a video interview with Piotr Pluta, the Cisco country manager for the Baltics:

Softphones coming to Latvia?

Lattelecom and at least one mobile operator are considering the introduction of softphone solutions. This means that when the "ordinary" landline or mobile phone rings, it would also ring a softphone on a PC or laptop. One advantage to this is that the local line would be portable across the internet, to practically anywhere in the world. Estonia's Elion has something like this already. It would also make the home landline phone portable to, say, a summer house or second residence with an internet connection. Rumor has it that Bite might be the first to introduce such a service.

Look out Latvian cable operators

Had dinner with a couple of mid-level honchos here in Cannes. The upshot of it is that cable operators in Latvia have to start preparing to switch platforms, at least for their premium customers, who will want, say, Baltkom TV and IZZI to deliver HD TV when it is available. Also, as the price of flat-screen, HD ready TVs drops (and credit to buy these, say LVL 750, toys is easy to get). there will be a ready market for anyone who can deliver, meaning -- Lattelekom (if they push ADSL2+ to the max or run fiber to the curb and gigabit Ethernet), Latvenergo (for their fiber to the home customers) and the satellite people (VIASAT, LVL 5 HD Digital Dishes in late 2007, anyone). IPTV is the only alternative, providing you can deliver reliable last-mile bandwidth, which you may not be able to do with several HD channels over MMDS or coaxial cable. So time to think of the near future. Did I say Cisco? Worth considering...
Not writing in my usual typestyle because Firefox access to Blogger is AFU (all f**ked up).

Hanging out at Freddy Chopin, Warsaw

Well, I have several hours to kill on my way to the Cisco Networkers event in Cannes. The flight they sponsored involves about six hours at Warsaw Fredrick Chopin Airport. Not such a bad place, though the seats are hard and I was very lucky to find a mooch outlet for my MacBook. As for wireless internet, perhaps I hit a winner after trying three different networks, all of which directed me to Polish-language sites that appeared to explain the pricing structure. PlusGSM was the only decipherable one, offering 900 minutes (much longer than I will be here, but there is a return leg) for 15 zloty or just over USD 5. The log in to Plus GSM was a bit of a mess and it rejected one of my two Visa cards, but at the end of the day (or the 15 minutes I spent fucking around with the network) it works find and it is not some astonishing USD 7.95 an hour or 10.95 for all day rip off that I recently saw in the US. Can't vouch for those figures, but it was pretty close. So I guess I got a good deal, unless the 9.00 PLN (that means Zloty) figure embedded in incomprehensible Polish texts in the other two (Orange and Era.pl) wireless network pages was what they charge for 900 minutes. Oh well, time crawls when you are waiting. I will watch some videos on my iPod, then recharge it. These chairs were installed by the Anti-Ass-bone League of Poland or something worse.

UPDATE: A group of around seven nicely dressed middle-aged Poles (?) arrived to the seating area around 1115 local and ate a packed lunch of sausage sandwiches, then broke out a small bottle of whiskey and a starting to have a merry time of it. Did I say the airport was boring?

Going to Networkers in Cannes

I will be spending a few days in Cannes at a Cisco event, Networkers, where I will be blogging for my Latvian-language blog on www.nozare.lv and will try to do some posts here as well. I will also be researching a magazine piece on the idea that we are entering the post-telecoms era. What I mean is that the time when telecoms was just talking on the phone or sending a fax or even leasing a data line, is gone. What we have now (in some places) and what we will have in much of the developed world in a few short years is a kind of powerful information resource "field" that one can tap into anywhere, anytime, with a variety of devices, some of which can summon powerful information processing resources (for business and research) or a wide variety of entertainment and other content. Underneath is what we used to call the telecoms network, but it has entirely new demands placed on it and has implemented new capabilities. This may be obvious to people in the business, but it is something that make for a nice "futuristic" piece for the magazine Kapitāls (Capital). If any readers will be in Cannes, feel free to leave a comment here or e-mail me at j_kaza@yahoo.com

The half-mother taken aback

I get the impression that TeliaSonera, the half-mother of Lattelecom, has been taken aback by the apparent failure of to get a resolution, any resolution, of its efforts to acquire 100 % in at least Latvian Mobile Telephone (LMT). Instead of pressing ahead with a deal, the Latvian government is m(or is there a better letter?)ucking around with variations, alternatives and hesitations that essentially take everything back to square 1.
I think the Swedes are wondering what to do now. They seemed to have come very far:
1) accepting the fact that the government would never let them have Lattelecom and being prepared to trade their 49 % of Lattelecom for the true prize, LMT.
2) making an appraisal of both companies.
3) getting ready to sit down and discuss:
a) how to reconcile two somewhat (but not insurmountably) different appraisal values
b) how to set a price
c) how and when to do the deal.

I think the half-mother has gotten used to Latvian weirdness when the government let lapse a LVL 9 million offer in 2004 to be paid by TeliaSonera to make a deal, any deal, by year end. It will soon be three years. But at some point, TeliaSonera may start wondering how far it is from having a huge stranded investment in at least one of its Latvian companies. What else can you consider it if nothing happens and the goal posts are uprooted just as one team approaches the goal?
Lattelecom, for its part, would probably not mourn the departure of the Swedes. well, not very deeply. They believe that TeliaSonera is sometimes slower to make decisions at a time when corporate strategy may have to be reviewed on a quarterly basis. At the same time, Lattelecom would probably prefer the Swedes as owners to being wholly owned by politicized domestic crazies, which, given the way things are run in Latvia, is a real possibility.
As I have already written, the new non-socialist government in Sweden is set on fully privatizing TeliaSonera and a number of other state holdings, so the half-mother should be looking over her shoulder as well as at developments in Latvia. Any number of huge beasts could be looking to eat up the cash-fat medium sized fish that TeliaSonera is, by global comparison.

Weird new schemes for divesting LMT, Lattelecom

TeliaSonera, aka the half-mother, can continue wringing her hands and pushing ahead any date when there will be some kind of final resolution of ownership of Lattelecom (the half-mother owns 49 %) and Latvian Mobile Telephone (LMT--where the half mother formally holds 49 %, but actually is a bigger mother through the 23 % that Lattelecom holds).
The excessively well informed Diena reporter Baiba Rulle writes that the government is considering an alternative scheme to current swap proposal (49 % of Lattelecom plus cash for the remainder of LMT) that has been under discussion since springm 2006.
The alternative scheme would involve breaking the so-called Umbrella Agreement of 1994 and requiring TeliaSonera to sell its 49 % holding in Lattelecom to a third party, preferably financial investors. At the same time, the Latvian government would be free to sell its 51 % of Lattelecom in a public share offering unfettered by the first-refusal rights of TeliaSonera under the Umbrella Agreement. That appears to be the point of annulling the much criticized document. However, as I understand it, the Latvian laws on corporations would require a first refusal right to TeliaSonera in any case.
Assuming the government gets its way, Lattelecom would be sold by both parties on the stock exchange, while the government would sell the rest of LMT to the ex-half mother, presumably, for cash. This might be a better solution for Lattelecom than having it owned by the Latvian government (whose core business should not be running a telecoms business) and it would bring a lot of cash into the state treasury.
However, the present scheme under discussion would also involve a cash payment in addition to a swap of Lattelecom holdings for the rest of LMT, and it would leave the Latvian government with the opportunity to sell 100 % of Lattelecom on the stock exchange if it chose to do so. Now the government seems to want to saddle TeliaSonera with selling its 49 % of what could be seen as an unattractive fixed-network-only operator. It is also rather presumptuous of the government to dictate what a foreign company may or may not do with its property -- in this case, 49 % of Lattelecom -- by urging it to sell to the holding to private financial investors.
One scenario that could arise, assuming the half-mother goes along with the scheme, is that it arranges to sell its holdings of Lattelecom to a future new owner of TeliaSonera, since the Swedish group itself is likely to be 100 % privatized in the near to medium term. In other words, TeliaSonera sells its 49 % of Lattelecom to say, Deutsche Telekom or Telefonica, who then buys into TeliaSonera and picks up the rest of Lattelecom on the stock exchange when the government sells its 51 %. At the end of the day, the 100 % private TeliaSonera and its new foreign parent control both Lattelecom and LMT, which is what TeliaSonera has wanted all along.

Bite in good hands, probably

Well, I am back in Riga, but not my luggage (delay in Amsterdam) nor a bag of Target purchases (left at my parents' house).
The news I missed (but anticipated) was the sale of the Bite Group for EUR 450 million to Mid Europa Partners, a private equity group. They are sufficiently transparent so that one can see they have experience in managing telecom assets. That's good news, also a signal that telecoms are of considerable interest to those who make money with their money (private equity) rather than put their money into just telecoms for one reason or another. In other words, the sector is looking bright again.
Not so bright, or non-existant are the chances that Lattelecom could acquire a mobile operator. It was in talks about Bite, but -- probably wisely-- decided not to try to outbid the private equity folks. That leaves Lattelecom with the alternative of joining the merry bunch of virtual operators (I see Telekomunikaciju Grupa -- TG-- has joined the party) mostly hosted on Bite's network.
Next interesting question -- what will happen to the (temporary?) half-mother of Lattelecom, TeliaSonera. The recent boardroom changes reported in the Swedish press are interpreted as foreboding changes in top management, perhaps ahead of a sale of most or all of the remaining state shares in TeliaSonera. The insatiable private equity funds will be out there waiting, I am sure.

Update:
Sweden's Dagens Nyheter calls the January 17 changes in TeliaSonera's boardroom "the most brutal in Swedish corporate history. Board members Carl Bennet, Eva Liljebom, Lennart Låftman, Lars-Erik Nilsson and Sven-Christer Nilsson were voted out and replaced on smaller board by Lars G Nordström, Conny Karlsson, Maija-Liisa Friman and Jan Risfelt. The move is seen by analysts as a purge of board members seen as close to the Social Democratic movement and, thereby, opposed to complete privatization of the company. A sell-off of TeliaSonera has been in the cards since the non-socialist government was formed in the fall of 2006.

In the US, little broadband access

I am in the US for 10 days, my dad turned 90 today (Friday) so I am mainly at my parents' home with no internet (was mooching some unreliable neighbor WiFi nets). Writing from my brother's house, fast Comcast link. Heading to Orlando, resort with free wireless, so hopefuly will be back online. Back in Latvia January 21

Lattelecom looks to plan B or Plan C on mobiles

I'll make this quick as I am up to my arse (the British spelling) in alligators at work because I am heading off to the US tommorrow and have to finish several things.
It looks pretty much like Lattelecom will have to implement plan B (a virtual mobile operator) or plan C (waiting for mobile WiMax). Denmark's TDC will be selling the Bite Group in the next couple of weeks, either to a private equity group or another, big telecom player. Lattelecom could afford to, but is unlikely to pay the close to EUR 500 million one is probably talking about.
Plan B is not so bad, Bite welcomes all comers. The only stumbling block (aside from what strange ideas the new owners of Bite, whoever they will be, may get) are Telia Sonera's objections to Lattelecom going into the mobile market anything less than a year after it will be traded back to 100 % government ownership.
This is silly, as TeliaSonera will then become 100 % owner of Latvian Mobile Telephone, which, in terms of revenues and profitability, is the MMFITV. This is from an sacriligious version of the 23rd Psalm-- Yea (this is not a cheering yea, it is a Biblical "yea") though I walk in the valley of the shadow of death, I shall fear no evil, for I am the Meanest Motherfucker in The Valley. " As the MMFITV of the Latvian mobile market, LMT doesn't need this shit, it can do fine against Bite/Lattelecom without TeliaSonera's help.
Oh, and by the way, the word is out that TeliaSonera is on the selling block as well with the same crowd of Telefonica, France Telecom, Deutsche Telekom and the private equity money gathering for the sale.

In Latvian--whatever soon means

This is a note to all my readers in Latvia, especially those whose mother tongue is Latvian. LETA will be launching my Latvian language blog on telecoms, IT & technology "soon" --whatever that means. The blog will probably be about a lot of the same stuff as here, perhaps more politely phrased, since it is a publication of a reputable news agency and not the personal rants of a journalist, a profession that has been called disreputable :). Nonetheless, in one of the many test posts I wrote while LETA was still f**king around with how the blog would look, I call the Latvian government "billy-goats" (āži), which loses something in the translation (just don't call anyone an āzis in Latvia, trust me... that's pronounced aah-zis. One exception to my suggestion--at your own risk-- the way many Latvians drive, you can give someone who cuts you off the finger and shout āzi! at him or kaza at a her -- whuch means goat and brings me to remember the non-diacritical spelling of my last name that appears in everything I write for foreign media :) ) .
Please, let me know if that link is working (open to the general public) yet. Whatever I have written here, I hope it doesn't cause any road rage fights...

The mailman might bring IPTV in Latvia

It doesn't sound credible with the Latvian Post Office in the middle of a huge clusterfuck regarding delivery of newspapers and periodicals , but Lattelecom's upcoming IPTV on regular television sets service may be delivered as a do-it-yourself kit. The kit will include a Motorola decoder and, probably, a new DSL modem with extra Ethernet ports for attaching the decoder plus software or some gadget to split the signal between ordinary broadband and the IPTV bitstream.
This should be on the market by the end of Q1 2007 and one option will be to have it delivered by mail, once the customer has signed a contract to either lease or buy the decoder and the service. Several thousand Lattelecom DSL connections were sold as do-it-yourself kits at supermarkets, and this was apparently a success. However, the decoder will, initially, be a high price-tag item that one is unlikely to put in a shopping cart (the DSL kit was around LVL 25) so it may be delivered by a mail babushka or more likely, a courier service like DHL.

A f**ked internet bank

One of the "dark secrets"of e-commerce is about labor practices. It employs a lot of free labor -- us, that is. Instead of going to a bricks and mortar shop ($$$ for the shopkeeper), and asking the salesperson(salary $$$ for the shopkeeper) for a look at some, say, Clarks shoes, we find a website selling shoes and find the brand ourselves and figure out the size and color and fill in the order and payment details and make the transaction. A better example is books, which I have bought lots of on amazon.com and amazon.co.uk. You do all the work yourself, assisted sometimes by a robot that knows one's preferences.
Most of the work we do online at all hours (I have ordered from amazon at 1 am) is very simple, which is why, for convenience sake, we are so easily tricked into working as sales assistants, order takers and bank clerks in the middle of the night (often leaving a "tip"of personal information so that we can be approached by marketers more precisely and effectively).
Having said that, I had the most unpleasant experience with the Baltic Trust Bank, a bank thrust upon me by my new employer (for years I have been with Hansabanka and intend to stay) for the purpose of transferring salaries. I duly opened an account and got an envelope for my internet bank, hoping, as soon as possible, to set up an automatic forwarding of my salary to Hansabanka.
There were no clear instructions for using the internet bank. I guessed that one used one's bank card pin code to access the ibank. Wrong. Fortunately, I stopped doing trial and error with this before automatically locking down the account. I had to call the bank to find out that my password was, in fact, a code printed on a code card (one of these things where, as double authentication, you enter "code 26" or something after your password clears). I was then offered to change my password. Each time, I had to re-enter the original gibberish of numbers and letters, because, it seems, the system insisted I use both one capital letter and one of a defined set of symbols *%( etc and a number, of at least eight characters all together. For some reason, the system did not recognize symbols entered fromt the ordinary QWERTY keyboard, but finally responded to a symbol from the numerical keypad on my desktop iMac (will it work from a MacBook laptop? We shall see...). So after some ten infuriating and frustrating attempts, cursing the lame-ass BTB every time, I seem to have gotten it right.
I can understand the need for security, but it goes a little far to make the customer do a lot of repetitive and frustrating work. At the same time, BTB gives potential hackers an interesting formula: at least eight characters, one capital letter, one numeral and one of a limited number of symbols. Let us assume that most people will chose passwords that at least make some phonetic if not actual sense, rather than utter gibberish like &gbBzjq9, but rather fucKbtb*7 (that is not my password, btw, but I did think of this wording at one point), is it not a tractable problem to break the password? I'm not a programmer or mathematician, but it seems doable. Now BTB and other banks will say that the combination of the password plus the hundreds of thousands or more code card combos TOGETHER are impossible to crack short of using your 2070 model zillion multiverse quantum laptop. And they are probably right. But in that case, why make changing the password such an onerous chore?
Recently, BTB was acquired by GE Money. Maybe it is time to make the iBank service less of a frustrating task?

More Baltcom (Fiber) buzz

A couple of years ago, a weird corporate contrivance called Foco-16 proposed building an undersea fiber optic cable from Gotland to Ventspils in Latvia with the general idea of making it the next to last link in a fiber optic network from Russia to the Nordic countries. The link from Gotland to the Swedish mainland was built by the Stockholm municipal fiber company STOKAB, which also was involved in the Gotland to Latvia link.
To make a long story short, Foco foco-ed everyone and left a Dutch company (part of the consortium, but specializing in laying and burying subsea cable) with unpaid bills and a dark fiber optic cable. In came Peteris Smidre, the owner of Baltcom TV, and bought the better part of the cable (50 %?). It has 56 optical pairs, roughly enough for the data transmission needs of God, if all pairs are used at full, multi-terabit capacity (possible with state-of the art equipment). Smidre has put the cable under a company called Baltcom Fiber, which has not exactly been selling huge capacity of late, certainly not at a great price. But since the deal was a firesale, Smidre considers it a good long-term investment. With prices for bandwidth stabilizing somewhere above absolute zero, there is hope for making money from fiber again. In the long run, Smidre and Baltcom Fiber are looking to provide managed data transmission services, implementing MPLS and routing datastreams from one IMS network to another and the like. Presently, interest in such services is lukewarm at best, but Smidre believes that content providers (broadband TV, eventually broadband HiDef TV and the like) will come around and let their carrier do the work of shaping their signal and keeping it near perfection. So, a couple of years down the road, look for Baltcom Fiber as a player on the transnational multimedia carrier market.