Lattelecom future in a muddle

First, sorry for the silence on this blog, I was in the US (Boston and Las Vegas, the IBM Information on Demand conference in the latter) and had little time to attend to this. With the uproar surrounding the Latvian government, it now looks like all options for the future ownership of Lattelecom will simply be put off and muddled away (how do you translate the wonderful Latvian expression nomuļļāts?).
As I wrote in my Latvian language blog, the current proposal for the MBO is threatened by ignorance, muddle(by the government, been at it since 2003 or so on these issues) and hounding (as close a translation of noriešana -- literally, to bark to death). At the moment, it looks like muddle will trump all other cards. However, the hounding has already started (several articles expressing suspicion, questioning the motives of the Blackstone Group, etc.).
One of the strongest critics has been Latvian MEP (member of the European Parliament)Inese Vaidere, allegedly representing right of center nationalist party, but proposing, instead of the MBO, a dirigist arrangement where Lattelecom remains majority owned by the state and is governed by a special law. Vaidere points out that the value of future dividends to the state is, in her opinion, higher than the LVL 300 million that will be paid for the company through the MBO. By this argument, some enterprises should be nationalized to provide revenues for the state instead of paying taxes. Classic socialism.
In a worst case scenario (though not "worst"for those who think a government that finds excuses for firing the head of the anti-corruption agency for minor violations should be dismissed along with the parliament backing it), the Saeima (Latvia's parliament) could be dissolved and new elections called following a referendum on the dissolution. This could drag well into 2008. At present, the government is in disarray, there is no Minister of Economics and even without the president dissolving parliament, the government may yet fall. Deciding the future of Lattelecom is the least of the government's worries.

So what will happen? The muddle will drag on to where the terms of the deal may have to be changed because of unstable financial markets globally and in Latvia (the inevitable crash of the real estate market must come soon). Then the possibly weakened or reshuffled (or caretaker) government will have to decide again. The clamor for a public auction of Lattelecom will increase, but such an event, I believe, will simply lead to it being purchased by TeliaSonera on the open market.

The MBO is not a bad idea, it has been tested with mixed, generally positive results in Europe and the USA, but don't hold your breath that it will go through in Latvia for Lattelecom.

A Swedish touch phone - iPhone challenger?

Sweden's NeoNode will be launching (in Sweden) its very small touch interface phone. I met them last week in Stockholm, but have only gotten around to editing and posting the videoblog today. Judge for yourselves whether we will have an iPhone challenger here:

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One more thing: If you are interested in any of the ads appearing here, please CLICK. I might make some money :)

XBox 360 Live -- A nightmare for parents and children

We bought an XBox360 for my 12-year old son' s birthday (in Sweden, Latvian prices were outrageous by comparison). We also picked up some games. The latest Halo 3 game (also bought in Sweden) came with a free 48 hour Xbox Live trial. The procedure for setting up an account in this service is one of the most time consuming, onerous, fucked-up experiences I have had with any online service -- and I go back to things like The Source in the 1980s. There are layer upon layer of data entry screens, all of which can only be operated by the Xbox360 controller, click and push  A, click and push A for endless repetitions. The code for a free trial of Xbox Live for 48 hours makes nuclear launch procedures child's play by comparison. Every possible piece of information, name, address, date of birth, credit card, gamer id, passwords, etc. has to be entered in this onerous way. Then the fucking service does not work for certain functions which should be available under the free test.

I think this is a classic example of downright customer, child and user-hostile design and policies by Microsoft. 

Sweden's Mondozer to launch widg... err...mondo platform

Mondozer, a 2007 Swedish startup, is going to launch its platform for creating easily accessible informational widgets (which it calls mondos) on  mobile phones (independent of the operator). Co-founder Karl Bohman talks about the company and its plans to offer the platform in the rest of the Nordic countries and, possibly, the Baltic countries.

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Tele2 Latvia negotiating a club music service

Tele2 in Latvia and Dub Tools, a Swedish mobile services developer, are negotiating to offer the club music platform R.FM in Latvia in the next few months. Dub Tools CEO Peo Strömberg talks about the new service below (note: the video was edited for my Latvian blog, so there are Latvian opening and closing titles and the "Latvian spelling" of Strömberg's name, plus some small errors).

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An informal iPhone demo in Stockholm

I finally got to film an informal iPhone demo in Sweden, thanks to the manager of a Macoteket Apple dealership in Stockholm. Here it is...

A few days in Sweden

I am heading to Stockholm for a mixture of business and personal reasons and will use the visit to see some mobile services companies at the Kista Mobile Showcase. There are times when this blog simply follows me around (New York, San Francisco) but I believe Sweden really falls under the outer corona (no nothing has been smoked :) ) of the coverage of this blog, because TeliaSonera and Tele2 are big players here, Nokia got named Latvia's favorite brand, and soon to be willingly orphaned (of its half mothers) Lattelecom sees Sweden as one of its markets.
An interesting observation -- only women can do a mash-up (literally) of Latvia's three favorite brands -- Nokia, Laima confectionaries, and Hansabanka (Swedish-owned). How? Toss a Nokia phone, a Hansabank credit card and a half-eaten Laima chocolate bar into a ladies handbag and they will all mix and stick together :).

More on the Lattelecom shopping list

I have already written about Pionit, the German-Latvian specialized IT company that I strongly suspect is at the top of Lattelecom's post-MBO shopping list. I just want to add some other educated guesses, mostly taken from a post on my Latvian-language blog.

Triatel, I think I have mentioned earlier. Their wireless EV DO based broadband service is what could be of interest to Lattelecom if the price is set right. Lattelecom needs some weapons in a coming war against both Latvian Mobile Telephone (LMT) and Bite, who will surely move aggressively with higher speed HSDPA as a direct competitor to DSL and the only alternative where the optical/copper infrastructure doesn't reach. Bite has already announced it will boost its HSDPA to 7.2 Mbps and by next year, it will be pushing the envelope of the technology at 14.4 Mbps. LMT is a large boat that turns slowly, but expect them to announce a speed boost as well. Triatel is looking to be bought and Lattelecom has been working with them on "digitizing"the rural network using fixed wireless CDMA phones.

IZZI, the cable TV, internet and mobile services (an MVNO running on the Bite network) company, might be of interest for expanding Lattelecom's cable TV base, although they do not directly use IPTV technology to the home (they use it for backbone transmission of their signals, I think). It would be a way of getting over 100 000 TV customers and slowly switching them to Lattelecom's IPTV. IZZI resells Triatel's wireless internet and provides fixed line cable internet where its network is present. IZZI was owned by TeliaSonera (and known as Telia MultiCom) before being sold to private Latvian investors some years ago. Its name is derived from how East Europeans pronounce the word easy :), suggesting that IZZI is easy to use :).

More along the lines of a cooperation partnership, Lattelecom could also look at the wireless broadband network builder Unistars. It has a strictly business customer base and builds some application-specific networks, for retailers and construction projects. That is, these wireless networks are used primarily for running retailing applications (point of sale networks, retail accounting and inventory control applications, etc.) This is the sort of thing Lattelecom is moving into -- setting up IT solutions that run on mission-critical telecom networks. For some customers, the right solution for Lattelecom might just be to call in Unistars as a partner, in others (farmstead internet, small-town business internet access), Triatel may have the solution. Unistars also has some WiMax know-how and is closely watching the mobile WiMax market. Lattelecom CEO Nils Melngailis and Unistars honcho Aleksander Rutman should talk, if they already haven't.

Lattelecom eyeing Pionit, a stealth IT company?

Lattelecom, in the midst of an MBO, is already looking beyond that for forging closer ties with selected IT companies. The most interesting of these may be Pionit AG  in Germany, where one of the chief "assets" is Mikus Grasmanis, a Latvian software engineer and one of the key inventors of GRADE, a business process analysis toolkit developed initially by the Institute of Mathematics and Informatics at the University of Latvia in the early 1990s. Also behind Pionit is Janis Gobins, the "godfather"  of the modern Latvian IT industry (Software House Riga, which later morphed and merger into Dati and Exigen/merged with Dati/).

Pionit was founded in 2006 and is still kind of a stealth company, but apparently looking to do sophisticated projects in business process management and the "industrialization" of software development projects. Pionit is the foothold in Germany that Lattelecom's new business directions in outsourcing and IT solutions need and have been looking for.  Valdis Lokenbahs,  formerly a major honcho at Dati, also recently joined Lattelecom. One reason he was recruited may have been his experience setting up a Dati operation in Germany and his ideas about building what he called a global software factory (assembling resources in a number of countries to optimally produce a software solution).

I predict that, by the end of 2008, Pionit (which already advertises its cooperation with Lattelecom) may become one of the first acquisitions of  the newly privatized Lattelecom.  Indeed, Nils Melngailis, Lattelecom CEO, strongly hinted that Lattelecom will grow in the future by major acquisitions, even of companies of similar size as Lattelecom at present. He was speaking at an annual conference for Lattelecom business customers and partners on September 19.

Bite doubles HSDPA speed in Latvia

Bite Latvija, the Latvian unit of the mobile services operator Bite Group, will soon boost the speed of its HSDPA mobile broadband service to 7.2 Mbps from the current 3.6 Mbps (both maximum speeds under optimal conditions). Next year, Bite will most likely jump the speed of its HSDPA service to 14.4 Mbps. At these speeds, the service will be a competitor to Lattelecom's DSL services, which have a maximum speed of 10 Mbps (in the HomeDSL plus IPTV package, with TV eating up some of the bandwidth when in use). Lattelecom has installed ADSL2+ DSLAMs that can deliver 24 Mbps under ideal conditions, but my sources say this is being saved for when Lattelecom launches some kind of HD TV service (probably video on demand).
My talk with Fred Hrenchuk, the recently appointed CEO of Bite Latvija is here:

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TeliaSonera on fixed-mobile convergence

There was supposed to be an article in Kapitāls, the Latvian language monthly business magazine that I write for about fixed-mobile convergence. I was off in the US for the Hewlett-Packard event, but I did research ahead of that and was reluctantly ready to write the piece when I got back (there was a lot else to do). OOPS! Seems the editors forgot about it, so the best I did was to have a small sidebar with one one my regular columns.
One of the things I did do in researching the unwritten longer piece was to send questions to TeliaSonera, since one of the points was that now that Lattelecom was doing an MBO, its most likely full-spectrum competitor would be Latvian Mobile Telephone (LMT), which, when all the privatization deals are finished, will be 100 % owned by the Swedish telecommunications group. Helped by Niklas Henricson, the secretly :) half-Latvian member of the TeliaSonera press team, I did a kind of e-mail interview, which was answered by Anna Augustson, the head of communications for TeliaSonera's Business Area Mobility Services. Here is the e-mail "interview" in full, edited just to remove some explanatory links that Anna added:

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TeliaSonera seems to have internally adopted extensive fixed wireless convergence with many /all of your employees carrying mobile phones that ring when their fixed line is called (via an inhouse wireless?) and apparently switch to the GSM/UMTS network outside the offices. Is this now the emerging/preferred solution for business in Sweden? ) If I were to arrive with a staff of 100 and take two floors in building in Stockholm, could I run a business with, say, one very fast internet connection (maybe gigabit speed), picocells, WiFi (for the PC network) and slightly modified mobiles for all staff (flat rate, untariffed calls among colleagues, GSM/UMTS at corporate rates outside the office, or maybe VOIP over HSDPA)?? Field staff would have HSPA laptops, etc.

The migration from traditional fixed telephony to mobile and Internet-based services in business and for residential customers is one of the clearest trends in telecommunications right now. Basic services like voice telephony will no doubt increasingly be replace by wireless access, regardless if it is an office environment or out in the streets, in the home etc. And to a large extent, we will see data go the same way as voice and be provided with wireless access.

On 28 September, and as the first mobile operator in Sweden, TeliaSonera is introducing a new solution for telephony combining features of fixed and mobile telephony, based on UMA (Unlicensed Mobile Access). With Telia Home Free, the mobile phone is being integrated in residential telephony, making mobile communications easier and cheaper. The telephone functions as an ordinary wired phone in the home (through WLAN) and subscribers can keep their current fixed line number. When a person leaves home, an ongoing call is switched automatically to the mobile network. Customers can call at a lower rate at home and also use their phone as an ordinary mobile handset when they leave home. Calls to all fixed line numbers and Telia mobiles in Sweden cost SEK 0/minute when made from home. Calls to all Telia mobiles in Sweden, including the household’s IP mobiles, cost SEK 0/minute with the Telia Mobile to Friends subscription. Calls answered on the fixed line number, outside the home, cost SEK 0/minute. The very same service was launched by Telia in Denmark last year, and will be launched by the fully TeliaSonera owned Netcom in Norway in the autumn.

It should be noted that the solution TeliaSonera has adopted internally (as referred to in the question) is using the same network inside and outside the office (GSM/UMT), combined with a local radio solution to handle large number of simultaneous calls and to ensure sufficient coverage.

However, for data, we offer the Connect Pro service which switches between networks depending on availability and location. Connect Pro customers can access the Internet and their organisation’s intranet either through GSM, UMTS or WLAN (TeliaSonera’s WLAN service is called Home Run).

In Norway and Denmark we have launched a service for our business customers called the Wireless Office. It’s a solution based on mobile telephony replacing the fixed phone; subscribers have one mobile phone and one number with untariffed calls to colleagues and reduced tariffs for other calls. The Wireless Office will be introduced in Sweden shortly.

So to conclude: Yes – you could run a business the way as it is described in the question, with a fast internet connection, WiFi for the PC-network and a telephony solution based on the Wireless office. However, as of today, we do not offer VoIP over HSDPA.

Having such an offer in Sweden, how likely is it to be implemented in your Baltic subsidiaries, especially Latvia, where you will no longer have a fixed network operator when Lattelecom is sold off to management and employees?

First of all, it should be noted that negotiations regarding our ownership in Lattelecom and LMT are on-going and any comments in this respect would - before an agreement is reached - therefore be purely speculative.

However, on a more general note, it can be said that having full ownership means that we can fully draw on the advantages of the TeliaSonera Group thereby strengthen our position as well as our offerings in a market in terms of synergies, purchasing power, faster access to new services, faster development of mobile data, and overall better prices on a lot of services needed for mobile operators. It also means that new services, like the service you describe and services like Telia Home Free and Telia Wireless Office, can be rolled-out in the market.

It should be noted, though, that we do roll-out HomeFree also in our markets where we have a large market share in fixed communications (e.g. Sweden), since we truly believe in the fixed-mobile migration and we want to take lead in this migration. To roll out a product like HomeFree will always be a specific decision for every market to make, based on local circumstances.

How will wireless vs fixed "footprint overlap"develop over the next few years -- by which I mean, the basic DSL offering in Latvia is 2Mbps, while HSDPA can get you 3.6 Mbps all things being optimal. This covers most ordinary surfing needs and even videostreaming. You can also get 10 Mbps DSL (in Latvia) with a IPTV package, but apparently that can be matched by an HSDPA upgrade (the technology goes up to 14.4 Mbps). In Sweden, some places (Kista) have 100 Mbps internet, but it is said wireless could also hit those speeds (WIMAX on steroids??) So this is how the "footprints" overlap, except you can take mobile or nomadic solutions anywhere within coverage, but even fiber to the home stops at the door if you go out.

Speed is a constantly moving target: Today we can enjoy access speeds which we could not foresee a couple of years ago. But both wireless and wireline/fixed access speeds are developing simultaneously and we do have a decent gap between the two access technologies.

Wireline will increasingly be focussed on providing the backbone infrastructure, access to radio points and also the really heavy connections to e.g. offices. As there’s a limit to what we can do in the wireless world there will always be a need for wireline/fixed access.

In general, the basic communications needs will be based on wireless access complement with wireline/fixed access when needed.

What is the degree of adoption of totally wireless solutions in Sweden (among small/medium businesses) as described in the first question? Any future trend predictions?

In the business segment (SMEs), and according to our own research, we estimate that 2% of the companies have a netbased mobile switch (i.e. a general mobile switch, and not a solution that switch between networks depending on the users location (in the office, outside the office etc).

Since you still own and run a fixed network, what will be its function in an increasingly wireless environment? Will it merely be a "backbone to the home/office" and carry. say, HD TV on demand, telepresence, other services beyond the bandwidth of wireless?

As stated above, wireline will increasingly be focussed on providing the backbone infrastructure, access to radio points and also the really heavy connections to e.g. offices.

In general, we see that the basic communications needs will be based on wireless access complemented with wireline when needed. Basic services like voice telephony will no doubt be replace by wireless access regardless if it is an office environment or out in the streets etc. And to a large extent, we will see data go the same way as voice and be provided with wireless access. We already have clear examples of this development today with wireless hot spots in cafés, restaurants, hotels etc. and the development of HSDPA in the public environment. But of course, behind all those customer accesses there is cable.

Nils Melngailis (Lattelecom) on financing the MBO

Lattelecom CEO Nils Melngailis describes the financing that has been arranged hitherto for the management/staff buyout. The US based Blackstone Group (private equity) will provide LVL 90 million in equity financing (taking 51 % of Lattelecom) with a four bank consortium (Unicredit, Nordea, DnB and Parex) providing LVL 200 million as a loan (maturity -- around 7 years). Disbursement of a first packet of shares will start in Q1 2008 if all goes smoothly. More in this video:

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FinnFUCKINGair (baggage losers)

I flew back to Riga with Finnair (ok, I was rerouted when my flight to New York JFK was delayed, I went Boston-London-Helsinki-Riga with Boston-London on American Airlines). The fuckers lost my baggage. Maybe this is par for the course with airlines these days -- the more IT systems, the more clueless about WTF anything is -- at the airport, they did not see my bag on their system). Fortunately, I packed all my personal electronics in my backpack, but packed all but one of my books (from Amazon, free delivery to a US address), plus DVDs , etc, clothing, in my roller bag, which I checked. This is what has now vanished. It used to be bags were delayed, but traceable.
I strongly recommend against flying with either of these bozos, except I guess everyone is bozos these days, US air travel being a default clusterfuck, so I suppose one simply has to travel light and carry on anything of value. Fortunately, I also wore my brand new Clark's shoes to break them in.

HP video, upcoming Lattelecom news

Here is some video on Hewlett-Packard's new line of workstations presented at the Your Life is the Show event in New York last week (September 5):

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On Lattelecom
Later today we will have some preliminary news on the financial consortium financing the management buy-out. Am a little tired after a long trip back to Latvia from the US, (lost baggage, etc) but will try to get some video up on this (in English).

More on HP and digital entertainment, Post no. 500!

Well, post number 500 is a videoblog where Brian Burch of Hewlett-Packard talks about the digital entertainment products the company will be offering. This reflects the evolution of the blog from text to multimedia and its oocasional global reach. This was filmed covering the HP event Your Life is the Show in New York for my Latvian employer. Here is the video via YouTube. The blogger video function doesn't seem to work and apparently sucks...

Todd Bradley of HP speaks about "consumer electronics"

I was at the Hewlett Packard Your Life is The Show event in New York (which is why I am not in Latvia) and recorded this video of Todd Bradley of the HP Personal Systems Group saying the company was not getting into consumer electronics, despite selling TVs and the upcoming Media Smart Server.

Here is the video. Blogger's video upload did not work on several attempts. It sucks.

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Disappointing Apple :(

I tried to get permission to shoot a videoblog of an iPhone demo at the Apple Store in Chestnut Hill, Newton, MA, but it seems there is a nationwide policy against cameras in the stores. So there is no way we semi-pro videobloggers can show off the styuff we like. I was hoping to show this on my Latvian-language blog and to give something to TV24, the cable/internet TV operation that I work for. I even e-mailed Apple in Cupertino, their PR folks, but nothing. Thanks anyway to the nice guys at Chestnut Hill for pestering their manager until they got an answer.

Like college registration in the 1960s :)

Well, I have arrived in the Big Apple for Hewlett Packard's Your Life is The Show event and the funniest thing is that registering as a journalist in 2007 was like registering for college in the 1960s. You gave your name and some ladies went through some paper checklists and rummaged through piles of pre-printed name cards. Didn't find mind. Went for a couple of drinks and snacks and then got it :). One would think that the world's leading IT company would simply look all guests up on a laptop linked to a database and then print the name card on demand on one of its snazzy laser printers. I am sure the event will be better than this rather amusing start.
Wasted after 8 hours on the plane from Helsinki, but will try to stay up and sleep normally

Lattelecom & wireless broadband, HP in NYC

Once the management/staff buyout (MBO) is complete, one of Lattelecom's priorities will be to expand its broadband coverage. CEO Nils Melngailis has said as much. More than 100,000 of Lattelecom's more than 600 000 wireline customers already have DSL, and the aim is clearly to get almost everyone aboard. That includes customers beyond the reach of the present network in rural towns and outlying areas.
Another priority is to move into mobile services. In this regard, I have mentioned a number of options, with the most likely one being a virtual operator (MVNO) on the Bite network, where all paying customers are welcome. Another option would be to experiment with mobile WIMAX (something not likely to be viable until the middle of 2008). I have also mentioned that Lattelecom could forge closer ties, perhaps even buy Triatel, which runs a non-standard (for Europe) CDMA mobile phone and data network, plus an EV DO wireless broadband network (satisfactory at my country cottage 35 km outside Riga). Triatel is already cooperating with Lattelecom for installing fixed wireless telephony and landed an EU and government-financed rural broadband project.
After a bit of chatting with sources, it looks like the best fit between Lattelecom and Triatel could be in the wireless broadband space, or so some think. Triatel appears ready to be persuaded into some kind of broader, more permanent deal. The question is, how much infrastructure overlap there may be and is this not at odds with the rather strange rural wireless broadband project backed by the government? The basic idea of that project, rather than helping spread "last mile" solutions (which Triatel is) was to establish parallel wholesale infrastructure and hope that resellers would appear in the poor rural areas and have a choice of wholesalers whose internet connection they could then distribute to the rural farmsteads, huts and hovels in the forest.
Meanwhile, earlier this summer, Lattelecom announced it was buying a bunch of Alcatel point to point high capacity microwave links in order to extend its broadband reach beyond the optical and wire network. That sounds like extending infrastructure to me. Still, the last mile could be set up and sold by Triatel, especially if it was part of the Lattelecom fold. Watch these developments...:)

HP in New York

I'm off to New York on September 4 for some kind of Hewlett-Packard (HP) all day event on September 5. Piecing together some sparse e-mails from the local organizers, it will be a series of break out events on various gadgets and issues. There has not exactly been a flood of information as to what, when (and just some bios of who), but it will held at some posh hotel (the Ritz) on the Battery, far from the delights of the rest of Manhattan. Or so the month old e-mails claim. But hey, I already have my electronic ticket (in French) from HP, so thanks!
Many of the discernable events are of interest, and, hopefully, I will be able to blog and videoblog from there, both here and for my Latvian employer. I notice blogger has added a "add video"function, which means I may be able to bypass the sometime slow(to post uploads) and (therefore) dubious YouTube and the quicker alternative, blip.tv. Anyway, I will give it a test. After that, I will be off to Boston to see family and back in Latvia on September 11

Soft launch for Baltkom's mobile service

Baltkom, the cable TV and telephony company that launched, developed and sold the Latvian mobile operator now known as Tele2, will re-enter the mobile market with a soft launch of its virtual services on the Bite network during the fall.
Tariffs on the new service will closely match those offered by Bite and will include mobile internet (HSDPA), which the Bite network offers in Riga and several other Latvian cities.
The new service, which will be part of a Quattro package (cable TV, cable internet, fixed and mobile telephone) or sold seperately, will start without any fanfare, probably as an offer to existing Baltkom customers (there are more the 170 000 cable TV subscribers). Once the services are accepted and proven to work for existing customers, a wider marketing campaign and announcement will be made.
This, according to my source.