RIGA - After months of silence, TeliaSonera finally responded to myriad forms of criticism from the ruling coalition by saying it was prepared to increase interest in its two core assets 's Lattelekom and Latvijas Mobilais Telefons 's when the state saw fit to sell its stakes in the two companies.
Speaking to reporters on Sept. 20, Kenneth Karlberg, company president for Denmark, Norway and the Baltic states, said TeliaSonera would stick to its strategic goal of acquiring controlling stakes in both fixed-line operator Lattelekom and mobile-phone leader LMT.
TeliaSonera owns 49 percent in Lattelekom through a local subsidiary and the same amount in LMT, compared with the state's 51 percent in Lattelekom. But the government, led by Prime Minister Indulis Emsis, has repeatedly said it would not sell its stake in strategic enterprises. Instead, it would focus on increasing the effectiveness of these enterprises in order to boost coffers with dividend income.
In addition, Emsis has publicly stated his doubts on a settlement reached by TeliaSonera and the previous government of Einars Repse just before the latter left his post in March. The settlement effectively canceled all outstanding multimillion euro lawsuits between the investor and the state and provided for the possibility that Latvia may sell its stakes in the two companies to TeliaSonera.
Karlberg said he hoped that Latvia would change its stance and sell its stakes in the two companies, adding that TeliaSonera had not established any deadline as to when it would give up hope and stop waiting.
Karlberg reiterated that TeliaSonera's offer to buy the state-owned shares in fixed-line operator Lattelekom and LMT, which Repse had given theoretical consent to in the March agreement, is good both for the country and the two companies.
Regarding dividend payments, the regional president said that though they were high now, they were likely to fall in the future given the size of Latvia's market and the likelihood of increased competition that would squeeze margins. What's more, the company cannot invest in development the way it would like to if one shareholder is predominantly interested in receiving dividend income.
Karlberg said that the company was not holding any negotiations with the government.
"We're here only for business purposes 's but not for politics," he said. "It's important to stress that it's not only for the company, but also for our small countries and their consumers, to have one Baltic network."
In terms of strategic development, he said, "By sharing the development cost we can offer lower costs and new modern services 's and that way increase the number of our customers. If the company can't provide the money for that, then there is a risk that this company could be left behind."
Last year Lattelekom posted profits of 27.2 million lats (40.5 million euros), up 25 percent from 2002, on sales of 140 million lats. LMT's earnings amounted to 42.3 million lats, up 22 percent year-on-year.
