RIGA - Prime Minister Aigars Kalvitis said that he supported the sale of a third license on the mobile-phone market in order to boost competition, even if the sale would not raise revenues for the state, while the Transport Ministry on Dec. 7 said Denmark's TDC - owner of the Bite GSM operator in Lithuania - was interested in acquiring the license.
"I don't think the state will raise major gains by selling this license. The gains the state can win are lower telephone tariffs for users amid higher competition," said Kalvitis in an interview with Latvijas Radio on Dec. 3. "The gains are unlikely, but people will benefit from higher competition."
The prime minister said that he would personally assess regulations for the auction of the third mobile-communications license to see if there was a conflict of interests since the regulations were drafted based on an offer submitted by the international consortium IT&T.
The previous government, which decided on the auction and rules for conducting it after IT&T's proposal was received, set the initial auction price at 1.3 million lats (2.06 million euros).
On Dec. 2, the Latvian Telecommunications Association proposed to extend the deadline by a month and to withdraw the new operator requirements to invest 150 million euros in development of a new network. The association argued that license terms needed to be changed for the successful auction of the third GSM and UMTS mobile license.
Later, however, it was affirmed that the entity acquiring the license would not only have to invest 150 million euros in setting up a new network, but it would have to build the network in one year's time.
All of these regulations match IT&T's offer, which was the only one at this point.
However, LTA President Janis Lelis described the demand as ungrounded. "What if some company can do it cheaper," he asked, adding that the plan to build a mobile-communications network throughout Latvia in one year was unrealistic.
The GSM and UMTS licenses in Latvia are presently held by LMT and Tele2. The third operator, Triatel, has started working in the CDMA standard.
Two years ago Latvia held an auction for the third GSM license, offered together with a UMTS license, but no bidders materialized. Staging a new auction was only possible after a two-year moratorium expired.
