RIGA - The application deadline for a third UMTS and GSM mobile telecommunications license currently on tender could be extended if only one bidder materializes, Prime Minister Aigars Kalvitis said last week.
"If there is no auction - no more bidders sign up - we could extend the deadline," said Kalvitis.
The tender with a Dec. 21 deadline was announced in late November, giving investors little time to assess the 150 million euro-plus deal. Still, several companies have expressed interest, including International Telecommunica-tions and Technologies, Latvia's Baltkom and Denmark's TDC. Last week Lithuania's Bite GSM, which is also owned by TDC, said it was interested in acquiring the license.
Jesper Thell Eriksen, board chairman of Bite GSM, said on Dec. 9, "We are very interested in acquiring the GSM and UMTS license." However, he pointed out that four weeks was too short a period for making corporate decisions that require hundreds of millions of euros in investment.
The Latvian Telecommunica-tions Association had urged the government to change the terms of the license auction by extending the deadline for applications by another month and dropping investment requirements to set up a nation-wide network within a year.
The government adopted the auction terms on advice from ITT. The starting price for the license is 1.3 million lats (1.87 million euros), requiring the winning bidder also invest 150 million euros in the project in one year's time.
Experts have suggested that the tender was prepared with the interests of ITT in mind. They claim that the company's representative is a business associate of Transport Minister Ainars Slesers.
Eriksen, however, rejected criticism on the tight investment schedule. "We ourselves will try to build the network as soon as possible because it is the only way how to get a return on those investments," he said.
He expressed conviction that the government would change the auction terms and extend the deadline. "We believe that the Latvian government will listen to our opinion. Because the main goal of the government is to create competition in the mobile communications market, and we are ready for this," he said.
TDC, previously known as Tele Danmark, operates in 11 European countries, including Lithuania, where it holds 100 percent in Bite GSM, which has a 25 percent market share.
Bids have to be submitted to the Latvian Transport Ministry by Dec. 21, and the auction could be held on Jan. 7 next year.
At present mobile communications in the GSM network are provided by Latvijas Mobilais Telefons and Tele2, both of which also have a UMTS license. A third operator, Triatel, recently started providing services in the CDMA standard.
