RIGA - At an extraordinary Cabinet meeting on Dec. 20 the government gave a two-month extension to the deadline for applications in the auction of a third UMTS and GSM mobile-telecommunications license.
Transport Minister Ainars Slesers told ministers that the deadline for bids needed to be extended since several potential bidders had complained about the short timeframe in the original tender.
He also said the ministry would send invitations to the auction to all major EU mobile-communications operators to take place in the auction, the bidding for which will close Feb. 25, 2005.
To ensure investor interest, the government dropped the requirement that the new operator build a new telecommunications network covering all of Latvian territory in a year's time. Bidders will, however, be required to submit a detailed investment plan to eliminate concerns that some of the investment money will be used for purposes other than developing the telecommunications network.
Prime Minister Aigars Kalvitis pointed out that Latvia hoped to reduce call rates by issuing the third license, but the demand to build a new network over one year would increase the operator's costs and hence its tariffs.
Under the auction terms previously approved by the government, the deadline for filing the bids was Dec. 21, with the actual auction to take place Jan. 7, 2005.
The initial price of the license was set at 1.3 million lats (1.8 million euros), but the winning bidder will also be required to invest 150 million euros in development of an independent telecommunications network.
An international consortium, International Telecommunications and Technologies, announced its willingness to bid for the license, while Denmark's TDC said it also was interested but complained about the short deadline.
Latvia's Alina, which used to own Baltkom GSM operator, which was sold to Swedish investors and renamed Tele2, also expressed interest in obtaining the license.
At present Latvia has two mobile operators, LMT and Tele2, both of which hold GSM and UMTS frequency licenses.
