RIGA - Latvijas Mobilais Telefons (Latvia Mobile Telephone) surpassed Swedish-owned rival Tele2 last year in profits, although the latter saw a steeper rise in profitability compared with 2003, according to official data.
LMT's profitability in 2004 was 36.6 percent, while Tele2's was 32.2 percent. In comparison with 2003, profitability rose by 3.4 percent for LMT and by 5.8 percent for Tele2.
The regulator concluded that the high profitability of both mobile operators, along with its tendency to increase, suggest that the tariffs set by operators are significantly higher than actual costs.
However, this seems set to change, as a third operator is expected to enter the market by the end of the year. In March Lithuania's Bite GSM mobile operator purchased the state's third UMTS/GSM operator license and agreed to invest some $150 million in building a mobile communications infrastructure.
LMT ended 2004 with earnings of 54.6 million lats (77.8 million euros), a 29 percent increase year-on-year. Sales rose by 14.7 percent to 149.3 million lats.
Digitalais Latvijas Radio un Televizijas Centrs and Lattelekom each own 23 percent of LMT, while the state owns 5 percent, and the Scandinavian TeliaSonera company 's 49 percent.
Tele2, a subsidiary of Sweden's Tele2 AB group, saw its sales jump 27 percent to 79.8 million lats last year. Profit reached 25.8 million lats, up 55 percent year-on-year.
