RIGA - A top government advisor has admitted that there are three companies interested in acquiring control of Lattelekom, Latvia's main fixed-line phone service provider, other than TeliaSonera, the Scandinavian concern that largely controls the company.
Aigars Stokenbergs, economic advisor to the prime minister, was quoted as saying that, "If we speak about Lattelekom, we have a concrete offer from TeliaSonera for a concrete amount of money. We have unofficial offers from another three companies, which focus not on investment projects but rather on communications."
The news of widening competition for the lucrative asset is a signal to TeliaSonera, considered to be the likeliest candidate to acquire the state's 51 percent stake in Lattelekom, that talks will be tough.
As Stokenbergs explained, it was not easy for the government to decide how best to sell its shares of Lattelekom and LMT, the ultra-profitable mobile operator. "The existing agreements with TeliaSonera give this company priority rights in purchasing Lattelekom shares, and Lattelekom has a pre-emption right in case LMT shares are sold," he said. "So there are not many ways to maneuver."
TeliaSonera has offered to purchase the state's 51 percent interest in Lattelekom for 274 million euros and a 28 percent stake in LMT for 168 million euros. The Scandinavian company estimates Lattelekom's total value to be 400 million euros and LMT's 600 million euros.
Lattelekom announced the results of a study showing that by acquiring Microlink it would have a 46.2 percent share of Latvia's data transmission market. The study showed that in 2004 Lattelekom commanded a 36.9 percent share of the data transmission market, while Microlink's share was 9.3 percent. It also showed that Lattelekom's market share has been declining in recent years 's from 56.3 percent in 2002, to 39 percent in 2003 and to 36.9 percent in 2004.
The company estimates that the entire data transmission market in Latvia, including Internet services, is worth some 42 million lats (59 million euros).
Inese Lensa, a representative of Lattelekom and Latvia's IT & Telecommunications Association board member, said, "Service providers are particularly active in Riga and the vicinity, which is the place of residence and work for almost half of Latvia's population and where demand for the services is highest," she said.
