Amber Teleholdings grabs control of Omnitel

  • 1998-07-23
  • Parker Ruis
VILNIUS – Amber Teleholdings has made so many headlines in the Lithuanian press recently that the consortium's name has almost become a household word. Consisting of Sweden's Telia and Finland's Sonera, the Scandinavian combo first received an enormous amount of attention when it struck a deal with the Lithuanian government for the purchase of Lietuvos Telekomas (Lithuanian Telecom), bringing the highly publicized and occasionally controversial privatization process of the company to a welcome end.
More recently, Amber Teleholdings once again jumped back into the spotlight with its purchase of the controlling share package in the mobile telecommunications leader in Lithuania, Omnitel, in mid-July. While the specific conditions of the deal have not yet officially been revealed, it is clear that Amber Teleholdings has taken a huge leap into the mobile telephone market.
"We can say that Amber Teleholdings purchased (a controlling) 55 percent of Omnitel shares," Omnitel Spokeswoman Vanda Nekrasiene, told TBT. "At this moment, according to our agreement, we are not able to reveal how much was paid for the shares, however."
While also unable to obtain specific information concerning the agreed price, the Lithuanian business newspaper Verslo zinos reported that it has derived from sources that the price tag could be somewhere around $150 million.
A majority of the shares have been bought from the Kazickas family, who are Lithuanian-Americans.
Before Amber Teleholdings' purchase of a 60 percent stake in Telecom, complete with monopoly rights until the end of 2002, and the controlling share package of Omnitel, which Nekrasiene estimated at 60 percent of the mobile telecommunications market in Lithuania, the Swedes and Finns had already been conducting some comparatively smaller activities in the market. Now it appears that the consortium has set itself up to be the biggest player in Lithuania's telecommunications market.
According to Remigijus Simasius of the Lithuanian Free Market Institute, Amber Teleholdings' big purchases and increasing presence in the Lithuanian telecommunications market will not endanger the freedom of the market nearly as much as the current government restrictions do.
"All the restrictions to the entire market create more limitations and are more dangerous than a business," said Simasius. "The licenses needed by the operators of mobile telephones and the restriction of fixed telecommunications [until the end of 2002], which includes foreign calls, creates a very big problem."