Internet providers announce union

  • 1999-05-20
RIGA (BNS) - Two Latvian Internet service providers, LvNet Teleport and Parks Interneta Serviss, launched a merger May 11 that will create the largest Internet provider company in the country.

LvNet Technical Director Vitalijs Mozerts said the merger would be complete in three months. LvNet Teleport was the first Internet provider company in Latvia which began operating in 1993.

The name of the new company will be Parks LvNet, and it will be equally owned by current shareholders of LvNet and Parks. After the merger is completed the new company will also look for a strategic investor.

Mozerts said that the first moves towards the full merger included optimization of cash flow as well as joint provision for maintenance of consulting hot-line services for the clients of both companies.

As a result of the merger, the new company will have a 40 percent share of the Internet market, but Parks LvNet intends to increase this share.

There are 33 Internet providers operating in Latvia, but Parks LvNet will have to compete mainly with Apollo, a subsidiary of the Latvian telephone company Lattelekom, and Latnet.

Parks Director Einars Bindemanis said Apollo had 20 percent to 22 percent of the Latvian Internet market and Latnet had a share of 15 percent.

In the current situation the resources which could be used to extend and promote the Internet were often used to fight against competitors, Parks LvNet representative Ieva Rietuma said.

At the same time, the merger between two strong companies would provide Internet services, better quality and integrate in the common European market of information technologies as an equal partner.

Ina Gudule of Apollo said the merger will promote development of the Internet market in Latvia but will not significantly increase competition.

She said the merger of LvNet and Parks is natural because the 33 Internet operator companies currently operating in Latvia are too many, and most of them have a small circle of customers.