Another call for State retreat

  • 2010-03-04
  • From wire reports

RIGA - Latvian businessman Peteris Smidre, founder and director of the cable television and communications company Baltcom, believes that all state companies should be privatized, and not just Lattelecom and Latvijas Mobilais Telefons (LMT), reports He adds the caveat that these two telecoms companies should not be sold to the Swedish telecommunications concern TeliaSonera.

Smidre expresses his confidence that, as entirely private companies, the two firms would succeed in reducing their expenses, and consequently also their prices and tariffs. Although the telecommunications expert earlier said that Lattelecom should be privatized as quickly as possible, Smidre stressed that a private monopoly would be undesirable, and that he is concerned that this is what would happen should Lattelecom and LMT be bought up by TeliaSonera.

“The Scandinavian company could acquire a 100 percent monopoly. Lattelecom already has fixed home phone connections, digital TV rights, and also a mobile operator - LMT. I do not care for such monopolies,” he complained.
The businessman believes that it would be more profitable for the state to sell a 51 percent controlling interest in Lattelecom, which would leave the Swedish company as co-owner of the company. In the future, after altering legislation, the companies Latvijas mezi (Latvian State Forests) and electric utility Latvenergo could also be privatized, recommends Smidre.

“A private company which has monopoly rights is even worse than a state company,” he worries. “From the state’s point of view, competition should be ensured between businesses which operate in the same sphere. Competition forces companies to operate more efficiently,” said Smidre.