Latvia's Baltkom GSM sold for $277 million

  • 2000-10-05
  • TBT staff
RIGA - Tele2 AB, a subsidiary of Sweden's NetCom AB, purchased Latvia's second leading mobile telecommunications operator, Baltkom GSM for $277 million, NetCom said in a statement Oct. 3.

The amount includes Baltkom GSM's liabilities of some $53 million worth of shareholder loans and bank credits.

The purchase will be completed after approval from the Latvian Transport Ministry, which is likely to agree, the ministry's executive Inara Rudaka said.

"We are very glad that Baltkom GSM has accepted our offer to give this prospective company over to secure hands, which on turn allows us to develop a joint communications network in all the Baltic states," said NetCom in a statement.

Tele2 AB services presently are used by over 9 million clients in 18 countries across Europe. NetCom AB group includes systems integrator Datametrix, a fixed telephone network and Internet service companies Optimal Telecom and 3C Communications as well as other telecommunications companies.

NetCom AB group also comprises cable televisions in Sweden, Estonia and Lithuania, known to the customers in these countries also as Kabelvision, Tele2, G-Gates. NetCom AB together with Modern Times Group also owns Internet portal The company's shares are quoted on the Stockholm Stock Exchange as well as on NASDAQ stock market.

Baltkom GSM claims some 90,000 subscribers. Its biggest shareholder was the firm Alina, owned by Peteris Smidre.

Baltkom GSM shareholders also include Metromedia International Group, Western Wireless International Corporation. Baltkom GSM suffered a loss of 2 million lats in 1999.

The largest mobile network in Latvia, Latvijas Mobilais Telefons, is positive about the Baltkom GSM deal and hopes for "healthy and honest competition" in the future, the company's spokesman Davids Dane told The Baltic Times. However, he refused to give detailed comments on the Baltcom GSM deal's future impact on the mobile connections' market in Latvia, stating that the company's CEO was not available for comment.