Danes raise stakes in mobile market

  • 1999-01-21
  • Paul Beckman
VILNIUS - Tele Danmark officials announced Jan. 12 that the company has almost doubled its stake in two of Lithuania's prominent mobile telephone firms to tone up its regional competitive muscle.

The Danish telecommunications company would increase its share percentage in the mobile phone operator Bite GSM to 71.6 percent and in Comliet to 49 percent.

Instead of revealing how much his company paid Dutch Millicom East Holding for the shares, Tele Danmark Vice President Yves Farjot seemed more comfortable talking about how Bite GSM and Comliet will be affected by the purchase.

Farjot promised both companies would benefit from technological upgrades. The future transfer of technology systems and processes to Bite is expected to make the company more competitive.

The general directors of Bite GSM and Comliet were fairly quiet on the issue and did not mince words when commenting.

"This is a very normal process," Vytautas Kuzma, Comliet's general director, told TBT. "It's a simple business action. Someone sells something and someone else buys it."

Tele Danmark's increased amount of shares in the two Lithuanian companies may serve as a comeback for them. The company has been active in the country since 1990, but suffered a blow last summer when they failed to win the privatization tender for a 60 percent stake in Lithuanian Telecom.

Instead, the Amber Teleholding consortium, consisting of Sweden's Telia and Finland's Sonera, emerged as the victors. Farjot said the loss was hard to swallow, but that Tele Danmark had no plans to simply disappear from the Lithuanian telecommunications market.

"I have to confess that the disappointment [of losing the tender] was so strong that for a short moment I was thinking that we might be leaving," admitted Farjot. "We decided we should stay in this country because this is the best market in the Baltic region. Another reason of course is that it is in the [geographic center of out activity]."

According to Farjot, Bite GSM and Comliet currently control about 50 percent of Lithuania's mobile phone market, 40 percent and 10 percent respectively. The combined percentage, Farjot said, is comparable to that controlled by market leader Omnitel.

Although Tele Danmark officials are not expecting the percentages to change by year's end, the struggle with Omnitel pits the Danes against an old rival. Amber Teleholding owns a 55 percent stake in Omnitel.