Latvia to auction third mobile-phone license

RIGA - Last year, the Cabinet of Ministers decided Latvia could have a third mobile phone network operator. This third operator would be competing with the already existing companies, Latvijas Mobilais Telefons and Baltkom GSM. These plans, however, may not be realized in the nearest future any way. There is a decision that a company which would like to operate on the Latvian market has to participate in an auction for it, but responsible parties at the Ministry of Transport are yet to figure out how to organize the auction.

Minister of Transport Anatolijs Gorbunovs said a third license would most likely not be offered until the end of this year and that currently, the newly appointed auction commission was trying to locate an international consulting company to be selected by means of a tender. This company would then be responsible for organizing the auction.

The new trend in Europe is for governments to auction out licenses to operators, hoping to squeeze out billions of dollars just like the German government succeeded in doing last year. Still, there are also new tendencies showing operators are ganging up to keep the costs down. Costs that in the end will have to be made up for by the operators' customers.

This new license offered is called the universal mobile telecommunication system and it is solely a digital system. It means all communications over the system are translated into ones and zeros - binary numbers. This allows information to travel faster and more accurately between two or more communicating devises.

Finland became the first country in the world to award licenses for operations in this third generation mobile telecommunications networks back in early 1999. Sweden followed the following year.

Along with the universal system license, a GSM 1800 frequency telecommunication license will be auctioned as well. This was suggested by Economics Minister Aigars Kalvitis, because initially there would not be many customers for the universal mobile telecommunications system, in his opinion, and with the extra offer more bidders would be attracted to participate in the auction.

The head of the communications department at the Ministry of Transport, Inara Rudaka, told LETA last year that a competition would be a better method for issuing the third mobile network license since it is her opinion that the license would cost less, and later the operator's clients would have to pay for it.

When the eminent auction has taken place, LMT and Baltkom GSM will be offered to buy universal mobile telecom licenses for the price the auction sets.