Telecom profits rocket

  • 2001-03-15
  • Jorgen Johansson
RIGA - Just one day ahead of Latvian joint-stock phone company Lattelekom's announcement of its operational results for last year, shareholders of Lattelekom failed to decide on how to distribute the profits.

Lattelekom state trustee Edvins Karnitis told BNS that the decision had been put off until the company's modernization plan was approved. Still, shareholders did not leave empty handed since the company had enough funds to pay dividends.

The president of Lattelekom, Gundars Strautmanis, confirmed it was decided to postpone how to divide last year's profits.

"One of the main reasons is because of the arbitration going on in Stockholm between the Latvian state and Tilts Communication," Strautmanis said.

Tilts Communication decided to file a law suit against the Latvian state last year, when the state decided to cut short the promised state monopoly by several years.

Strautmanis said he hopes Lattelekom's board of directors at least can decide to accept the budget for this year next time they meet.

Leena Suhonen, managing director of Lattelekom, said that last year was very successful for the company.

"Though the country is undergoing rapid changes, we have been able to keep up," she said.

Lattelekom paid special attention to developing data transmission services, and the company is promoting usage of the Internet. More than 460 kilometers of fiber optic cables were integrated into the network last year, reaching a total length of 2,226 kilometers.

The company made a net profit of 23.3 million lats ($38.5 million) on revenue of 136.5 million lats last year, which is an increase by 2 million lats compared to the previous year.

Still, making money costs money. The State Revenue Service recognized Lattelekom as one of the biggest taxpayers in six different categories. The company paid more than 28 million lats in taxes last year.

Suhonen said she was, of course, pleased over last year's results and the increased profit.

"The most important figure, however, is the operational profit (26 million lats), which is 17 percent higher than the previous year," she said.

Last year, Lattelekom invested 43.9 million lats in modernizing its telecommunications network. The digital network has been hugely expanded with more than half of all fixed phones in Latvia connected, compared with 1994 when only two percent were connected.

"Internet Protocol is the future of telecommunications and Lattele-kom will, of course, be in the front line in introducing this technology as soon as there is a demand on the market," Suhonen said.

Lattelekom did not only focus on improving the telecommunications situation in Riga. New call centers were set up in the towns of Rezekne, Cesis and Liepaja, along with Riga; more than 3,700 modern pay phones were installed throughout the country and six digital exchanges were installed outside Riga.

Over the last seven years, Lattelekom has invested some 350 million lats within the country.