Latvia to auction UMTS licences this summer

Latvia will auction three licences for third-generation mobile phone services as soon as this June, an official at the Baltic country's Ministry of Transport and Communications said April 2.

The Great Britain-based consortium National Economic Research Associates will manage the long-awaited auction of three universal mobile telecommunications standard (UMTS) licenses, said Inara Rudaka, director of the ministry's communications department.

UMTS is one of the major new third-generation mobile communication systems. The system is designed to accomodate multimedia mobile technology like WAP much faster than the current GSM system. The market worldwide will exceed 1 trillion U.S. doallars over the next 10 years, according to industry estimates.

The first UMTS licenses were issued last year and about 100 have been awarded since then.

Talks on issuing the licenses in Latvia earlier failed because of political obstacles.

A third licence to use the 1800 MHz frequency in the GSM system will also be auctioned, said Rudaka.

"The auction will be possible this summer, in June or July, depending on the consultants," she said.

A third operator is being sought to compete alongside the two current GSM operators Latvijas Mobilais Telefons - owned by Swedish operator Telia and Finland's Sonera - and Baltcom GSM, which is owned by Sweden's NetCom.

Baltcom and LMT are likely bidders for two of the UMTS licenses. The third will be packaged with the 1800 license, according to industry sources.

The government hopes to raise a minimum of 15 million lats ($23.44 million) from the sale, said Rudaka.

The National Economic Re-search Associates' fee will equal 1.92 percent of the money raised.

Latvian mobile phone use has increased rapidly in recent years with 625,200 subscribers in the country of 2.4 million, according to industry sources.

Estonia expects to offer four 3G licenses sometime this year.