Race for digital TV picks up

  • 2003-08-07
  • Baltic News Service
RIGA - Slightly over a week after Latvian Transport Minister Roberts Zile received an offer from former Prime Minister Andris Skele to buy the state-owned digital television project company (DLRTC), Peteris Smidre, another local businessman and one of the founders of Latvia's second mobile communications operator Baltkom, now named Tele2, also stepped into the competition.
Smidre announced that the telecommunications holding Alina, which he co-owns, is ready to introduce the digital television network system to Latvia without using the 23 percent stake in Latvijas Mobilais Telefons mobile-telecommunication company held by DLRTC to finance the project.
Smidre said that Alina would be able to ensure all the necessary investments for implementing the digital TV project, adding that the dividends from the LMT shares should be used for solving more pressing problems in the interests of the general public.
Skele's offer to buy the digital TV project for $70 million - $90 million was criticized as a veiled attempt to grab the lucrative stake in LMT, which alone is worth the proposed price.
The offer by Smidre, in comparison, includes comments that for the digital TV system to work in Latvia, state support would be needed to subsidize the purchase of digital television decoders for all social groups in the country.
Smidre would not mention any price for the deal but said that it could be discussed once the government showed interest in his proposal.
Smidre said that Alina started considering participation in the digital project after having heard of bad contracts signed with a foreign company that were not in the state's interests.
Also, it was reported last week that Alina has bought a 50 percent stake in the local Baltkom TV cable company from U.S.-registered Metromedia International Group for $14.5 million.
According to a statement made by MIG, Alina has thus raised its share in the country's largest cable TV company to 95 percent, with a remaining 5 percent held by the Latvian State Radio and Television Center.
The cost for the 50 percent stake included $13.2 million that Baltkom TV owes the U.S.-based company, while the remaining $1.3 million will be received by MIG in two separate payments after the deal is finalized.
According to the Lursoft database, 75 percent of Alina is owned by Smidre, who used to own the entire company before selling a 25 percent stake to his partner, Juris Mazarevics.
Alina also once owned the second Latvian mobile telecommunications operator Baltkom GSM, now Tele2, which Smidre sold in 2000 for $277 million.