Repse offers TeliaSonera Xmas compromise

  • 2004-01-08
  • Baltic News Service
RIGA - TeliaSonera, the Scandinavian telecommunications giant that owns 49 percent of the former fixed-line monopoly Lattelekom, received a letter from Prime Minister Einars Repse offering an immediate settlement in the arbitration case concerning the premature termination of Lattelekom's monopoly rights.

Kjell Lindstrom, communications director of TeliaSonera's Norway, Denmark and Baltic states operations, said that the company received the offer over the Christmas holiday and "looks positively toward what was said in the letter," according to the daily Dienas Bizness.
At the same time, the prime minister's aide Viesturs Sutko, also a member of the working group heading the negotiations with TeliaSonera, said that the Latvian government hoped to reopen settlement talks with the company in the first two months of this year.
Sutko told the Baltic News Service that the settlement proposal has been drafted keeping in mind the maximum benefit to the state's interests. He said Latvia had also looked into TeliaSonera's proposal to buy the state-owned shares in Lattelekom and mobile telecommunications company LMT but would not yet speak about the state's position on the offer.
Leena Suhonen, Lattelekom's executive director, said that the company usually refrains from commenting on issues between stakeholders but said that the arbitration case launched several year ago "has troubled the work of the council of directors" and that "if it ended the board would be able to concentrate efforts on forming the further strategy of the company."
Dienas Bizness also wrote that TeliaSonera has made an unofficial offer of between 2 billion Swedish kronor (220 million euros) - 3 billion kronor for the state-owned 51 percent stake in Lattelekom.
In spring 2003 the Scandinavian company announced that it was eager to buy 100 percent of the shares in both Lattelekom and Latvijas Mobilais Telefons - the country's mobile phone operator in which it also holds a 49 percent stake.
Several years ago Tilts Communications, the holder of 49 percent in Lattelekom that later merged with Finland's Sonera, took the Latvian state to court for reducing the Lattelekom monopoly on fixed-line services by 10 years, which the state felt compelled to do in order to meet antitrust requirements on joining the European Union.
Latvia responded by filing a counterclaim against TC, stating that the company had failed to meet all of its obligations, including modernization of the country's fixed-line telephony system, under the privatization umbrella agreement.
The state currently holds 51 percent in Lattelekom, while Tilts Communications, now owned by TeliaSonera, maintains its 49 percent stake. The state of Latvia also holds 5 percent in LMT. Other holders of the mobile phone operator include TeliaSonera (49 percent) and Lattelekom (23 percent), as well as the state-owned Digital Latvian Radio and Television Center (23 percent).