EU – Baltic States, Latvia, Markets and Companies, Technology, Telecomunications

Gulbis said that in order to provide a full range of services, Lattelecom is lacking mobile communications, and it is the company’s future goal. „If the financial situation of Latvia’s Lattelecom e-services provider has been stable so far, in the future the company’s development prospects are limited without entering the mobile market due to external market situation,” said Gulbis.

He said that in line with the new strategy of Latvijas Mobilais Telefons (LMT) mobile operator started in 2013, LMT is offering more and more service that are already offered by Lattelecom. „What we see is that such development requires time, and it also means additional investments from shareholders,” he said.

Gulbis also pointed that the unbalance of capital in both companies – while LMT’s liabilities are growing, Lattelecom has accumulated reserves. „Lattelecom as one of the shareholders in LMT believes that the unbalanced situation should be corrected,” said Gulbis.

The Latvian parliamentary committee on public expenditure and audit earlier on Tuesday resolved to call on the government to put off the decision about further actions with the state-held shares in Lattelecom and LMT until ”an objective high-quality analysis of the socioeconomic situation” is performed.

The Latvian government is set to decide on the future of the state-held shares in Lattelecom and LMT on April 12. The options considered so far include a merger of both companies or letting them to continue functioning separately with the Latvian state keeping the controlling stake in the two companies in either case.

At the request by the Latvian government, Scandinavian telecommunications group TeliaSonera which also holds shares in LMT and Lattelecom submitted its proposal for the future of both companies to the government on November 20, 2015, and expected the government to reply by January 22, 2016, but agreed to wait for the decision of the new government which took office on February 11, 2016.

Economics Minister Arvils Aseradens (Unity) would prefer leaving the situation as it is while Finance Minister Dana Reizniece-Ozola (Greens/Farmers) believes that the Latvian state would benefit from a merger of Lattelecom and LMT but should keep the controlling stake.

TeliaSonera also favors the merger scenario as it would improve efficiency of operations and the quality of services provided to customers.

The Latvian government has been debating the possibility to sell off its stakes in LMT and Lattelecom for years, but no agreement has been reached on the issue so far.

Lattelecom is a leading Latvian telecommunications company. Its shareholders are the Latvian Privatization Agency which holds 51 percent on behalf of the Latvian state and Tilts Communications (49%), a subsidiary of TeliaSonera registered in Denmark.