Latvia, Markets and Companies, Telecomunications

A year ago, around 10 to 15% of the total number of customers were in debt to their mobile operators; now the number of debtors has surged by five to eight%, Latvian Telecommunications Association's executive director Janis Lelis points out to the newspaper.

"Earlier defaulters were more diligent and tried to pay their bills, but now increasingly more often operators turn to debt collectors for help," Lelis points out.

Head of public relations at Tele2 Vita Sirica said in the interview to the newspaper that the overall economic recession has also affected the number of customer debts at Tele2. Sirica also commented that customers are now more reluctant to sign long-term contracts, as well as are more sensitive towards the price and offer, writes LETA.

Telecommunications operator Latvijas Mobilais Telefons (LMT) press secretary Elina Lidere admits that the economic situation has affected the capability of customers to pay their bills on time. She underlined that LMT tried to encourage its customers to a dialogue and jointly seek solutions for each case instead of simply evading paying, Lidere said.

However, Lelis underlines, performance of mobile telecommunications operators in Latvia if still better than for companies in other sectors.

Among Latvia's mobile operators, LMT remains in the leading position regarding incomes; over the first nine months of the year the company's turnover reached LVL 120.4 million (10% drop on the results of the same time period last year), according to TeliaSonera operational report. LMT profitability, based on the company's earnings before interest, taxes, depreciation and amortization (EBIDTA) reached 41.8% in January-September 2009, compared with 43.8% in the same time period a year earlier.

Over the first nine months of the year, Tele2 registered a two% drop in turnover, which totaled LVL 85.9 million. The operator's EBIDTA over the first nine months was LVL 28.4 million, or 14% lower than in the same time period in 2008. The number of Tele2 customers in Latvia shrank from 1.13 million at the end of the first nine months of 2009 to 1.08 million in end-September this year.

Earnings of the telecommunications operator Bite Latvija totaled LVL 16.4 million by end-September this year, while last year its turnover over the first three quarters of the year stood at LVL 11.6 million. Bite Latvija registered a negative EBIDTA index in January-September 2008: minus LVL 5.5 million.