TeliaSonera aiming for Baltic dominance

2 Jul 2003

Nordic telecoms giant TeliaSonera [Nasdaq:TLSN] has said it plans to bolster its portfolio of Baltic telecoms interests by taking control of Latvian mobile operator LMT. TeliaSonera currently holds 49% of LMT with the remaining shares owned by Digitalais Latvijas Radio and Television (23%), fixed line operator Lattelekom (23%) and the Latvian Ministry of Transport (5%). It has yet to detail which of these shareholdings it is looking to target, saying only that it is exploring ‘every opportunity’ to take majority control of LMT, which shares the Latvian mobile sector with pan-European rival Tele2. TeliaSonera is also keen to increase its other Baltic shareholdings; these include a 49% stake in Latvia’s fixed line monopoly Lattelekom, 60% of Lithuanian fixed line provider Lietuvos Telekomas, 55% of Lithuanian mobile operator Omnitel and 49% of Estonian fixed line and mobile operator Estonian Telecom.

Its first target, LMT, was established in 1991 as an analogue NMT-450 operator and launched the country’s first GSM network in 1995. By the end of 2002 the GSM service covered 96.4% of the population and had just over 458,000 subscribers, a rise of 100,000 over the year, while its analogue network had around 16,000 customers. The two figures together gave LMT a 52% share of Latvia’s mobile market, ahead of its sole rival Tele2, which had 443,000 subscribers to its GSM network at the end of 2002. LMT’s battle to keep ahead of Tele2 was aided by a decision by the Latvian Public Utilities Commission in December 2002 which amended its licence to allow it to sell subsidised handsets – a practice already used by its competitor. The threat from Tele2 has also prompted LMT to introduce new services. It launched nationwide GPRS services in 2002, claiming 45,000 users by the start of 2003.