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Latvia turns down Scandinavian company's offer to merge telecom companies

Xinhua, April 20, 2016 Adjust font size:

Latvian government decided on Tuesday not to merge the country's two leading telecommunications services providers and refuse to sell its shares in the companies to Scandinavian telecommunications group TeliaSonera.

Lattelecom landline telecommunications and internet services provider and Latvijas Mobilais Operators (LMT) mobile operator will not be merged, at least for now, government ministers decided.

Latvian Prime Minister Maris Kucinskis told reporters following a cabinet meeting that the government has thus declined all the proposals submitted by TeliaSonera regarding the companies' future.

"The ministers were unanimous that TeliaSonera's current proposals are not acceptable to us," Kucinskis said.

Economics Minister Arvils Aseradens indicated that the decision was taken because the competition situation in Latvia is currently very good and that it would be unwise to create unnecessary risks to it.

"The situation in the Latvian market is perfect in terms of competition," the minister said. "We receive very good services for comparatively low prices."

LMT CEO Juris Binde praised the government's decision, saying that it helps protect the interests of consumers and the state.

Although generally accepting the decision, Lattelecom CEO Juris Gulbis warned that the competition-related issues that had made the government consider the company's merger, are not going to disappear in the future.

The government had to respond to TeliaSonera's offer to buy the government-owned shares in Lattelecom and LMT.

The Scandinavian telecommunications group had proposed three possible scenarios: TeliaSonera purchases the government-held shares in LMT and Lattelecom; LMT and Lattelecom are merged and TeliaSonera acquires a 54 percent stake in the company, while Latvia is left with a 46 percent stake; or Latvia buys out the stake in Lattelecom and LMT currently owned by TeliaSonera.

Kucinskis said, however, that the Latvian government might buy out the Scandinavian company's stake in the strategic telecommunications companies because of security concerns in the future, if TeliaSonera decided to sell its shares to someone unfriendly to Latvia.

At present, Latvia holds 51 percent and TeliaSonera 49 in Lattelecom. LMT shareholders include TeliaSonera (49 percent), Lattelecom (23 percent), the state-owned Latvian State Radio and Television Center (23 percent), and the Latvian Transport Ministry (5 percent). Endit