Telecoms merger doubtful as coalition party signals lack of support

The chances of two of Latvia's major telecoms firms merging diminished markedly November 6 with the National Alliance, one of the three parties in the ruling coalition government, declaring it does not back the proposed merger of Latvijas Mobilais Telefons (LMT) and Lattelecom.

MEP Roberts Zile, a member of the National Alliance board, told LETA that the party had a good discussion about the issue, with his party colleagues Justice Minister Dzintars Rasnacs and Culture Minister Dace Melbarde also taking part in the debate.

Zile said that the National Alliance does not agree with outgoing Economics Minister Arvils Aseradens’ position on LMT and Lattelecom and that the party has not heard any argument showing the necessity of merging the two companies.

If the government addresses the issue at its meeting tomorrow, the National Alliance will not support the merger.

The coalition agreement signed by NA along with the Greens and Farmers Union and the Unity party means that if any one party voices strong objections to a policy proposal, it is automatically removed from the table - which now looks the likely fate of the proposed merger.

On Twitter the NA said a merger would be against the interests of both the state and consumers.

As previously reported, the government was expected to agree in principle to start talks on the proposed merger.

Scandinavia’s Telia Company has warned the Latvian government that it could sell its shares in Latvijas Mobilais Telefons (LMT) and Lattelecom if the two companies are not merged, according to Telia Senior Vice President Robert Andersson's letter to the government.

Telia Group companies Sonera Holding and Telia Company own 49 percent of LMT shares altogether, while Latvian Radio and Television Center and Latvian Privatization Agency - 28 percent. Lattelecom, which belongs to Telia and the state of Latvia, owns 23 percent of LMT shares.

Telia Group company Tilts Communications owns 51 percent of Lattelecom shares, and Latvian Privatization Agency the other 49 percent.

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