No delay on telecoms decision promises PM

The Latvian government will not put off making a decision about the future of the Lattelecom and Latvijas Mobilais Telefons (LMT) telecommunications companies partly owned by the Latvian state, Prime Minister Maris Kucinskis (Greens/Farmers) told the press on Tuesday.

The Latvian parliamentary committee on public expenditure and audit earlier on Tuesday resolved to call on the government to put off any 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.

Kucinskis said the request by the lawmakers was objective but the government would nevertheless discuss the future of both telecommunications companies either on April 12 or the following week.

The government will consider two possible scenarios - merging the two companies or leaving the situation as it is.

"The government does not need further analysis to take the decision about keeping the status quo. If we decided on a merger, an in-depth analysis of risks and benefits will be required," the prime minister said.

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 percent), a subsidiary of TeliaSonera registered in Denmark.

Founded in 1992, LMT is the oldest mobile operator in Latvia. LMT shareholders are Scandinavia's TeliaSonera (49 percent), Lattelecom (23 percent), the state-owned Latvian State Radio and Television Center (23 percent), and the Latvian Transport Ministry (5 percent).

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