Saturday, March 25, 2006

Some remarks from afar

Well, I have been in California for almost a week. I was at a mall in Burbank, hanging around, waiting for my wife to return from a store that interested her, when I started talking to some guys at a T-Mobile stand. It turns out that a lot of the goodies we take for granted are still on the future horizon here. They had heard of, but didn't offer any of the Nokia N series phones. HSDPA, which we don't have but will soon have in Latvia is something they have hardly heard of, nevermind EV DO, the high speed wireless internet standard that Triatel offers and that will be capable of multi-megabit speeds by the end of this year.
If you have a Latvian GSM (LMT) phone, the coverage has been good so far, with Cingular popping up more often than not. It is possible to call US mobile phones of unknown network (such as the phone of a former colleague who moved to California some years ago), but not possible to send SMS.
So far the places we have been staying (imcluding a very cheap motel-type place in Hollywood) have had good free wireless internet or free internet (Ethernet line here in San Diego). I have used SkypeOut to make calls to US phones, but Latvia remains expensive (around EUR 0.20 per minute) so I have not made any Skype calls (also, there is a rather large time difference and by the end of the day here, it is the middle of the night in Riga).
Off on a day trip to Tijuana, Mexico today (Saturday). A day of sad remembrance in Latvia, the March 25, 1949 deportations.

Friday, March 17, 2006

Wish they all could be California girls...

Well, folks, even bloggers have to have some downtime. As it is, I am flying with my family (wife, 10 year old son) to Los Angeles via London over the weekend. We will visit Universal Studios, Hollywood, the San Diego Zoo, Las Vegas, the whole scene. Just taking it easy. It is my two weeks away from the daily paper as well. For the simple reason that I am away from Latvia, I won't be posting much from the US (as I would were I at some interesting IT or telecoms event). Just so you know, my dear readers.

Thursday, March 16, 2006

Lattelekom + Triatel = true!

Or thats what it says on the ladies' bathroom wall, where ( I am guessing, being male) messages of affectionate relationships are scribbled.
The "love story" is one that was hinted at a long time ago on this blog. Namely, Lattelekom and cdma 450 operator Triatel have been running a pilot project to "digitalize" certain rural areas using Triatel's fixed wireless technology rather than running fiber or cable to shacks in the woods. Over the past six months, several hundred phone lines have been installed in this way -- officially by Lattelekom, but with the network capacity and perhaps the phones provided by Triatel. Look for this to be officially sealed and announced in the next few months.
This also means that Lattelekom, a faithful Ericsson and Alcatel infrastructure customer, is entrusting part of its traffic to infrastructure delivered to Triatel by China's Huawei. That is another "secret" partnership we revealed on this blog some time ago. For Huawei, it is a significant indirect endorsement.

Wednesday, March 15, 2006

Minister of Transport (and telecoms) fired

Prime Minister Aigas Kalvitis asked Minister of Transport Ainars Slesers to resign, which the minister did. The reason was that Slesers "had lost the public trust" because of his alleged involvement in a bribery scandal surrounding the election of the mayor of Jurmala, a Riga suburb by the seaside. Transcripts of an eavesdropped telephone conversation seem to indicate that Slesers was aware of an attempt to bribe a city council member to vote for the candidate of Sleser's Latvian First Party. See the earlier item about "the biggest cretin". Slesers has denied any wrongdoing.
I won't go into the bizarre and sordid politics of the whole affair, but will instead mention a few things that happened on "his watch" as MoT.
Most of the events under Slesers were on the "physical" transport side. Ryanair and Easyjet were brought to Riga, opening low cost travel to and from Latvia to new groups of people, from Latvian middle class families to boozy British bachelor party groups (they spend their money here, fine with that).
In telecommunications, Slesers was running the ministry when the third UMTS/GSM licence was auctioned to Bite Group. This has been a major stimulus to competition for mobile voice and data services. His time as minister also saw the implementation of number portability which has generated a "churn" of around 9000 mobile customers and 1000 fixed line users. With more than 1.8 million mobile and 600 000 fixed line users, this was less than trivial and had nothing to do with who was MoT.
Slesers seems to have a fairly competant team of professionals in the MoT under the Communications Department, who have their fingers on the pulse of most things. However, the market is mature enough to move ahead without much prodding from the government and we will see such things as very fast and affordable broadband, fast mobile internet, VOIP as the default voice platform for broadband users, IP TV, user-generated TV, HDTV etc. etc., all coming through a fast fixed or mobile link regardless of who is the new MoT. Rumor has it that the post may be filled until the elections in October by Latvian First Party (LPP)parliamentary whip Juris Lujans. That is, unless the LPP leaves the government and brings the whole shithouse down. But that is unlikely.

Lattelekom prepares to serve God (Latvian-size) as a customer

Lattelekom has purchased some Siemens DWDM equipment and will be installing it on its backbone network by mid-year. According to my source, this allows a throughput of 40 simultaneous 10 Gigabit data flows per optical strand. That is like 0.4 Terabit, and there are lots of strands in an optical cable. So I figure this is enough data capacity for Dieviņš, the kind little Latvian god who rides his horse without disturbing a tender blossom (fire and brimstone on a Judeo-Christian scale is a bandwidth hog). Anyway, the kind of capacity Lattelekom is putting on its carrier and, possibly, metro networks is enough for the data transmission needs of a small universe and its god. Like Dieviņš, who, after all, can offer around a million Latvian folksongs or dainas for downloading. Beat that iTunes!
But that is probably not what it will be used for, it is going to be there for the high capacity multimedia services the network will carry when Lattelekom a) finally kicks up the default DSL speed to around 10 Mps and starts pushing lots of TV, including customer-created content and HiDef channels down its IPTV network.
The Siemens equipment was purchased jointly with the half-mother TeliaSonera, which is also upgrading its backbone.
Now one just has to watch for Skandinieki, the Latvian pagan folk music group to be singing outside Lattelekom offices to know that Dieviņš has signed up as an enterprise data customer. And then another network upgrade will be necessary...:)

Tuesday, March 14, 2006

Which one is the biggest cretin?

I won't get into Latvia's latest political scandal, which is bizarre and rich in detail for black humor cynics. Suffice it to say that claims that GSM phone calls cannot be eavesdropped are false. The transcripts(disclosed by Latvian TV) of top Latvian politicians apparently talking openly about efforts to bribe a newly elected member of the Jurmala (a posh seaside Riga suburb) city council prove that GSM eavesdropping works.
A quick Google of "mobile encryption" reveals that finding this rocket-science technology isn't rocket science. I mean, if you are going to pull off a blatantly corrupt deal (sending two expendable f**kers to put EUR 20 000 in the pockets of a politican cooperating with the anti-corruption agency), either don't talk about it on your mobile or at least encrypt the calls or use code words. Apparently, the utterly depraved and equally fuckwit dumb Latvian political elite doesn't have the same common sense about such matters that any brain-burned crack dealer has in some American slum.
When it became apparent that the bribe had not worked, one former political honcho and eminence grise suggested electing deputies for their political opponents (who had now won the city council's election of a mayor) based in the criterion : which one is the biggest cretin?
I think we now know.
It should have been political suicide (at least), and in most civilized countries, it should have been jail, but this is Latvia and no heads will roll unless a miracle happens. But hey, this isn't a political blog...

Tuesday, March 07, 2006

The half-mother wants an IPO?

TeliaSonera honcho Kenneth Karlberg is reportedly meeting with Minister of Economics Krisjanis Karins March 8 and one issue they may discuss is the possibility of listing Lattelekom on the Riga Stock Exchange as a step that would facilitate a number of solutions to the seemingly endless effort by the Swedish half-mother to get majority control of both the fixed line operator and Latvian Mobile Telephone (LMT). All else failing, TeliaSonera will settle for LMT alone and that, as far as the otherwise intractable Latvian government goes, should be not problem.
There are several things to be gained from doing a Lattelekom IPO:

1) Both sides would get a market price/valuation for the company instead of spending money finding investment bankers who a) would value the company cheap for the buyer and b) dispute that valuation for the seller. At the end of the day, each would use some kind of analogy to a company that is already on the market, so why not go to the market directly?

2) The IPO could be done by diminishing, perhaps proportionally, the holdings of the existing stakeholders to create a pool of shares (Lattelekom would be converted from a Latvian limited company or SIA to a joint stock corporation or a/s) for the IPO. It could be in the range of 20 % or something. This would mean no one would have a clear majority, making one of the options below more attractive.

3) As in Estonia, where it now has just over 53 % of Eesti Telekom, the full mother of fixed line operator Elion and Estonian Mobile Telephone (EMT), TeliaSonera would buy shares on the market to get just over 50 % of Lattelekom. It would do so without the embarrassing attempt to woo minority shareholders that flopped with Eesti Telekom, although there is one version that I have heard that it was intended to show that TeliaSonera would not pay just any price for Eesti Telecom.

4) If TeliaSonera decided not to press ahead with a purchase of Lattelekom for whatever reason, a fair portion of the shares could be sold to a third party financial investor, such as a mutual fund or private equity fund interested in holding Lattelekom shares in its portfolio for their possible dividend flow or capital gains. This would provide an exit strategy for Lattelekom and also make an exit easier for the financial investor (who would not be getting 49 % of Lattelekom as the bedmate of the other slightly more than half -mother). Quite frankly, anyone who has been watching the situation can fairly conclude that, as far as what to do with Lattelekom, the Latvian government is basically totally batshit wacko... Deprived of 51 %, it could not make things worse either for the new investor or itself.

5) Finally, this arrangement would allow any of the shareholders to sell to a White Knight (anyone but TeliaSonera!!!) telco that would come in and buy most or all of Lattelekom, fulfilling the dreams of the Latvian government that someone reputable could be found to take a majority holding and usher in a new era of cut-throat competition in fixed network services. (Like what about the fact that more than twice as many people use mobile for voice, that there is a range of regional internet choices, some pretty good speeds for under LVL 10 per month, that there is practically free VOIP, like there is a competition problem? What planet has the government been visiting? See the batshit wacko remark above..)

Anyway, all this would be possible after an IPO. The idea is nothing new, by the way, the Riga Stock Exchange, when it was under different management, proposed as much in 2003, before
and the government had settled their arbitration dispute. The idea of giving Lattelekom to anyone but TeliaSonera can also be found in government position papers that fluttered into the hands of this blogger as the government of Einars Repse fell in the spring of 2004.

This was written while listening to the following tracks (not in this particular order):
Rage Against The Machine, Maggie's Farm (Dylan cover), U2 Vertigo, Grateful Dead, Sunshine (live), Jimi Hendrix, Sunshine of Your Love (Cream cover, live at Winterland). Eddie Grant, Electric Avenue, Green Day, American Idiot.
BTW there is something seriously fcuked with, keeps disconnecting.

Sunday, March 05, 2006

A new video blog attempt

I tried to do a video blog avoiding Google Video, which absolutely sucks. We'll see if this outfit, YouTube, is any worse...

We'll see.

Friday, March 03, 2006

Waiting for Monday and the whipping post

It looks like a certain newspaper will finally publish my story about Lattelekom and Golden Telecom, also giving the final version of the little bit of friction with the Swedes, on Monday. See the earlier post on No cow, no ice. There's also some talk that next week, the Public Utilities Regulatory Commission may get down to at least threatening to kick some ass among the many telecoms operators who have failed to report company data by the February 1 deadline. Reminder letters have been sent and widely ignored. Most of these are your Sharaskin & Sons outfits with a small number of customers, but there may also be a bigger fish about to be lashed to the whipping post. Well, not exactly a fish, a different creature.