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Sunday 22.04.2018 | Name days: Armanda, Armands
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Expert: Lattelecom and LMT not to increase in value

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Girts Rungainis

Girts Rungainis

The current development tendencies in telecommunications markets do not suggest public shares in Lattelecom and Latvijas Mobilais telefons (LMT) will increase in value, exceeding the price proposed in 2007, economy expert Ģirts Rungainis told the business news portal BNN.

The expert believes LMT will not increase in value due to various reasons. Firstly, there is growing competition in this sector and the company’s liquidity is dropping. Secondly, near future will require huge investments in new technologies, namely 4G, introduction, Thirdly, the population of Latvia is shrinking significantly. The demography reports negative tendencies, people are leaving Latvia and the purchasing power of the existing clients is declining.

Before the crisis there was a euphoric vision around the deal, while now LMT price might drop. I see no arguments why it should grow, Rungainis says.

Regarding Lattelecom, it is more or less the same. Revenue from fixed dialing is shrinking, because people tend to opt for mobile phones and the Internet. Internet services and interactive television packages are developing.

The expert believes it is not the best solution to sell Lattelecom and LMT to Nordic telecommunications giant TeliaSonera, because in that case the company would have too big impact on the Latvian telecommunications market. It would be much better to sell only LMT shares and turn Lattlelecom into a national champion – a kind of a center for technologies development. Rungainis stresses Lattelecom could become Latvian Nokia.

Business news portal BNN already reported, the Economy Minister Artis Kampars announced this is a good time to sell public shares in Lattelecom in LMT.

While the Prime Minister of Latvia Valdis Dombrovskis pointed out privatization of these companies will be discussed only if the price offered is not lower than proposed three years ago.


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