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Telia hopeful of fixed-mobile convergence merger in Latvia

LattelecomTelia has welcomed a proposal to merge Latvian fixed-line telco Lattelecom and the leading Latvian mobile operator LMT from consultants KPMG, who were hired by the Latvian government to study strategic alternatives for the pair.

Swedish-Finnish telco Telia holds separate 49% stakes in both operators. Lattelecom itself holds a 23% stake in LMT. The Latvian government holds a 51% stake in Lattelecom and a 5% stake in LMT, with state-owned national broadcasting services provider LVRTC holding the remaining 23% of LMT.

Telia said it had not yet studied KPMG’s recommendations in detail after the Latvian government decided to publish the consultancy outfit’s report, and said it had yet to receive any concrete proposals from the government.

The group said it understood that the report recognised that the current structure was “not optimal” and included a recommendation to combine the two companies – something Telia has long called for.

Telia said that the combination of the two companies was “the only solution to ensure their sustainable future” and said it was ready to engage in dialogue with all stakeholders.

According to local reports, the KPMG Baltics report recommends that the two companies be integrated with the Latvian state and Telia each holding an equal number of shares in the combined entity and the balance being free-floated.

Latvian prime minister Māris Kučinskis was quoted by local press last week as saying that the government should retain control over the two companies and that it was important to be cautious in taking any decision on a merger. Kučinskis was reported as saying that KPMG had put forward eight possible solutions to the issue of how or whether the companies should be combined.