Latvia cannot afford an impasse in talks on the future of Tet and LMT - Valainis

RIGA - Latvia cannot afford to reach an impasse in talks with the Swedish Telia Company (Telia) on the future of the telecommunications company Tet and the mobile operator and technology innovation company Latvijas Mobilais Telefons (LMT), Economics Minister Viktors Valainis (Greens/Farmers) told TV3 this morning.

"We cannot afford a situation where we reach an impasse," the minister said, referring to the discussion on further scenarios in the talks with Tet and LMT's other shareholder, Telia, at a closed government meeting on Tuesday.

Valainis also noted that the negotiations had already succeeded in changing Telia's position and listening to Latvia's positions.

"I believe that this time, with such a consensus of the government on this issue and with our instruments, and I will not hide, these are instruments of strength, with which we are going into these talks, we will be able to reach the solution that is in the best interests of the Latvian state," Valainis said.

He noted that the current government has a fairly broad consensus on how the issue should be further addressed. "This is perhaps different from other times when there were quite different views among the political parties of the government on what should be done with these companies," Valainis added.

The minister also noted that Tet and LMT would not be able to remain competitive in their current form. "These companies, in the form they operate today, will not be able to compete with the global companies that are now entering the Latvian market," Valainis said.

As reported, the government at a sitting behind closed doors on Tuesday agreed on further scenarios for negotiations with Telia, a shareholder in Latvian tech companies Tet and LMT.

The government has outlined the future course of action to be discussed with Telia and has authorized the Economics Ministry to conduct these negotiations. In mid-October, the Economics Ministry is expected to report to the government on the outcome of the talks and propose the way forward.

The economics minister previously underlined that decreasing the role of the state in these companies has not been discussed. Proposals to sell something were declined and were not considered, the minister said.

At the same time, the minister did not rule out the possibility of a buy-back of the company's shares from Telia.

The state, through Public Asset Manager Possessor, owns 51 percent of Tet, while Telia's subsidiary Tilts Communications owns 49 percent of Tet. In LMT, on the other hand, Telia and its subsidiary Sonera Holding own a total of 49 percent, the Latvian state owns a total of 28 percent through the Latvian State Radio and Television Centrer (23 percent) and Possessor (5 percent), while Tet holds another 23 percent.

A complex management scheme for Tet and LMT has been set up in the past, which the two shareholders - the Latvian government and the Swedish company Telia - have so far been unable to agree on changing.