Latvia, Markets and Companies, Technology, Telecomunications

He said that the government’s decision not to merge both companies is not the final decision, therefore "sooner or later both companies will merge".

"This is happening also in other European countries and for a reason – it is possible to cut costs, integrate services," said Boissin, adding that both companies have strong positions in the market, and they will become even stronger as a result of the merger.

As reported, Prime Minister of Latvia Maris Kucinskis (Greens/Farmers) and Telia Company President Johan Dennelind have signed a memorandum of understanding on Lattelecom and Latvijas Mobilais Telefons (LMT) telecommunication companies’ further development.

The prime minister’s representatives said that the memorandum cannot be considered an international agreement and it does not entail any legal consequences for any of the parties as the document essentially is a protocol of intent. It is a commitment to sit down at the negotiations table to work out a mutually agreeable strategy for further cooperation and development of Lattelecom and LMT.

Kucinskis indicated that such a memorandum was necessary to ensure a successful development of the telecommunication companies and cooperation between them also in the future.

By signing the memorandum, the parties pledge to work out a single Lattelecom and LMT strategy aimed at achieving synergy between the two companies as they phase in the next generation communication systems and strive for innovative excellence.

It has also been reported that the Latvian government decided in November 2017 not to back the plan to merge LMT and Lattelecom.

Scandinavia's Telia Company had warned the Latvian government that it could sell its shares in LMT and Lattelecom if the two companies are not merged.

Telia Group companies Sonera Holding and Telia Company own 49% of LMT shares altogether, while Latvian Radio and Television Center and Latvian Privatization Agency – 28%. Lattelecom, which belongs to Telia and the state of Latvia, owns 23% of LMT shares.

Telia Group company Tilts Communications owns 49% of Lattelecom shares, and Latvian Privatization Agency the other 51%.