/Gundars Strautmanis, Latvian Chamber of Commerce and Industry (LCCI),  Chairman of the Board/

Due to substantial investments and knowledge, the telecommunication industry has significantly developed over the last 25 years. Today the most advanced services and technology, for the lowest prices in Europe, are available to Latvian citizens, however, we need to make sure that we would be able to enjoy the advantages of a highly developed telecommunications sector 10 years from now as well.

Although there are ten and even hundred active players in the Latvian market, LMT and Lattelecom are the absolute leaders in the industry. Another important thing is that Latvian government is a shareholder in both companies and they both have the same foreign shareholder TeliaSonera. 

The telecommunication industry has sharply developed all over the world from, which both have benefited the consumers and the shareholders. However, over the past few years the sector has encountered signs of stagnation. Today the reform of a unified digital market within Europe provides new challenges for maintaining and strengthening competitiveness in the industry. The sealing for vertical growth is almost reached and companies are searching for alternative sources of growth.

Providing new, innovative services and products, with a high added value, are the most noticeable trends all over the world in the telecommunication industry as well as the convergence of services and the integration of players within the industry to be able to provide a full spectra of services to their consumers. This phenomena is approved by the most recent M&A deals in Europe. Elion, the historical provider of fixed telecommunication services, merged with the mobile operator EMT last year in Estonia, as a result, a strong player in the market was created and healthy competition in the market was preserved. Latvia is one of the very few countries in Europe where one operator is not able to provide both fixed and mobile telecommunication services.

The leaders of the telecommunication industry in Latvia and their shareholders should seriously think about growth and development based on convergence and integration to maintain and grow the value of their enterprises. A timely strategy, which has all the necessary prerequisites, is required to do so.

Government has the opportunity to be an honorable owner by being farsighted when developing its strategy and not to just react to current events. The government and private shareholders should reach an agreement regarding the future business model of LMT and Lattelecom, so, both companies could sustain their position as the market leaders.

The Latvian market is becoming more open to the trends in the world and is more directly influenced by global competition. We already feel the direct impact of Google, Facebook, Apple and Samsung in the market, and we will feel it even more in the future. By implementing a united digital market in Europe the cross-border competition will only increase.

In these circumstances players within the market and the Latvian government, as the shareholder of the main market players, should be ready for the new challenges by consolidating their resources, implement synergies that would act as the foundation for integrated services and preserving competitiveness in the long-term. Furthermore, it would be a logical step for active participation in the capital markets.