Overview of development : After a brief period of independence between the two World Wars, Latvia was annexed by the USSR in 1940. It reestablished its independence in 1991 following the breakup of the Soviet Union. Although the last Russian troops left in 1994, the status of the Russian minority (some 30% of the population) remains of concern to Moscow. Latvia continues to revamp its economy for eventual integration into various Western European political and economic institutions1.

 

 

A brief chronological outline (from Contreras & Kasemaa 2001): ²

 1991

Latvia regained its independence and started building a liberal market economy. Lattelekom was established as a state enterprise to overtake Latvia’s telecommunications system from the former Soviet Union. There were at the time a few telephone lines to Moscow and the queuing time for international calls was enormous – days 69 At the end of the year, the Latvian state signed a co-operation agreement to develop the telecommunications market with Telia.

 1992

Latvian Mobile Telephony Company (LMT) was established. NMT 450 standard was introduced with little initial investments and utilising second hand base stations 70 . It had some problems to get independent from Finland in the beginning with high price service and just few users - close to 1.000 till 1994 approximately 71 .

 1993

Law on Telecommunications was passed (before there was no regulation), the Telecom Tariff Council was formed and there was a tender for a strategic partner for Lattelekom. The requirements at the time included the provision of a full digital service by the end of 1996 (which has not been fulfilled yet). The idea behind the privatization was to improve results, services and the company’s outdated equipment. The international country code 371 was allocated allowing international calls to be transfer through the exchange in Stockholm.

 

 1994

Lattelekom venture was formed: 49% Tilts Communications (90% Sonera and 10% IFC) and 51% Latvian government. The new company was granted a monopoly status for 20 years until the year 2013. The 1^st international switch was set in place.

 1995

LMT introduced the mobile telephone standard GSM 900.

 

 1996

Baltkom GSM got the 2 nd GSM 900 license in a bidding process were five groups submitted their offers.

 1997

Baltkom GSM started its operations. At the time just 20% of the market was digital. LMT had close to 40.000 and Lattelekom 70.000 subscribers 72 . Baltkom introduced the prepaid services to the market.

 

1998

Latvia became Associate Member of the EU and joined the WTO in early 1999. With these agreements, the government accepted new telecom sector policies with packages of goals to beachieved before the year 2003. The second international switch was installed. In December, Baltkom introduced the prepaid services to the market.

 

1999

Frequency 1800 Mhz was granted to both mobile telephone operators: LMT and Baltkom GSM.

 

2000

LMT introduced prepaid and WAP services to the market

 

2001

There will be a tender process (auction) for the third GSM operator license According to the press (information as of November 2000)73 , this license will include the UMTS as well.

 

2003 or 2013

There will be a fully liberalized telecommunications market depending on the negotiations between the government and Lattelekom owners, to finish the exclusive rights agreement before the initially set 20 years period.

 

Last updated December 13, 2001