Latvian mobile operator LMT’s President, Dr Juris Binde (pictured, second from right), has stated that price increases will be inevitable if a merger with fixed broadband provider Tet goes ahead—a move that has faced strong opposition from rivals concerned about its impact on market competition.
Speaking to Developing Telecoms at the 5G Techritory conference in Riga, Binde confirmed that “definitely there will be price increases because it will be the dominant operator” if the merger materialises. He justified the likely rise in costs, citing the need to manage rising energy expenses and attract top talent to “develop new solutions and services for continued growth.”
Binde also clarified that the integration of LMT and Tet would slow development plans temporarily, explaining, “A merger doesn’t mean you simply combine two companies and everything carries on smoothly. It’s a complex and costly process, which would slow down the economy of both companies, and impact the national economy too.”
Opposition to the Merger
Aruns Mickevics, Director-General of rival operator Bite Latvia, voiced strong criticism of the proposed merger last month, warning it could create a “monopolised giant” with “super dominance” in the market, according to Baltic News Network. Should the merger go ahead, Mickevics has called for the new entity to be separate from the state, with critical infrastructure divested from Tet and made accessible to all market players.
In response, Binde acknowledged that “some reshaping of the market” may be necessary to secure approval, addressing Mickevics’s suggestion of separating Tet’s fibre-optic network and data centres from its main business, noting, “these are strategic discussions for the state.”
Another potential option under consideration is for LMT to take on Tet’s customers in “overlapping” services, such as connectivity, television, IT, and smart home solutions.
Despite these hurdles, Binde remains optimistic, seeing the merger as ultimately beneficial for the Latvian telecoms sector. “The future is mobile only. Therefore, LMT is the leading company and must remain the leader,” he added.
Future Plans
Binde stressed that market consolidation is only worthwhile if it supports a growth strategy beyond traditional telecoms, pointing out that declining revenues from core services are a global trend in oversaturated markets. He argued that operators must pursue a “broader landscape of services and innovations based on telecom services.”
In line with this vision, LMT invested €24.4 million over the last nine months – a 22% year-on-year increase – in developing new services and expanding its 5G network. One innovation in progress is Seamless 5G Connectivity (pictured below) in the Baltic Sea, which includes providing 5G to the Port of Riga by installing base stations on ships and deploying aerial and aquatic drones to improve communication between vessels and port staff.
