Telia to sell Latvian B2B business to Tet

Telia Company will retain an interest in Telia Latvia through its minority stake in buyer Tet and also retains 60.3% of mobile operator LMT.

Anne Morris, Contributing Editor, Light Reading

January 5, 2022

3 Min Read
Telia to sell Latvian B2B business to Tet

Telia Company, the Sweden-based operator with businesses throughout the Nordic and Baltic region, is selling off yet more of its assets as it continues to implement a strategy to reduce debt and return it to a positive financial performance.

After quitting Asia and selling 49% of its tower business in Finland and Norway to Brookfield and Alecta, Telia is now turning its attention to its operations in the Baltic States.

It has decided to sell 100% of B2B telecoms services provider Telia Latvia to Tet, which was known as Lattelecom before rebranding to Tet in April 2019.

Figure 1: Sign up: Telia Company will retain an interest in Telia Latvia through its minority stake in buyer Tet, and 60.3% of mobile operator LMT. (Source: Hakan Dahlstrom on Flickr CC2.0) Sign up: Telia Company will retain an interest in Telia Latvia through its minority stake in buyer Tet, and 60.3% of mobile operator LMT.
(Source: Håkan Dahlström on Flickr CC2.0)

Telia said the sales price for Telia Latvia "corresponds to an enterprise value of €10.75 million (US$12.2 million) on a cash and debt free basis."

However, Telia is not abandoning Latvia – far from it. Indeed, the group owns 49% of Tet via Tilts Communications, and will thus retain an interest in Telia Latvia. The other 51% of Tet is held by the Republic of Latvia (51%), represented by SIA Publisko aktīvu pārvaldītājs Possessor.

Furthermore, Telia still owns 60.3% of mobile operator Latvijas Mobilais Telefons (LMT), which in turn recently acquired 100% of the Baltic data transmission network and IT security solutions enterprise group Santa Monica Networks from Livonia Partners at a price of €36 million ($40.7 million).

LMT is also pursuing 5G ambitions. It acquired spectrum in the country's 700MHz spectrum auction last December, and installed 100 5G basestations in 2021. It has also developed a 5G router with technology company MikroTik, and said the first LMT customers in Ādaži started using 5G home Internet services in spring last year.

In the third quarter of 2021, net sales in Latvia increased 3.8% to 632 million Swedish kronor (US$70 million) while adjusted EBITDA grew 3.5% to SEK211 million ($23 million). The number of mobile subscriptions increased by 11,000 in the quarter, in part owing to the addition of 5,000 postpaid M2M subscriptions, and now stands at over 1.33 million.

Trimming debt

It seems that the sale of the Latvian B2B business represents more of a repositioning effort for Telia, while also helping to trim group debt. At the end of September 2021, Telia's net debt stood at SEK66.4 billion ($7.3 billion), down from SEK69.22 billion at the end of the second quarter. The net debt/adjusted EBITDA ratio was 2.24x.

Want to know more? Sign up to get our dedicated newsletters direct to your inbox

As well as Sweden and Latvia, Telia is now present in Denmark, Estonia, Finland, Lithuania and Norway. The group has been engaged in restructuring itself in recent years, selling infrastructure and business units in central Asia as well as Telia Carrier to reduce debt and place it on a firmer financial footing.

Allison Kirkby, a Scandinavian telecoms industry veteran, took over as CEO in May 2020 and has been attempting to steady the ship despite ongoing headwinds. It still remains to be seen if her new strategy, full of themes such as "Reinvent a Better Telia" and "Connect Everyone," will revive the fortunes of the debt-laden operator.

Related posts:

— Anne Morris, contributing editor, special to Light Reading

Read more about:


About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like