US investor company Providence Equity Partners, as reported by its representative Una Ahuna-Ozola, has sent an official letter to Prime Minister Krišjānis Kariņš, raising alarm over the actions of the Public Utilities Commission (SPRK) «that indicates possible violation of the investment promotion and mutual protection agreement between the government of the US and the government of Latvia».
Providence Equity Partners LLC (PEP) is a specialist private capital investment association that focuses on media, communications, education, technology investments across North America and Europe.
In Latvia they own Bite Latvija mobile services operator.
PEP manages more than USD 30 million of investments. The company’s main headquarters is located in Rhode Island, US.
The US investor warns that because no solution was found in talks with the government, the possibility of suing the state of Latvia over delays with development of strategically important infrastructure. The association referenced the US-Latvian Investment Protection Agreement signed in 1995.
As the owner of Bite Latvija and its group company, electronic service provider Unistars and investor, this is the first time PEP has faced a violation of foreign investor rights despite established US-Latvian close diplomatic and economic relations, as well as strategic partnership in geopolitical affairs, as mentioned in the press-release.
«We are unpleasantly surprised that formal permission to share 3.6 gigahertz of critical frequency for 5G infrastructure for one of the group’s companies may have become the reason for discrimination of US investor’s rights in Latvia,» the statement cites Bite Group’s CEO Pranas Kuisis.
According to the investor the most worrying fact is that with such activities Latvia, by putting obstacles to an investor of a partnered country, basically sabotages development of its own strategic and critically important infrastructure while also denying the investor rights for investments. «It is no secret that development of 5G network is in the interest of the Latvian state and its residents,» stresses Kuisis.
Unistars uses radio frequency band received 20 years ago to introduce 5G technologies. Because Bite Group company already had the necessary 3.6 GH frequency critically important for 5G network, SPRK prohibited Bite Latvija from taking part in the 5G frequency auctions in 2017 and 2018. The 3.6 GH frequencies were auctioned off to two market players. The rules imposed for the auction by SPRK stated that a company that already has frequencies in the specific range are not allowed to participate in the auction.
Currently for Bite Latvija to be able to use Bite Group’s already held frequencies in 3.6 GH range necessary for the introduction of 5G technologies, the company requires permission from SPRK. For unknown reasons
the review of this matter has been extended for the third time.
«This not only negatively impacts Bite Latvija’s competitiveness before other market players, with one competitor partially owned by the Latvian state. This also breaches the agreement between the government of the US and the government of Latvia on investment promotion and mutual defence of 1995,» said Bite Grupa CEO.
The agreement also mentions that the state must not in any way to delay management, acquisition, expansion of sale of investments through arbitrary or discriminatory measures. This is why the multiple extensions by SPRK can be considered arbitrary and administrative obstacles, because the finding of obvious facts has been going on for five months, as noted in PEP statement.
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