Telia Latvia Acquired by Tet, New Telia Data Center Planned in Vilnius, Lithuania

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Telia Company has entered into an agreement to sell its 100 percent ownership in Telia Latvi for 10.75 million on a cash and debt free basis, representing a FY 2021e EV/EBITDA multiple of 10x. At the same time, Telia has announced its plans to invest 10 million euros in a new data center build in Vilnius, Lithuania.

Tet is a Latvian technology and entertainment company that provides a broad variety of ICT and pay-TV services, as well as power and other services, to individuals, enterprises, the government, and municipal institutions. Tet is owned by the Republic of Latvia (51%) represented by SIA Publisko aktīvu pārvaldītājs Possessor, as well as Tilts Communications A/S (49%), a wholly owned Telia Company entity. In addition to its minority stake in Tet, Telia Company also controls 60.3 percent of Latvian mobile operator LMT.

“Tet’s strategy is to accelerate growth via acquisitions, and we are very excited about the opportunity to acquire Telia Latvia,” said Uldis Tatarcuks, Chief Executive Officer (CEO) at Tet. “We believe our businesses complement each other, especially within our data center and transmission business. We look forward to welcome Telia Latvia and its employees to Tet and together develop the business to the benefit of our customers, employees and the Latvian society at large.”

Telia Latvia is a business-to-business telecom services company that was founded in 1992. The firm employs 46 people and provides solutions to major enterprises in Latvia in four service segments: telecoms, cloud services, data center solutions, and media solutions.

“We have run a competitive auction process for the sale of Telia Latvia during the autumn where a significant number of potential buyers were invited,” said Andreas Ekström, Telia Company Head of Latvia. “We are pleased that we have now reached an agreement with Tet who with this acquisition will strengthen its positions withing the enterprise segment with Telia Latvia’s network and technology assets and highly skilled employees. Latvia is a highly interesting ICT market and Telia Company remains committed to continue contributing to the digitalization of Latvia with our engagement in Tet and LMT.”

2-Hectare Land Plot

Telia already purchased a 2-hectare land plot near Vilnius, where it has planned to build its new data center.

At the beginning of 2022, Telia Lietuva took over the rights of ownership to the purchased 2-hectare land plot and aims to issue proposals for design and construction contractor works soon.

The new to be built data center at Raisteniks, which is close to the Vilnius-Panevys highway, will be directly connected to the other two Telia Lietuva data centers in Vilnius, resulting in one the region’s largest data center infrastructures. An increase in sales of Telia Lietuva’s IT services by more than 20 percent for several consecutive years dictated the need for the decision to build this new data center.

“A significant increase in the need for IT services for businesses and public sector organizations during the pandemic has become a part of a new, digital economy, which in turn led to our decision to build a new, modern and sustainable data center,” said Daniel Karpovič, Head of Enterprise at Telia Lietuva. “Having connected three data centers located in different parts of Vilnius into a single infrastructure, we will gain an even greater competitive advantage and will be able to offer our customers unique IT solutions and even more security. Moreover, the Raisteniškės data center will be modular, so we will be able to expand its capacity in the future, thus balancing the activities of other data centers.”

Mr. Karpovič claims that one of the major benefits of a greenfield data center investment is that the company does not have to adapt to existing conditions, allowing it to choose the best methods for ensuring the physical security of data and equipment, the reliability of the services provided, and the data center’s sustainability.

Data Center Expansion, Renovations

The fact that there are no physical barriers to the data center’s future development was also a factor in selecting the land parcel. Increasing the capacity of the modular data center by a few times would be easy.

The new data center, like Telia Lietuva’s previous data centers, will be connected to all main backbone Internet networks through a fiber-optic cable ring with two separate fiber-optic connections installed in distinct routes. This will enable the organization to provide DC services distributed through two remote certified Uptime Institute Tier III or equivalent data centers.

Telia Lietuva spent around 1 million euros in 2021 to refurbish its Žirmūnai data center and 2 million euros to expand and modernize their Naujoji Vilnia data center. In 2022, there are also plans to renovate and expand the company’s current data centers.

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