OREANDA-NEWS. A €10 million equity investment by the EBRD in Lithuanian mobile phone provider Bite helped the company revitalise its activities in Latvia and is an excellent example of the Bank's help for innovative companies in the Baltic states.

Thanks to the 2009 investment made alongside Emerging Europe Convergence Fund II, an EBRD-supported private equity fund managed by Mid Europa Partners, Bite entered the Latvian market, dominated by two strong competitors, as a third big player with the explicit aim of increasing competition.

“Bite” means “bumble bee” in Lithuanian and Latvian and - as busy as the fuzzy counterpart pollinates a flower field - this young and dynamic enterprise has acquired new customers in the Baltic states.

Through its experience of operating in Lithuania, Bite has become a leader in technology and innovation, forcing competitors to up their game first in Lithuania and now also in Latvia.

“Baltic mobile phone users have benefited from this trend in the market: prices have dropped and the average revenue per user has more than halved from €21 to €9 since 2007,” said Viesturs Bernans, Principal Banker in the EBRD's Vilnius office.

“The charges for mobile calls are among the lowest in Europe and increased competitive pressure among the providers was one of the main reasons for this development.”

However, it was not just the price but the quality of services that improved in the Latvian telecommunications sector.

Bite's customers are able to control their costs and data allowance in real time, they can switch providers whenever they wish (no locked-in contracts) and benefit from personalised customer support in both countries 24 hours a day, explained Nikita Sergienko, Bite's Chief Financial Officer.

“Our main strategy is that we are challenging some of the industry's bad practices and take better care of our clients than our competitors,” he added.

“Our customer-centred approach is highly appreciated by mobile phone users. This helped us quickly establish our presence and become number three in the Latvian market.”

With an average of 1.5 mobile phones per citizen in Lithuania and 1.2 in Latvia, customers have become increasingly picky and are looking more than ever for good value for money, much to the advantage of Bite.

Most commercial and residential clients switching providers chose to take their phone numbers over to the company since it expanded to Latvia.

At the same time, Bite provides similarly good care and innovative services to its 650 employees. Among them are flexible working hours, an active mobility programme and, most importantly, on-site child care at HQ.

A full-time nanny supervises employees' kids from two to 15 years during the working day - no matter whether it is educational games for the younger ones or practical help with their homework for teenagers.

The EBRD's investment into Bite came at a time when the Baltic states were facing some of the most severe GDP contractions in Europe as a result of the global financial crisis in 2008-09. Many other lenders were therefore hesitant about supporting companies in the three countries.

“This investment in neighbouring Latvia provided the company with a great opportunity to expand,” said Matti Hyyrynen, Head of the EBRD's Vilnius office.

“There are many Baltic enterprises that present excellent business opportunities and further potential for growth. Financing Baltic companies' cross-border investments is how the EBRD can support their expansion outside their fairly small domestic markets.”