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Mobile Firms move to Next Generation

Hungary’s three mobile operators will not be joined on the saturated local market by a fourth operator, at least in the short term, as the National Telecommunications Authority (NHH) announced last week.

“The tender for Block D, reserved for new market entrants, was unsuccessful since the bidders could not be registered,” said NHH Chairman Daniel Pataki. He said that on Dec. 7, the NHH closed the procedure for three of the four frequency blocks offered in the UMTS (3G) mobile service tender invited on Aug. 31.

Monika Tabanyi, an analyst at Concorde Securities Rt, said the news there will be no fourth operator was in line with her expectations.

As of the BBJ going to press, T-Mobile Hungary Rt and Pannon GSM Rt had received their licenses, with Vodafone Hungary Rt left still to conclude its license agreement.

“Negotiations with Vodafone are still underway – I assume it will pay a similar fee to that T-Mobile and Pannon have paid,” said Taba nyi. Under the NHH ruling, T-Mobile made the best bid for Block A, while Pannon won Block C. Block B is expected to go to Vodafone.

Pannon is paying Ft 19 billion (€77.5 million), and T-Mobile Ft 17 billion for the 15-year licenses. In addition to its UMTS license, Pannon obtains a DCS (1800 MHz) frequency package. The first Ft 5.5 billion will be paid by both firms this year, with the rest paid in three installments in three years.

The price of the licenses was reasonable, opined Tabanyi. Based on UMTS license fees paid per inhabitant in the region, the total license fees to be paid by the three operators of around €200 million translate to around €20 per capita, she said.

“This is roughly half of what Polish operators paid four years ago, very similar to what Czech operators paid in 2001, and more than double the amount Croatian operators paid a couple of months ago for UMTS licenses,” she noted.

As a result of the tender, 3G mobile services can be launched in 2006 in Hungary, though limited coverage was earlier touted by operators for the end of 2005.

The entry of UMTS signals a third broadband internet access technology, in addition to fixed-line and cable TV access, the NHH said.

“Besides improving the quality of mobile calls, UMTS will greatly increase data transmission rates, and make internet-based multimedia services accessible via mobile,” it noted.

(BBJ 13.xii.04)

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