Hungary changes spectrum fee structure to boost infrastructure investment

Changes to the fee structure for mobile spectrum use introduced at the beginning of this month will encourage Hungary's mobile operators to invest in more infrastructure, particularly in underserved areas, Annamaria Szalai, head of Hungary's National Media and Telecommunications Authority (NMHH) said this week.

Under the old system operators paid fees for the use of spectrum on the number of base stations, creating a clear disincentive associated with building new ones. Under the new fee system, which went into effect at the beginning of April, mobile companies will pay according to the frequencies they use. This provides a more incremental link between additional revenue and increased spectrum fees and, with the promise that operators will be required to pay only half of the fee for four years if they make "significant" investments.

According to the Budapest Business Journal, all three of the country's operators--Deutsche Telekom-owned Magyar Telekom, Telenor Magyarorszag and Vodafone Magyarorszag--welcomed the news both because it would bring down fees and primarily because it removes a disincentive to deploy more base stations that has been holding back 3G developments. Magyar Telekom CEO Christopher Mattheisen told the Budapest Business Journal that the new fee system offers incentives for investments and could boost mobile broadband coverage from 75 per cent to 100 percent.

Hungary had a mobile penetration rate of just under 120 per cent in February 2011, according to the NMHH. However, the number of active subscribers has been slowly but steadily falling and operators are looking to grow the market again with new data-orientated services.

For more:
- see this Bloomberg article
- see this Dow Jones Newswires article
- see this Budapest Business Journal article
- see this separate Budapest Business Journal article

Related Articles:
MVNOs in Eastern Europe fail to compete, with churn and QoS blamed
Hungary cuts mobile termination charges
Hungarian operator upgrades backhaul network