Hungary issues two new tenders for mobile licences

Hungary has launched two 15-year mobile services tenders and a third tender for mobile infrastructure development, and will enforce a drop in mobile interconnection fees.

A Dow Jones report said one of the licences is for a 'full mobile service' in the 900/1800/2100 MHz frequency package. The winner will be obliged to provide the service to 35% of Hungary's population within three years.

The second licence is for the 450MHz frequency, which could boost broadband service availability for those without it. The winner will have to cover 30% of Hungary's geographical area within three years.

Hungary is selling the licenses, which may be extended for 7.5 years, for a fixed 100 million forints (€375,420) fee plus a minimum 0.75% of the annual net revenue of the new mobile service provider.

Although Hungary has a mobile penetration rate of 116%, some 20% of people still don't have a mobile phone. The market experienced fierce price competition in the past, but now competition has slowed and the market share of the three current mobile service providers has stagnated since 2006.

Hungary's incumbent mobile companies and firms owned by the Hungarian government are barred from applying for the new licences.

The incumbent providers are: T-Mobile, which is owned by Hungary's largest telecoms company by market share; Magyar Telekom (in which Deutsche Telekom has the controlling share)/Pannon, which is wholly owned by Norway's Telenor ASA; and Vodafone Hungary, owned by the UK's Vodafone Group.

The NHH also decided to require the incumbent mobile firms to reduce their interconnection fees by a total of 41% by December 2010, from the January 2009 level.

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