Ministry confident of awarding 3G licences in 2004

10 Nov 2003

Hungary is keen to launch a tender for third-generation mobile phone licences as early as the start of 2004, and hopes to award licences by the mid-year to dovetail with the country’s accession to the European Union. According to Kalman Kovacs, the Minister for Information and Telecommunications, the government is due to adopt a new IT strategy in the coming weeks, although the matter of how many licences to issue has yet to be decided. Nonetheless Mr Kovacs is confident that Hungary ‘will issue the tender at the beginning of next year, and a decision would come by mid-year’. The development will no doubt be met cooly by the country’s incumbent cellcos – Westel Mobile, Pannon and Vodafone – which believe the market is not ready for 3G services. The head of Pannon GSM is on record as saying that the value of UMTS in Hungary is ‘close to zero’.

Hungary’s comparatively weak GDP and generally poor wages mean that data-based mobile internet services are beyond the reach of the average man in the street. As a result, the prospects for a smooth transition to 2.5G and 3G networks are somewhat less than good given that, to date, the market has been built on the strength of inexpensive voice services rather than data. The lack of interest in UMTS licences is a clear sign that 2G and interim data-based technologies have much to do before 3G becomes a possibility. As if to back this up, Vodafone has said it would not be happy with a 3G tender as investment in its present infrastructure has not yet yielded a profit, making it more prudent to wait for a return on current investments rather than plough on into next-generation services.

Hungary