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Five bid for 3G licence

3 Nov 2004

Five companies have entered Hungary’s 3G licence auction, including two non-domestic operators – Denmark-based TDC, which is bidding through its subsidiary HTCC, and Sweden’s Tele2 through its newly established Hungarian unit. The newcomers will compete with local cellcos T-Mobile (formerly Westel Mobile), Pannon GSM and Vodafone Hungary. There are four 15-year 3G concessions up for sale in the country, and the winners will be required to pay an initial instalment of HUF5.5 billion by the end of this year. Licensees must roll out the service in metropolitan Budapest by January 2006, and have achieved coverage of 30% of the country’s population by the start of 2008. The regulator, the National Communications Authority, or Hirkölési Föfelügyeled (HIF), is expected to reveal within the next few days which of the bids are valid, and will announce the results of the auction on 1 December.

The government first planned to auction 3G concessions in December 2001, but in September 2002 postponed the process indefinitely after concluding that neither phone companies nor consumers were prepared for next-generation services. In November 2003 however, it changed its mind, saying it was keen to launch a tender at the start of 2004, and hoped to award licences by the mid-year to dovetail with the country’s accession to the European Union. But the announcement was met coolly by the incumbent cellcos and in December the government revised its plans once more, stating that it would not begin the process until the final quarter of 2004.

The Hungarian government is keen to get 3G services up and running, not least because the 2G services market is quickly approaching saturation. At the end of September 2004 there were 7.82 million mobile subscribers, a cellular penetration rate of 76.9%. Of the total, T-Mobile claimed 3.9 million, Pannon GSM had 2.6 million and Vodafone claimed 1.3 million.

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