Government to resurrect fourth licence tender in 2010

15 Jul 2010

Hungary’s new centre-right government has announced its plan to relaunch a tender for the country’s fourth mobile operating licence this year, in a process that could raise as much as HUF20 billion (USD91.5 million) for the struggling state’s coffers. Hopes of awarding the licence last year were torpedoed by the global financial crisis and ensuing recession in Hungary. TeleGeography’s GlobalComms Database notes that the National Communications Authority (NHH) launched the mobile tender in October 2008 in an attempt to introduce a fourth player in the domestic market, but abandoned it in March 2009 due to the deepening global financial crisis. At the time four groups – DreamCom Tavkozlesi, Digi, Mobinet Tavkozlesi Projekt and Invitel Tavkozlesi – submitted bids in the tender, and in early April 2009 all but Invitel submitted formal appeals to reverse the regulator’s decision. The appeals fell on deaf ears though with the NHH saying its decision to abandon the tender was based on the opinion that ‘since the announcement of the tender, both the domestic and the international economic environment have deteriorated significantly, which questions the financing conditions and [investment] return projections of the bids.’

The new government now hopes the situation has improved sufficiently enough to try again and believes the new frequency could attract a new operator and/or offer existing operators more spectrum to provide services in the mobile internet segment. Local press sources point out that the money that could be raised from the proposed tender represents a significant chunk of the government’s overall forecasted revenues, and is already in the government’s 2010 budget. Hungary is struggling to contend with its budget deficit and must keep it at 3.8% of GDP – as part of an agreement with international lenders who bailed it out in 2008.

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