Home arrow Jan - Mar 2009 arrow UMTS Frequencies Arouse Great Interest in Hungary
UMTS Frequencies Arouse Great Interest in Hungary
http://www.nhh.hu

More applications were received than anticipated for the tenders put out to boost competition on the mobile telephone market and to increase broadband internet coverage – the National Communications Authority of Hungary (NHH) announced.

By the deadline, four bids in total were received for bundle ‘A’ – which allows a fourth GSM/UMTS service provider to enter the market –, which exceeded former expectations. The tenders were submitted by Digi Kft, Dream Com Távközlési Kft., Invitel Távközlési Zrt. and Mobinet Távközlési Projekt Kft.

The deadline for the submission of applications for the 450 Mhz, so-called bundle ‘B’ two companies submitted their bids, Digi Kft. and Mobil Wireless Broadband Hungary Zrt. In case the tender proves to be successful, the services of the winner will primarily improve the wireless broadband coverage of sparsely populated areas and municipalities. According to the invitation, incumbent mobile operators and enterprises belonging to the same company group, companies directly or indirectly owned by the Hungarian state and service providers with spectrum usage rights for the 3.5 GHz frequency were not eligible for bidding.
With this tender the NHH opened up the 26 GHz frequency range, for which the Authority announced five frequency bundles altogether for bidding. This frequency range will play an important role in the development of the internal infrastructure of future winners, and could contribute to the significant increase of wireless broadband coverage in Hungary.

According to the invitation, among the 26 GHz frequency bundles ‘C’ awaited applications submitted together by the bidders for bundle ‘A’ and mobile operators already on the market. Bundle ‘C’ will be awarded only to a consortium one member of which has won the tender for bundle ‘A’. Invitel Távközlési Zrt. and Vodafone Magyarország Zrt. were the applicants to submit a joint bid on Friday for bundle ‘C’.

At the end of November, two 26 GHz frequency bundles (‘D’ and ‘E’) were also made available for bidding. Out of these, bundle ‘D’, for which tenders were invited from any company without any restrictions, one application was received from Magyar Telekom. Bundle ‘E’ was open for bidding to all companies except incumbent mobile service providers, an opportunity grasped by Antenna Hungária Zrt. and GTS Datanet Távközlési Kft.

The NHH reserved a 26 GHz frequency bundle (‘F’ and ‘G’) for the bidders for bundles ‘A’ and ‘B’ – that is, for each of the future winners of the bundles. Similarly to bundles ‘A’ and ‘C’, these could be applied for until 12 December. Invitel Távközlési Zrt., Mobil Wireless Broadband Hungary Zrt. and Mobinet Távközlési Projekt Kft. all entered bids for both bundle ‘F’ and bundle ‘G’.

The NHH registered the companies applying to the ’A’, ’B’, ’D’ and ’F’  bundles, after checking their compliance with the formal requirements.
The emergence of new service providers and the concurrent opening up of the 26 GHz frequency range could stimulate competition on the mobile and broadband internet market to a significant degree and improve internet coverage in the disadvantaged regions of the country, hence in sparsely populated municipalities – Dániel Pataki, President of the NHH explained upon announcement of the tenders.

October data show that there are 117.8 mobile subscriptions for every 100 persons and there are some 40 broadband internet subscriptions for every 100 households in Hungary. The ratio of ADSL and cable modem internet access is getting increasingly even, while both domestic and European experience suggests that in the future wireless solutions that also offer mobility will play an ever increasing role in the broadband market.

According to the NHH, competition on the mobile market lost some impetus in recent years, while there are great opportunities in the field of wireless internet – that is why there is a need and the possibility to involve new market players through the tendering of the available frequency bundles.
 
The invitation was built on the joint risk-taking of the state and the service provider, meaning that the NHH set a low entry threshold under strict conditions for guarantee, and bidders are primarily expected to undertake payments against their sales revenues earned during the period of the frequency usage rights.
In the case of successful bids, winners of bundles ‘A’ and ‘B’ will be granted frequency usage rights for 15 years, and winners of bundles ‘C-G’ will enjoy such rights for a period of 10 years.

The main elements of and the bidders for the GSM-DCS-UMTS and the 450 MHz tenders


Bundles 

‘A’

‘B’

Frequency 

900/1800/2100 MHz 

450 MHz

Deadline for submission 

12/12/2008

28/12/2008

Bidders

- Digi Kft
- Dream Com Távközlési Kft.
- Invitel Távközlési Zrt.
- Mobinet Távközlési Projekt Kft. 

- Digi Kft.
- Mobil Wireless Broadband Hungary Zrt.

Frequency use authorisation

15 + 7.5 years

Who can not apply?
Exclusions: 

Company under direct or indirect state ownership
Incumbent mobile operator or company in the same company group
Cross-ownership between applicant ‘A’ and ‘B’

Minimum obligations

Start up of service within 2 years,
35% residential coverage within 3 years 

Start up of service within 1 year,
30% territorial coverage
within 3 years

Minimum fee

HUF 100 million
+ at least 0.75% of annual  net revenue

Evaluation criteria

Revenue-proportionate fee: 60 points
Coverage and service start up obligation: 20 points
Experience: 10 points
Business plan: 10 points

The main elements of and the bidders for the 26 GHz tender


Bundles

‘C’

‘D’

 
‘E’

‘F’

‘G’

Bandwidth

112 MHz

84 MHz

56 Mhz

56 MHz

112 Mhz

Deadline for submission

12/12/2008

28/11/2008

28/11/2008

12/12/2008

Bidders

Invitel Távközlési Zrt. and Vodafone Magyarország Zrt.

Magyar Telekom Nyrt.

- Antenna Hungária Zrt.
- GTS Datanet Távközlési Kft. 

- Invitel Távközlési Zrt.
- Mobil Wireless Broadband Hungary Zrt.
- Mobinet Távközlési Projekt Kft.
 

- Invitel Távközlési Zrt.
- Mobil Wireless Broadband Hungary Zrt.
- Mobinet Távközlési Projekt Kft.

Potential winners

Incumbent mobile operator  with winner of package ‘A‘

Anyone

Anyone with the exception of incumbent mobile operators

Winners of tenders ‘A’ and ‘B’

Minimum fee

-

HUF 500 million

HUF 100 million

Frequency use authorisation

10 + 5 years

Evaluation criteria

 
Fixed fee: 90 points
Business plan and background: 10 points