A fourth operator is to join the Hungarian mobile market.
IHS Global Insight Perspective | |
Significance | The Hungarian regulator has announced the results of the auction of frequencies in the 900-MHz band. |
Implications | The newly licensed operator is a consortium of state-owned players. |
Outlook | The auction will see service quality improve for the existing players and, with Hungary due to liberalise its 900-MHz band, mobile broadband services will be boosted in the future. |
The Hungarian 900-MHz auction has concluded with the regulator receiving bids totalling 43.9 billion forints (USD197 million). The consortium, including national postal company Magyar Posta, won the "A" block with its bid of HUF10 billion, which grants a 5-MHz block. Hungary's three existing operators won spectrum in the "B" block: Vodafone bid HUF15.7 billion; Magyar Telekom offered HUF10.9 billion; and Telenor offered HUF7.3 billion (see Hungary: 12 December 2011: Six Companies Bid for 900-MHz Spectrum in Hungary).
Outlook and Implications
- Spectrum Allocations: Vodafone and Magyar Telekom both won two blocks of 1-MHz spectrum. Telenor's lower bid saw it receive one block of 1-MHz spectrum and the "C" block corresponding to a 0.8-MHz allocation. In addition to the 900-MHz licence, the Magyar Posta-led consortium will have access to three blocks of 1,800 MHz and a further three blocks in the 2,100-MHz band.
- Challenger Approaches: The auction will see a fourth player enter the market. The consortium is constituted of energy firm MVM Zrt and bank MFB Zrt, which hold 45% stakes each, with the national postal company with a 10% share. Magyar Posta currently operates as a mobile virtual network operator (MVNO) on Vodafone's network. The three firms in the consortium are state-owned, but operate independently of the regulator, thus do not breach European Union (EU) rules on competition. With a full licence, Magyar Posta will migrate its 10,000-strong customer base from its MVNO operations to its own network once deployment commences. RCS&RDS and Viettel were interested in bidding for the licence, but were eventually excluded. RCS&RDS's bid failed to meet the minimum submission, while Viettel's registration contained several deficiencies that couldn't be corrected.
- Improvement to GSM/W-CDMA Coverage: The three existing operators will use the extra spectrum to improve service quality on their GSM coverage. Following pressure from the European Commission, Hungary is due to liberalise its 900-MHz band for W-CDMA services. This will improve coverage of mobile broadband services in rural areas as the lower frequency band creates larger cells. While the operators extend their 3G networks, leading mobile operator Magyar Telekom has launched its LTE network (see Hungary: 3 January 2012: Magyar Telekom Launches LTE Network). LTE services are available in around 40% of Budapest, with plans to cover the entire city by 2012. As spectrum in the 800-MHz or 2,600-MHz bands has yet to be liberalised, Magyar Telekom will be reusing spectrum in its 1,800-MHz allocation.