GVH inquiry seen having little impact on MTel shares


An inquiry launched by Hungaryʼs Competition Office (GVH) concerning suspected collusion in tenders between telcos Magyar Telekom (MTel) and Telenor Hungary should only have marginal effects on MTelʼs share price, reported business daily Világgazdaság  on Monday, citing analysts.   

Dániel Tunkli, a senior analyst at Concorde Securities, noted that investigations by the GVH normally last six months; however, the office has the option to extend the deadline twice, which means it could take one and a half years to complete the process. The effects of the probe depend on whether the GVH imposes a fine, he added.

András Nagy, an analyst with Erste Investment, told the paper that the tenders in question were not cheap in international comparison, which would suggest there was no collusion. MTel is also denying any charges and fully cooperating with the GVH, which makes deliberate collusion even more improbable, he added.

Nagy said that at such a large company it is standard that from time to time the competition office launches an investigation. In its last case, MTel received a HUF 700 million fine, which had a less than HUF 1 effect on the share price of the company, he noted. The analyst calculated that a HUF 1 billion fine could likewise lower the MTel share price by HUF 1.

To date the largest fine the GVH has ever issued was HUF 9 bln, and this was spread out among several players in the banking sector. MTel is not making provisions because of the investigation, so its earnings should be unaffected at the moment, the analyst said.

The GVH said last week that it suspects the two telcos colluded in tenders for broadband spectrum licenses. Magyar Telekom and Telenor Hungary separately told state news agency MTI that they are cooperating with the GVH, insisting they had not violated any rules.


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