Are you sure?

New frequency fee system offers mobile companies incentives to make developments

Hungary's new frequency fee system gives mobile service providers an incentive to make investments and is advantageous to consumers too, National Media and Telecommunications Authority (NMHH) head Annamaria Szalai said at a press conference on Monday.

The earlier fee system did not give mobile companies any incentive to make developments in low-turnover areas, but the new system does, offering service providers discounts of 50% for four years for some investments, Szalai said.

The fee system is complicated, but it is expected to be advantageous to consumers in the long term as it makes things more predictable for service providers, she said.

Service providers have paid the frequency fee till now based on the number of base stations, which created a disincentive for building new ones. Under the new fee system, mobile companies pay an appropriate amount for their frequencies which creates an incentive for building base stations.

The new fee system proves that the NMHH is able to act flexibly and more quickly to new developments, Ms Szalai said.

The decree on the new fee system is part of something bigger, and it was not created to generate new revenue for the state, said NMHH deputy head Gabor Matrai. Rather it supports the use and sale of frequencies, he added.

Magyar Telekom chairman-CEO Christopher Mattheisen acknowledged that the new fee system offers incentives for investments and could boost internet coverage from 75% to 100%.

Telenor Magyarorszag CEO Christopher Laska said the new fee system would give mobile service providers the confidence to make investments.

Vodafone Magyarorszag deputy-CEO Pal Marchhart said frequency fees will edge down because of the new system, but the important thing is that the new system removes a serious obstacle on the path of development. Frequency fees will drop only marginally but the new system will prevent them growing, he said, adding that the fees in Hungary are about double the EU average.

The decree on the new fee system was published in the March 31 issue of official gazette Magyar Kozlony.

The NMHH expects more work after the National Development Ministry takes a decision on the framework for the sale of frequencies in the 900MHz band,  Matrai said. NMHH is prepared for a tender or an auction, and hopes a decision on the matter can be taken by the end of June, allowing the sale to proceed, he added.

Matrai said Hungary's switch from analogue to digital television broadcasting would free up analogue frequencies that can be used for mobile internet.