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New state-owned mobile telco raises capital by HUF 14.1 bln

The owners of the new state-owned mobile telecom service company MPVI Mobil, established with registered capital of HUF 500 million in April, have raised the company's capital by HUF 14.1 billion through non-cash contribution, as is supported by company court data, the press department of MPVI Mobil said, confirming a report by business daily Világgazdaság on Friday.

MPVI now has registered capital of more than HUF 14.6 billion.

Company court data show the capital raise took effect early July.

MPVI Mobil, a consortium of postal company Magyar Posta, the Hungarian Electricity Works (MVM) and the Hungarian Development Bank (MFB), was announced the winner of the biggest block -- 5MHz -- offered in a mobile frequency auction by the media and communications authority in January.

Világgazdaság has learnt that Magyar Posta (holding 10%), MVM (45%) and MFB Invest (45%) made non-cash contributions in the form of rights representing assets in proportion to their holdings to MPVI.

In the case of Magyar Posta, this means that MPVI will be able to use the logistic fleet of Magyar Posta for advertising for fifteen years and collect subscribers at post offices.

The other two companies transferred frequency use rights to MPVI.

MPVI's future will also be influenced by a court decision expected to be taken on September 3 in respect of the new mobile telco's frequency use. The court is expected to decide on an earlier court ruling forbidding the company to start using the frequencies it won in January. The existing three mobile phone companies had contested the result of the auction at court.

Under the original tender invitation, the new mobile service provider is to launch its own service in Budapest by December 31, 2012, but industry observers doubt that the company will be able to build the necessary network by the end of this year.

The consortium that founded the company paid HUF 10bn for the frequency blocks won for the mobile phone service. As building the network could cost further tens of billions, the owners can be expected to have to carry out another capital raise soon if the court gives MPVI the green light.