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Tesco, Vodafone units in Hungary establish mobile virtual network operator

The Hungarian units of the UK's Vodafone and Tesco on Wednesday announced the establishment of a joint venture called Tesco Mobile.

Tesco Mobile will be a mobile virtual network operator, paying to use Vodafone's network to offer mobile telephone and internet services to subscribers.

The 50-50% JV is expected to launch services in the first half of 2012, said Vodafone Magyarország chairman-CEO György Beck and Tesco Global Áruházak CEO Gerry Gray.

Tesco Mobile numbers will have a new prefix, Beck said, answering a question. The number will depend on the market regulator, he added.

Gray said it was hoped Tesco Mobile would increase the number of Tesco Club card holders and bring more people to Tesco stores.

There are 1.3m Tesco Club card holders and about 3.5m shoppers visit Tesco store in Hungary a week. Tesco Club card holders account for about 60% of the stores' turnover, but there is room for growth as the proportion is higher in many other countries, Gray said.

Beck called the Tesco Club card Tesco Mobile's "secret weapon".

Answering a question, Beck said Vodafone Magyarország’s cooperation with the state-owned Hungarian postal company Magyar Posta, different from the one with Tesco, did not generate the hoped for results, although the Postafone service does have subscribers.

Asked about the "crisis tax" levied on the telco sector, Beck repeated what Vodafone said earlier, that the company understands the difficult economic situation of Hungary and the necessity of the crisis tax. However, he called it a "sore point" that the crisis taxes were only levied on some sectors and expressed hope they would not be in place for the long term. In spite of the extra burden, Vodafone Magyarország is continuing to invest in Hungary, he added.

Vodafone will complete a network development in the summer of 2012 resulting in 99% voice and broadband mobile internet coverage, Beck said.