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UPDATE - State-run consortium bags biggest frequency block at auction

A consortium of state-owned Magyar Posta, the Hungarian Electricity Works (MVM) and a unit of the Hungarian Development Bank (MFB) has successfully bid for a 5MHz frequency block in the 900MHz band at auction, making it the fourth player on Hungary’s mobile telecommunications market, the National Media and Infocommunications Authority (NMHH) said on Tuesday.

The consortium bid HUF 10bn for the 5MHz block and attached ranges.

The three mobile telecommunications service providers until now, Magyar Telekom, Telenor Magyarorszag and Vodafone Magyarorszag, also won frequency blocks in the auction, NMHH said.

Bids at the auction came to HUF 43.9bn plus VAT, it added.

NMHH chief Janka Borcs Aranyos said the blocks went for high prices. She added that the auction had been designed to bring a new player to the mobile market and to see the country’s mobile internet network expanded as quickly as possible.

Deputy chief Peter Kollar said NMHH had not asked a higher price for the biggest frequency block because of the aim to bring a fourth player to the market. He added that the authority expected established players to pay more for their blocks.

He said the new service provider has until the end of the year to establish its network in the inner areas of the capital and until the end of 2014 to bring services to localities with 30,000 or more residents.

Mrs Aranyos said the entry of a state-owned player on the market did not contravene European Union rules, adding that these only require the market regulator to be entirely independent.

She said she had no official knowledge of any of the parties in the auction disputing the results.

Mr Kollar said the new service provider would offer roaming services until it creates its own network. He added that the roaming services would be established under market conditions.

NMHH announced the auction for the frequencies on August 4. It offered the 5MHz "A" frequency block at a starting price of net HUF 4bn. It offered 1MHz "B" frequency blocks at a starting price of HUF 700m apiece, and 0.8MHz "C" frequency blocks at a starting price of HUF 560m.

Magyar Telekom won 2 MHz of frequency in the band with a bid of HUF 10.92bn, Vodafone also won 2 MHz, bidding HUF 15.67bn, and Telenor won 1.8 MHz with a bid of HUF 7.29bn, NMHH said.

NMHH accepted the registrations of Magyar Telekom, Telenor Magyarorszag, Vodafone Magyarorszag and the consortium of Magyar Posta, MVM and MFB Invest, but it excluded a Romanian company and a Vietnamese company from bidding in the frequency auction because of shortfalls in their registrations to participate. Romania’s RCS and RDS failed to meet a requirement concerning market regulator fees and Viettel Group’s registration contained "several serious formal deficiencies that could not be corrected", the authority said.

Magyar Telekom told MTI it was reviewing further how to best use the new capacity for its clients with a view to genuine mobile broadband and 4G/LTE mobile internet services.

Vodafone’s press department told MTI said it would use the new frequency capacity to bring broadband mobile internet to communities where there is no broadband internet of any kind at present.

Telenor Magyarorszag said it would use the frequency, acquired at a "reasonable" price, for further developments.

Magyar Posta declined to comment on how the frequency would be used until the NMHH resolution on assigning the frequency takes legal effect.