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Hungary delays 3G mobile phone permit sale on lack of interest

Hungary won't offer the last available license to build and operate a high-speed mobile phone network this year after companies failed to show interest.

“I don't hear too much banging on our door,” Daniel Pataki, head of the country's phone regulator, said in a briefing in Budapest today. “If I get a call from Orange or Telefonica tomorrow, naturally, we'll call an auction right away. There's no use in offering until then.” A new entrant would compete with the local units of Vodafone Group Plc, Telenor ASA's Pannon GSM Zrt and T-Mobile Magyarország Zrt, a unit of Deutsche Telekom AG's Magyar Telekom Nyrt.

The three companies in 2004 paid a combined Ft 52.5 billion ($270 million) for their 15-year licenses. Hungary at the time agreed to hold on to the fourth license for at least two years after TDC A/S, Denmark's largest phone company, and Tele2 AB, Sweden's second-largest operator unsuccessfully bid for it. The three 2004 winners already had digital phone services based on the global system for mobile communications or GSM.

Since the sale of the three licenses in December 2004, mobile phone use rose to 98.9% in January from 86.4%. Magyar Telekom Chief Executive Christopher Mattheisen on March 12 said he expects Hungarians to cut back spending on telecommunications as the government's austerity measures sap disposable incomes. (Bloomberg)