Hungary

[HU] Tender on Providing Third Generation Mobile Communications Services

IRIS 2004-9:1/23

Gabriella Cseh

Budapest

According to Article 69 Section 1 of Act C of 2003 on Electronic Communications (EHT), the right to use radio frequencies depends on the decision of the National Communications Authority Nemzeti Hírközlési Hatóság (NHH). As constituted in the EHT, the bidding process for licences concerning the third generation of mobile telecommunications (UMTS) is also one of the competencies of the NHH. UMTS will improve the quality of conventional mobile phone calls. Furthermore it will significantly increase the data transmission rate and thereby make Internet-based multimedia services available with mobile phones too.

It is the task of the NHH to establish procedural and other conditions for the tender concerning UMTS, e.g. providing equal professional support to the bidders. Accordingly, the NHH announced a public procurement procedure on 23 April 2004, aiming at the selection of an advisor to make preparations for the invitation to tender and provide professional support for the implementation of 3G services (UMTS) in Hungary.

On 31 August 2004, the NHH announced the tender concerning the right to utilise radio frequency bands available for the provision of third generation mobile communication services.

According to the NHH tender, four technically equivalent frequency blocks can be obtained for the provision of UMTS for a period of fifteen years. Based upon the requirements of the call for tenders, the NHH shall issue the relevant licenses in 2004, and the services shall be introduced into the market in January 2006.

In order to make the launch of UMTS possible, the Hungarian state decided to share the risk with the investors. Namely, according to the bidding, to keep the interests of the investors in mind, the winners of the frequency bands may pay the licence fee by instalments, in proportion to their revenues.