Hungary Awards 3G Mobile License To Pannon GSM, T-Mobile"

BUDAPEST -(Dow Jones)- Hungary Wednesday awarded third-generation mobile-telecommunication service licenses to two of its mobile incumbents, Pannon GSM Rt. and to T-Mobile Hungary Rt., national telecom authority NHH President Daniel Pataki said.

Two other bidders, TDC A/S (TLD) of Denmark and Tele2 of Sweden, are out of the race for the remaining two licenses because they failed to meet bidding conditions, Pataki said.

NHH is still in talks with Vodafone Hungary on a 3G license.

T-Mobile Hungary is owned by Hungary's largest telecom company, Matav Rt. (MTA), which is majority owned by Deutsche Telekom AG (DT). Pannon GSM Tavkozlesi Rt. is 100% owned by Norway's Telenor ASA (TELN). Vodafone Hungary Rt. is a unit of British mobile-phone company Vodafone Group PLC (VOD).

Pannon GSM will pay 19 billion forints ($1=HUF183.82) and T-Mobile Hungary HUF17 billion, excluding value-added tax, for the 15-year license. The minimum price for each license the country was expecting to receive in this year's budget was HUF5.5 billion.

The companies will pay HUF5.5 billion this year and the remainder of the purchase price in three installments over the next three years.

Price is likely to be the main item in the unfinished talks between NHH and Hungary.

"The price paid for two licenses now have been made public," Pataki added at a press conference. "We hope to agree with Vodafone within a week on a fair value for the third license."

The winners are to start their Universal Mobile Telephony System, or UMTS, services Jan. 1, 2006.

Hungary will wait for the launch of the service before re-inviting bids for the fourth license, said telecommunications minister Kalman Kovacs, who was also present at the press briefing.

Tele2 and TDC failed to submit the necessary bank guarantees for the minimum bid amount of HUF5.5 billion, Pataki said.

The bank guarantee wasn't "just a piece of paper," the NHH president added. "It was to prove the commitment of the bidders." Pataki said the guarantee didn't arrive, even after consultations, and according to a government decree they had no choice but to take the action they did.

The high amounts the winners were willing to pay for the licenses reflect the Hungarian market's value, Katona said, citing Romania's recent 3G mobile license offer, where the licenses were sold for only $35 million each.

-By Margit Feher, Dow Jones Newswires; +361-267-0622; margit.feher@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 7th December 2004