The award of 5G licences is proving to be a highly contentious issue in Hungary.
On March 26 the country’s National Media and Infocommunications Authority (NMHH) announced that it had organised an auction on that day for the 700, 2100 and 3600 MHz frequency bands. It was, in its words, “a scene of intense competition” and resulted in Magyar Telekom, Telenor Hungary and Vodafone Hungary purchasing usage rights for 15 years for a total of HUF128.5 billion (€360.4 million).
The regulator’s decision drew a quick response from Digi Communications, which claimed to have been excluded from the bidding process. The company put forward a number of points to argue its case and NMHH subsequently addressed them in a Q&A that appeared in the local publication Media1.
In its response, Digi Communications said that NMHH’s decision to finalise the tender in a fast track manner was “controversial and unfair” and also in defiance of the company’s legal action, taken after its participation in the auction was rejected in September 2019.
Digi also said that NMHH’s action was effectively blocking competition and “drastically reducing” the chances for consumers to purchase basic services at competitive prices. Furthermore, it argued that lack of competition as well as high price levels had already put Hungary in last place in the European mobile internet adoption rate.
Digi concluded by saying it was “even more determined to continue the legal procedure” and called on the regulator to cancel the auction decision and resume the process in a fair manner.
For its part, NMHH argued that Digi Communications violated the conditions for participating in the auction by submitting a bid itself rather than through its Hungarian subsidiary. It also denied that Hungary has the most expensive mobile internet in Europe and that the cost of services would be reduced if there was a fourth mobile provider.
NMHH in addition argued that on January 10 a court rejected Digi’s request to have the tender procedure suspended until the end of legal proceedings. Another request by Digi was subsequently rejected by the court on February 7. The regulator then held the auction in an express manner, taking into account the need to do so due to the economic damage being caused by the coronavirus pandemic.
Local industry sources have indicated to me that Digi Communications was probably in the right in submitting a bid itself rather through Digi Hungary as the two are separate legal entities. They were also of the view that NMHH’s decision to keep Digi out of the mobile market could be related to upcoming ownership changes at Telenor and cut-price policies Digi could implement should it be a market participant.
Whatever the truth is, this is a dispute that is unlikely to end any time soon.