Budapest Metropolitan Court has annulled the results of the tender to establish Hungary’s fourth mobile phone operator, although the company has now been set up.
The rights for the frequency were won by a consortium of state-owned postal service Magyar Posta, state electricity company MVM and state-owned development bank MFB.
Of the three existing providers Magyar Telekom (MT) announced in March that it would go to court to try to overturn the National Media Authority’s (NMHH) decision to reject an appeal filed by all three providers. MT asserted that there were legal errors in both the auction process and the decision, and on Monday the court ruled in favour of the company.
3G coverage threatened
As the results of the entire process were thrown out, the decision will not only affect the launch of the fourth mobile operator but could also disturb nationwide 3G coverage, frequency blocks for which were also part of the tender.
The court’s main issue was with a government decree in effect at the time the bids were ruled upon – it has been rescinded since – which declared that a state-owned company cannot win the rights for that particular frequency.
Whether the original conditions are reinstated or a new tender is called is up to the NMHH to decide. Commenting on the decision, the media authority said it is examining the ruling of the court, but noted that the entire process was carried out by strictly obeying the law.
“The decision will likely delay the market entry of a new provider,” NMHH deputy chief Gábor Mátrai said. “We continue to believe that this would have mainly favoured customers by driving down prices and enhancing competition in the services offered.”
Existing providers Vodafone and Telenor, who went to court with MT, did not wish to comment on the decision. Magyar Telekom noted that the judgment of the court cannot be appealed against. However, a judicial review of the judgment before the Kúria (Supreme Court) is available.