Telenor, Magyar Telekom Receive Permit to Share Frequency - Update

By Margit Feher

BUDAPEST--Norway's Telenor ASA (TEL.OS) and Magyar Telekom Nyrt. (MTELEKOM.BU) may share their 800 megahertz frequency networks to provide a better mobile and data service with the mutual use of each others' spectrum, Hungary's communications authority NMHH said on Wednesday.

"It's important to stress that this is a technological cooperation agreement and doesn't include retail sales, pricing and customer relations," said Telenor Hungary's strategic advisor Gyozo Drozdy at a press conference.

Under the network-sharing agreement, which will expire in 2029, the two companies will partially and mutually allow each other to use their respective 800 MHz frequency, the licence which they won last year in a public tender for various unused broadband frequencies.

The network sharing agreement specifies that Magyar Telekom will provide the high-speed service in Eastern Hungary and Telenor in Western Hungary. The capital city, Budapest isn't included in the contract.

Financial terms weren't disclosed. Both companies see an increase in efficiency from the deal, Mr. Drozdy added.

Since Magyar Telekom is Hungary's biggest and Telenor is the country's second-biggest mobile provider in terms of subscriber numbers out of the country's three providers, the Hungarian competition office GVH is still to approve the cooperation contract, the NMHH said. Magyar Telekom is majority owned by Deutsche Telekom AG (DT). The third mobile provider is the Hungarian arm of Vodafone Group PLC. (VOD)

As a result of the deal, the two companies will be able to provide a Long-Term Evaluation, or LTE, mobile service that will have more capacity and be more advanced technologically than if they developed the service on their own, the NMHH said in a statement.

LTE is often referred to as 4G services, a high-speed wireless technology for mobile phones and data transmission.

Write to Margit Feher at [e-mail]; Twitter: @margitfeher