Magyar Telekom Acquires Frequency Usage Rights

Magyar Telekom, the leading Hungarian telecommunications service provider has announced that – in the auction procedure for the entitlements of frequency use of the 900 MHz and the 1800 MHz frequency bands –, it has won the rights of use of 2×8 MHz in the 900 MHz band for HUF 18.48 billion and 2×20 MHz in the 1800 MHz band for HUF 25.8 billion.

In a statement on the website of the Budapest Stock Exchange, the company says that on October 16, 2020 the Office of the National Media and Infocommunications Authority announced an auction procedure for the entitlements of frequency use of the 900 MHz and the 1800 MHz frequency bands that are currently used by the operators and are due to expire in April 2022.

The Company currently holds 10 MHz and 15 MHz duplexes on the 900 MHz and 1800 MHz frequency bands respectively expiring at this date. The auction took place on January 28, 2021.
Magyar Telekom will be entitled for the usage of the above listed frequency bands until 2042 – provided that by fulfilling the respective conditions, the term of rights of use for frequencies is extended by five years. Magyar Telekom is required to pay a total price of HUF 44.28 billion for these frequency blocks, and this payment is expected to be due in the first quarter of 2022 whereas the present value of this liability is expected to be booked in the first quarter of 2021.

The present value of the future band fees related to the acquisition of these frequency blocks is expected to be booked also in the first quarter of 2021, in the amount of approximately HUF 39.5 billion.