26 September 2016

In the world of globalization interconnection agreements between telecommunication operators have growing importance. Efficient interconnection is not only important for customers, but also to enable activities like electronic banking, e-commerce or mobile roaming. If you decided to enter into an interconnection agreement with a Hungarian operator, this short article may be a useful guideline for you.

Registration before the NMHH

In order to enter into an interconnection agreement with a Hungarian operator, you must be a registered telecommunication operator in Hungary. Thus, you must file the registration before the NMHH, which is the Hungarian Infocommunications Authority.

The registration procedure is simplified and user-friendly: if the provided data is correct and complete, within 8 days as of filing the registration form, the Infocommunications Authority will decide about the registration.

The applicant must define the scheduled date of starting the interconnection services and must inform the Authority about the actual starting date. Before starting the services, the operator must file its general terms and conditions to the Authority.

Reference Interconnection Offer

The Authority identifies the operators who have significant market power on the telecommunication market and establishes their obligation to enter into interconnection agreements with other operators.

These SMP operators are obliged to file the so called reference interconnection offer to the Authority. The mandatory content of the reference interconnection offer is regulated by the relevant government decree.

If the Authority approves the content of the reference interconnection offer, the SMP operator shall publish it. After the approval and publication the SMP operator is bound to its reference interconnection offer and cannot deviate from it in the interconnection agreement.

Contracting initiative

Based on the published reference interconnection offer, you can file a contracting initiative with the SMP operator. You must consider the format and content requirements, because if your initiative does not meet the given criteria, you will be invited to harmonise it, which can slow down the process.

The contracting initiative can only be refused by the SMP operator on two grounds:

  • if it would be technically impossible to achieve based on objective technical criteria or
  • if the network integrity cannot be maintained.

Otherwise within 10 days as of the day of the receipt of the contracting initiative, the SMP operator shall inform the operator about

  • either the staring of the contract negotiations,
  • or if the contracting initiative was not technically or economically justified, about the conditions of the reasonable offer.

If the SMP operator fails to respond to the contractive initiative within 30 days as of the day of the receipt, as a main rule, it shall be regarded as accepted, and from legal point of view the interconnection agreement comes into existence.

Negotiations and  signing of interconnection agreement

In case the SMP operator finds the contracting initiative suitable for further negotiations, there will be a short and limited negotiation procedure between the parties.

Principally, the negotiation can take only a short time, since based on the relevant government decree, the interconnection agreement must be concluded within 15 (in some cases 30) days as of the receipt of the contracting initiative by the SMP operator.

The playfield of negotiations is very limited, because, as mentioned before, the parties cannot deviate from the reference interconnection offer. Furthermore the SMP operators are obliged to the equal treatment of all operators, thus you cannot negotiate significantly better conditions than your competitor.

Nevertheless, based on our experiences the negotiation procedure can take more months because of technical details (eg. connecting points, etc.).

After signature

Within ten days as of the conclusion of the interconnection agreement, the parties must start the installation examination and the testing.

Before starting the testing procedure, the contracting party must provide bank guarantee or security deposit to the SMP operator, in order to cover the costs of connection and eventual future claims arising from breach of contract etc.

The interconnection and the start of the provision of services must be established and allowed by the SMP operator as soon as possible but within a maximum of 30 days from the conclusion of the contract.