BUDAPEST — Antenna Hungaria — this territory’s premier broadcast tower company — is pressuring the federal government to allow it to enter the telecommunications business to take on state-owned telephone provider MATAV.

It’s complicating the long-awaited privatization of Hungary’s TV industry and may curtail the ambitions of U.S. media interests lining up to enter this market.

AH has announced that it wants to join a telecom consortium lead by Netherlands-based Unisource that has already allied itself with eight Hungarian companies in a proposal to start the PanTel communications corporation. It stands to win a substantial cut of the Hungarian telecom industry when MATAV’s monopoly in this market expires in 2001. But more is at stake than phones. If AH is given a green light to enter the influential and lucrative telecom industry, its scheduled privatization, considered a necessity for the development and reform of Hungary’s television sector, could be indefinitely postponed, say analysts who argue that AH would become too important for the government to relinquish. AH controls the terrestrial tower system which transmits the nation’s major television [MTV1 and 2] and radio [Magyar Radio] networks, and has twice been put for sale in aborted but ongoing privatization bids.

That the future of two Hungarian TV channels (MTV2 and the Channel 58 frequency)

now in the final stages of privatization hinges on the sale and retooling of Antenna Hungaria makes AH’s telecommunications ambitions of vital interest to U.S. investors such as Central European Media Enterprises CEME,chaired by American cosmetic mogul Ronald Lauder, has bid on both MTV2 and Channel 58. Commercial broadcasters argue that AH must be sold, recapitalized

and upgraded for Hungary’s terrestrial tower infrastructure to be modernized.

But if AH becomes a major telecommunication player, the government will be hard pressed to part with it. “It would be worth thinking about whether it’s good for the Hungarian state to let go of a dynamically developing business by not having any state-owned companies in the decision-making process,” an AH

spokesperson told the Hungarian press.

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