2010 Hungary - Telecoms, Mobile, Broadband and Forecasts

Growing appetite for next generation broadband in Hungary

As part of the European Union, Hungary possesses an open economy. Impacted by the recent global financial crisis, assistance was provided by the International Monetary Fund, European Union and World Bank, leading to implementation of unpopular fiscal measures. Despite improving economic prospects based on export growth, real GDP is expected to continue contracting in 2010, with IMF estimates of a 0.2% contraction.

Despite the economic slowdown, the telecom market has fared relatively well given the essential nature of most telecom services. Noted impacts include falling subscriber numbers in the mobile market and reduced revenue for foreign investors due to the devalued Forint. During 2010 the fixed-line market continued its downward trend in fixed-line numbers in response to fixed mobile substitution. Hungary’s fixed telephony market is served by the incumbent as well as well-established competing cable TV operators.

Broadband represents the majority of Internet connections; DSL and cable are the most popular broadband access platforms due to the reach of the public switched telephone network and cable TV networks. The demand for bandwidth is driving deployment of higher speed platforms, such as FttX and EuroDocsis 3.0. Catering for the large Internet user-base are useful online services and applications, fostering the development of an Internet society, a trend recognised and encouraged by the government through investment and policy.

Hungary’s broadcasting market is evolving due to competition and the migration of TV from analogue to digital. Standard definition and high definition digital TV is available via terrestrial TV, cable TV networks, satellite and broadband TV.

Hungary’s mobile market, like that of its Central European counterparts, has matured with penetration rates surpassing 100%. Services are offered by three mobile network operators, all of which are majority or wholly-owned by Western European operators. With mobile SIM card penetration at saturation levels, the mobile network operators have shifted focus to increasing Average Revenue per User levels; encouraging prepaid users to take up postpaid services as well as encouraging spending in the underdeveloped mobile broadband and content market. The reach of 3G/HSDPA networks is expanding to support mobile broadband services.

Market highlights:

• Approximately 50% of households enjoy fixed broadband access. Faster broadband is becoming evident due to large-scale FttX and DOCSIS 3.0 rollouts such as the incumbent’s plan to reach 1.2 millions with FttX networks by 2013.
• The uptake of Internet society services continues to grow; over half of businesses utilise e-government services to obtain and return information forms. Opportunities in the nascent e-health market have led to acquisitions by the telecoms incumbent.
• The transition to digital TV continues ahead of analogue switch off in 2012. Significant infrastructure-based competition is evident; digital TV services are offered by five satellite platforms, IPTV and cable TV networks accessible by the majority of Hungary's households as well as digital terrestrial TV.
• Expanding 3G networks provide coverage to the majority of Hungary’s population, improving accessibility to mobile broadband services. Subscriptions continue to grow despite adverse economic conditions and the price premium for mobile compared with fixed broadband.

Hungary broadband and telecoms statistics – 2010 - 2011

(Source: BuddeComm based on industry data)

Data in this report is the latest available at the time of preparation and may not be for the current year.