2014 Hungary - Telecoms, IP Networks, Digital Media and Forecasts

Popular protests force rejection of tax on internet traffic

Hungary’s telecom regulator has been effective in promoting competition, and has aligned interconnection and access tariffs with the EU average. As in many other markets in the region, the number of fixed-lines, as also fixed-line revenue, has been affected by the changing consumer use of such services and by the trend for fixed-to-mobile substitution. Fixed-line operators have thus looked to broadband internet access and broadband-based services to boost revenue. The economic crisis has also affected telecom revenue, exacerbated by the government’s recent telecom taxes. The attempt to impose a tax on internet data traffic was abandoned in November 2014 following civil demonstrations against it.

The dynamic mobile market is served by three mobile network operators and a growing number of MVNOs. Mobile penetration is relatively high, and though there are fewer opportunities for revenue growth through new subscriber additions, the MNOs have upgraded networks to capitalise on strong consumer demand for mobile data services. Thus future revenue growth is focused on mobile data while operators face stiffening competition and regulated tariff reductions.

Hungary enjoys relatively high internet penetration, with broadband representing the majority of internet connections. There is effective cross-platform competition. The market is led by cable, closely followed by DSL. The regulator has acted to promote competition via LLU. Competition and the demand for bandwidth are pushing the drive for higher speed platforms, and so have encouraged operators to invest in FttX and DOCSIS 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.

The competitive digital TV market is continuing to evolve with new bundled service offerings and the ongoing transition to digital broadcasting. Digital TV is available via terrestrial TV, cable TV networks, satellite and IPTV platforms.

This report provides an overview of Hungary’s telecoms and IT market, highlighting regulatory developments, the major operators, fixed-line network infrastructure, and a variety of insightful statistics. It reviews the strong mobile market, covering the major players, voice and data services and the regulatory environment. It also assesses the broadband and digital TV markets, covering market developments and including data, statistics and scenario-based forecasts for fixed broadband penetration to 2020.

Key developments:

Mid Europa Partners to sell Invitel Holdings; government scraps proposed levy on internet traffic; Deutsche Telekom acquires GTS Central Europe; telcos report lower revenue into Q3 2014; new access regulations incorporate fibre and cable infrastructure sharing; National Media and Infocommunication Authority inaugurated to oversee telecoms sector; regulator auctions 450MHz spectrum; multi-spectrum auction in late 2014 boosts mobile broadband capabilities; T-Mobile trials LTE-A; M2M sector gaining traction; smartphones accounting for up to 70% of handset sales; RG Networks launches satellite broadband via Eutelsat; government expands e-payment systems; Maygar Telecom steps up e-health initiatives; Maygar Telekom stops selling cable TV services; DTTV available to 95% of population; UPC cable dominance following purchase of FiberNet assets, regulator market data to September 2014; telco’s financial and operating data for Q3 2014; recent market developments.

Companies and subsidiaries mentioned in this report include:

Magyar Telekom, Invitel, Antenna Hungaria, GTS-Datanet, Telenor Hungary, Vodafone Hungary, UPC Hungary, Hungarotel, FiberNet, Maygar Televizio, TV2. 

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