2016 Hungary - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Hungary’s telcos encouraged to widen reach of super-fast broadband

The number of fixed-lines in Hungary 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 fixed-line and mobile broadband services to boost revenue. The economic crisis of recent years has also affected telecom revenue, though recovery since 2013 has improved spending habits among consumers and so helped revitalise sector revenue. However, financial recovery among telcos has been rendered more difficult by the government’s telecom and utility taxes. The tax on internet data traffic was criticised by the European Commission, and the rate was reduced to 18% in early 2017. Other taxes on calls and messaging services are also in place.

In late 2015 the government struck deals with Maygar Telekom and a number of other operators under which the telcos are extending super-fast broadband access to underserved areas. For its part, the government agreed not to provide funding to competitors in specific areas where telcos undertook to provide network upgrades.

Hungary has high broadband penetration for the region. Infrastructure-based competition is intense, with an extensive cable network, mainly operated by UPC Hungary, competing against DSL services and a vibrant and rapidly expanding fibre sector. The regulator has introduced a number of measures aimed at promoting market competition. Competition and the demand for bandwidth are pushing the drive for higher speed platforms, and so have encouraged operators to invest in FttX and DOCSIS3.0 upgrades. Both of these technologies will be increasingly important to the market during the next few years. It is expected that UPC Hungary will begin to deploy DOCSIS3.1 technology later in 2017, providing data at 1Gb/s or higher. In addition, amendments to the Utility Tax have encouraged operators to accelerate the deployment of superfast networks (those which provide data of at least 30Mb/s).

The dynamic mobile market is served by three mobile network operators and a growing number of MVNOs. The bundled services operator DIGI Telecommunications is building up a mobile network based on its 1800MHz concessions, supplemented by spectrum in the 3.4GHz which it secured at auction in June 2016. Mobile penetration is relatively high for the region, and there remains considerable growth in mobile broadband services delivered via upgraded networks. These upgrades have supported a rapid increase in the use of smartphones, and consequently of mobile data. Revenue growth is focused on mobile data as operators struggle with competition and regulated tariff reductions, as well as reduced MTRs.

This report provides an overview of Hungary’s telecoms market, highlighting regulatory developments, the major operators, fixed-line network infrastructure, and a variety of insightful statistics. The report also reviews the mobile market, covering the major players, voice and data services, and regulations. In addition, the report assesses the fast-developing broadband and digital media sectors, including market analyses, statistics and scenario-based forecasts for fixed broadband to 2021.

Key developments:

• Amendments to Utility Tax encouraging operators to accelerate deployment of superfast broadband networks;
• Deutsche Telekom acquires GTS Central Europe’s business in Hungary;
• New access regulations incorporate fibre and cable infrastructure sharing;
• Government invests HUF150 billion in program to deliver universal 30Mb/s broadband services by 2018;
• Telcos strike deal with the government to extend broadband to underserved areas;
• RG Networks launches satellite broadband via Eutelsat;
• FttX subscriber base broaches 520,000;
• Government expands e-payment systems;
• Maygar Telecom steps up e-health initiatives;
• Vodafone Hungary and DIGI Telecommunications secure spectrum in the 3.4GHz band;
• Magyar Telekom and Telenor Hungary expand LTE coverage through joint network using the 800MHz band;
• Magyar Telekom expands NFC-enabled MobilTárca mobile wallet service;
• T-Mobile expands LTE-A services offering data at up to 300Mb/s;
• UPC cable sector dominance following purchase of FiberNet assets, launches 250Mb/s service;
• UPC launches mobile service as an MVNO;
• Report update includes the regulator’s market data to October 2016, telcos’ financial and operating data to Q3 2016, recent market developments.

Companies mentioned in this report:

Magyar Telekom, Invitel, Antenna Hungaria, GTS-Datanet, B2B Europe, UPC Hungary, Hungarotel, GTS Datanet, T-Mobile Hungary, Telenor Hungary, Vodafone Hungary, T-Home, FiberNet, Maygar Televizio, TV2.