As in many other markets in the region, in Hungary 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 fixed-line and mobile broadband services to boost revenue. The economic crisis also affected telecom revenue, though recovery since 2013 has improved spend among consumers and so helped revitalize telecom services revenue. However, financial recovery among telcos has been rendered more difficult by the government’s telecom and utility taxes. The attempt to impose a tax on internet data traffic was abandoned in November 2014 following civil demonstrations against it, though taxes on calls and messaging services remain. In late 2015 the government struck deals with Maygar Telekom and a number of other operators under which the telcos will extend 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.

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 capitalize 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 recognized 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.

The analysis 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:

• Amendments to utility Tax encouraging operators to accelerate deployment of superfast broadband networks;
• Deutsche Telekom operationally integrates GTS as part of its B2B Europe unit;
• government scraps proposed levy on internet traffic, continues with other telecom taxes; Deutsche Telekom acquires GTS Central Europe’s business in Hungary;
• EC drops legal case against telecom crisis tax; operators report lower revenue; new access regulations incorporate fibre and cable infrastructure sharing;
• National Media and Infocommunication Authority inaugurated to oversee telecoms sector;