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Hungary - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Hungary's telecommunications market was completely opened to competition at the beginning of 2002, when incumbent fixed-line operator, Magyar Távkozlesi Rt (Matáv - recently renamed Magyar Telekom Távkozlesi Rt), relinquished its last remaining monopolies, those on public domestic long-distance and international voice telephony services. The other sectors of the Hungarian market had been progressively liberalised from July 1993, starting with the local telephony sector. Although nearly 15 years have passed since Magyar Telekom lost its monopoly on local services, it still holds a dominant share of the market - approximately 77% of all fixed lines were controlled by Magyar Telekom and its subsidiaries as of June 2006 (latest data). Consolidation in the local and long-distance markets has already reduced the number of credible alternative operators to a bare handful. In the local telephony market, the most successful 'new entrant' is Invitel, accounting for 11% of all fixed-lines as of mid-2006. Hungarian Telephone and Cable Corporation (HTCC)-owned HungaroTel accounted for a further 5% of lines, while Magyar Telekom affiliate Emitel accounted for 2% and UPC Hungary-owned MonorTel another 2%. In the long-distance market, Magyar Telekom faces off against PanTel (acquired by HTCC in 2005), Invitel, eTel, GTS Hungary, BT, and TeliaSonera International Carrier. By mid-2007, HTCC ought to have completed its acquisition of Invitel. In the mobile communications sector, three operators currently vie for customers. Magyar Telekom-owned T-Mobile Hungary dominates the market, accounting for around 45% of all subscribers. Telenor-owned Pannon GSM takes second place, with a little over 33.7% of customers, but is steadily losing ground to relative newcomer, Vodafone Hungary (21.2%). T-Mobile and Pannon both operate nationwide GSM 900/1800 cellular networks, which they have both been up grading with next-generation technologies such as EDGE and HSDPA, while Vodafone Hungary has a GSM 1800 network. In late-2004, each of these three companies acquired third-generation (3G) universal mobile telecommunications system (UMTS) licences auctioned by the government. It was expected that Hungary's UMTS licensees would begin offering services from 2006, but some limited services began appearing on the market in the second half of 2005. A fourth 3G UMTS licence was made available at the same time as the other three, but no bids were submitted despite there having been considerable interest at the initial stages. The spare licence remains available and, although the regulator has no immediate plans to launch a tender or auction for the licence, it has indicated its willingness to sell the licence directly to any party approaching it with a viable offer. In early-2007, fixed-line operators PanTel and UPC Hungary were said to be interested in taking up the licence, although they may prefer to wait to see if the regulator re-tenders the GSM 900 licences held by T-Mobile and Pannon, which will expire in 2008. Competition has benefited greatly from the introduction of number portability in 2004 as well as new legislation bringing Hungary's electronic communications laws into line with European Union (EU) directives concerning the regulation and further liberalisation of this sector. In the meantime, the Hungarian Communications Authority (NHH) has been conducting reviews of up to 18 discrete markets with a view to identifying those operators with a significant market presence (SMP). It has had mixed results in doing so but, broadly speaking, Magyar Telekom has been found to have SMP in most markets.
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