Recent Study: Hungary Telecommunications Report Q4 2013

From: Fast Market Research, Inc.
Published: Wed Sep 11 2013

Hungary's mobile market is mature, with opportunities for growth concentrated in encouraging subscribers to upgrade their handsets or move to faster data services. Migration strategies have been adopted by operators as overall growth opportunities have diminished - with total mobile subscriptions declining each quarter of 2012. Meanwhile, the fixed-line sector has surprised many with its robustness. Against the standard trend of mobile substitution, the the number of fixed-line subscribers actually increased in Q113. While we do not expect that this trend will continue over the long term, it is indicative of the success of bundled packages and faster wireline broadband packages.

Key Data

* After net subscription loss in each quarter of 2012, the mobile market returned to growth in Q113 with the addition of 15,000 subscriptions.
* NMHH reported a total of 2.504mn active mobile internet subscriptions at the end of March 2013, up 37.7% y-o-y - making it the outperforming growth segment of Hungary's telecoms market.
* High-speed broadband subscriptions have continued to grow rapidly, with cable over DOCSIS3.0 and FTTx subscriptions up 66.6% and 17.6% respectively y-o-y to Q113.

Full Report Details at

Key Trends And Developments

Sector-specific taxation has been a contentious issue in Hungary in recent years, and the issue resurfaced in 2013. The Hungarian Parliament enforced a new tax from January 1 2013, which sees all utility network owners - telecoms included - charged for their ducts. Meanwhile, a usage-based tax (on voice calls and SMS) is due to come into effect from August 1 2013, and operators are prohibited from passing the tax onto subscribers. Operators have argued strongly against the taxes on the grounds they will reduce investment levels, while the European Commission has referred Hungary to the European Court of Justice for the introduction of the taxes. However, the government has argued repeatedly that the taxes are required in order for the state to meet budget deficit reduction targets.

Another major development is in the saga of the fourth mobile operator in Hungary. MPVI Mobil, a consortium of state-owned companies licensed to be Hungary's fourth mobile operator, decided to suspend its operations in April 2013 until an opportunity to re-enter the market is presented. The company will look to keep costs low, announcing the reduction of its workforce of 64 staff members, until a decision is made about its future. BMI believes this marks the end for MPVI Mobil, and we caution that an alternative fourth licensee would struggle to recoup its investment should another auction take place.

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