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Hungary Telecommunications Report Q1 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: December 2007 Product Code: R302-1835 Description The number of Hungarian mobile subscribers grew by 0.9% in the second quarter of 2007, confirming ourbelief that the Hungarian sector is far from stagnating, and our prediction that subscriber growth willcontinue throughout 2007 and beyond. Hungarian mobile subscriber growth in the first half of 2007 hasalready amounted to 1.7%, and this contrasts sharply with the 1% growth seen in the first six months of2006. We continue to predict that total sector growth for 2007 will amount to 4.9%, which is lower thanthe 6.1% growth seen in 2006. The market share of Hungary’s three mobile operators remained roughly the same during 2006, and thisbalancing trend appears to have continued into the first half of 2007. Pannon GSM’s share of the marketremained stable at 45.7%, while T-Mobile’s market share increased by 0.2 percentage points andVodafone’s share of the market fell by 0.2 percentage points. Following its losses in Q107, Pannon GSMappeared to be back in form in the second quarter, this time managing to beat T-Mobile with 48,000 newsubscribers (representing nearly 55% of new subscriber additions). One of the main changes introduced in our Q407 update on the Hungarian Telecoms market relates toHungary’s broadband sector. Based on new data provided by Hungary’s regulator and various operators,we now believe that there were nearly 977,000 broadband internet connections in operation at the end ofthe year, which puts broadband penetration at 9.7%. Furthermore, according to the regulator, the numberof broadband subscribers reached 1.1mn at the end of April 2007. Conditions for ADSL competition haveimproved considerably in recent months and, consequently, alternative operators have steadily increasedtheir share of the ADSL market; by the end of Q207, incumbent Magyar Telekom had a 52% share ofthe total broadband market (including wholesale). Based on current growth trends, we believe thatbroadband penetration will reach 14% by the end of 2007. Key developments in the Hungarian sector in the past few months include the announcement, in July2007, that HTCC (also known as the Hungarian Telephone and Cable Corp.) had agreed to acquire theHungarian business of Tele2, the Swedish alternative telecoms operator, for EUR4mn. Tele2 Hungary isa reseller of fixed-line telephone services using the network facilities of other operators. The company hasapproximately 490,000 active subscribers and, in 2006, reported revenues of HUF10.7bn (US$55mn).News of HTCC bid to acquire Tele2 follows the company’s acquisition of Invitel in April 2007.Moreover, in August 2007, it was reported that HTCC planned to market all of its products and servicesunder a single ‘Invitel’ brand name. Prior to its acquisition of Invitel, HTCC marketed its products andservices under three brand names: Hungarotel, PanTel and PanTel Technocom. The move to streamlineits brands is further evidence that HTCC seeks to boost its competitive edge vis-à-vis Hungary’sincumbent Magyar Telekom. Table of Contents
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