Description

BMI’s Q110 Hungary Telecommunications Report contains updated and extended forecasts for the mobile, fixed-line and internet sectors. Forecasts have been extended through to the end of 2014 with our general views remaining largely unchanged. At the end of 2008 mobile penetration hit 116.5% following robust growth of over 10%. However, the first nine months of 2009 saw the sector enter a sustained period of decline with the country’s subscriber base falling by 3.4%. Several factors have culminated in this decline. The mobile operators have been looking to migrate prepaid customers onto more lucrative postpaid contracts in an effort to bolster revenues and reduce customer churn. This resulted in heavy net losses in the operators’ prepaid subscriber bases exacerbated by the discounting of inactive SIMs. In addition, the sharp economic contraction underway in Hungary is causing consumers to cut back on their spending, which is weighing on gross additions and accelerating gross subscriber losses. This has also been evidenced in the falling ARPU rates as customers have become more price conscious and the operators have competed for customers by offering improved tariffs. BMI has long held the view that Hungary’s mobile market would benefit from the entrance of mobile virtual network operators (MVNOs), rather than an oft mooted fourth mobile network operator. In the final quarter of 2009 Magyar Posta, Hungary’s state-owned postal service, announced that it would launch as the country’s first MVNO over Vodafone’s network. Magyar Posta intends to target prepaid subscribers in areas where the mobile network operators have no sales points. In time we expect to see more MVNOs launching in Hungary and competition in the prepaid segment intensifying. This should push the three mobile network operators to increase their focus on higher value customers in the postpaid and mobile data markets. The country’s fixed line sector is in a continuous state of decline. In line with most of the region, fixedline subscribers have been dropping their fixed lines in favour of mobile and VoIP alternatives. In an effort to halt this trend, wireline operators have been marketing double- and triple-play bundles combining fixed voice services with broadband and pay-TV. This strategy should prove successful to some extent but BMI does anticipate the fixed line sector’s decline ending in the near future. In the broadband market there is fierce competition between cable and ADSL providers. The sector is dominated by incumbent Magyar Telekom through its ADSL operations and its cable provider, TKabel. Competition with alternative operators such as UPC Hungary and between different technologies is driving the market forward. As testament to this in 2009 we anticipate broadband subscriber growth hitting 17.0%, demonstrating an acceleration from the 15.4% seen in 2008.

Scope

• Benchmark BMI's Independent 5-Year Telecommunications Industry Forecast for Hungary to test other views - a key input for successful budgeting and strategic business planning in the Hungary telecommunications market.
• Target Business Opportunities & Risks in Hungary's Telecommunications Sector through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Hungary.
• Exploit Latest Competitive Hungary Telecommunications Intelligence & company SWOTS on your competitors and peers through company rankings by sales, market share, investments and leading products and services.