The Hungarian Communications Market Developments and ...

The Hungarian Communications Market Developments and Regulation between 2004 and 2008
From the year 2004, the consumer price index has continuously increased,
while the change of prices of electronic communications services
remarkably fell behind. In fact, prices decreased in nominal terms.
As a result, by the end of 2007, in real terms, prices of the electronic
communications services were 25 percent lower than in 2003.
Figure 3.3: Per capita spending on telephone and Internet services
per annum
Thousand
HUF %
50
40
30
20
10
0
Source: HCSO
Telephone and Internet
Proportion among total expenses
2002 2003 2004 2005 2006
In recent years, per capita spending on telephone and Internet
services, according to the calculations of the Hungarian Central Statistical
Office (HCSO), has continuously increased. Thus, spending in
2006 was 73 percent higher in nominal terms and 33 percent higher
7,5
7,0
6,5
6,0
5,5
5,0
4,5
4,0
in real terms than the 2002 figure. The ratio of per capita spending
on telephone and Internet services within total per capita expenditures
also increased to nearly reach as high as 7 percent in 2006.
The reason for the spectacular increase in spending is not an increase
in prices, but a remarkable growth in the volume of consumption.
This is due, on the one hand, to the fact that more and more
people use new communications services, e.g. mobile telephones
and particularly the Internet and, on the other hand, to the increased
usage of services, i.e. the traffic generated by individual costumers.
Increase in the use of services within the different market segments
varies: while demand for fixed voice services is decreasing,
the demand for mobile telephony and especially for Internet services
shows a strong increase.
By analysing the effects of lower prices, it can be established that
between December 2002 and December 2007 it was the spending
of households with a fixed telephone line that has decreased to the
highest degree, nearly by 20 percent. There were only minor fluctuations
in monthly expenditure associated with mobile telephony, with
practically no significant changes until 2006. In 2007, however, they
remarkably decreased, by nearly 7 percent. In 2007, the previous
intensive growth in spending associated with cable television
stopped. Although spending associated with the Internet increased
by 33 percent until 2005, by the year 2007 it fell back to the 2002
level. Nevertheless, that period saw a significant improvement in
both service content and service quality, with the most spectacular
development in the case of Internet. In 2002, Internet service mostly
meant narrowband dial-up connections. Nowadays costumers use
almost only broadband services.
Figure 3.4: Household penetration of telecommunications services
%
80
60
73,3
68,2
65,9
66,4
58,2
63,2
69,7
74,1
78,7
79,3
55,2
56
55,9
57,9
62,2
December 2002
December 2003
June 2005
December 2006
December 2007
40
23,1
33,2
20
15,2
7
11
0
Fixed telephone Mobile phone Cable television Internet
Source: NHH – Tárki 2008 25