The Hungarian Communications Market Developments and ...

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Figure 3.5: Monthly average telecommunications spending
of households in possession of the given facilities
HUF
10 000
8 000
6 000
5 968
6 223
5 426
5 358
4 876
9 939
10 278
9 770
9 958
9 232
December 2002
December 2003
June 2005
December 2006
December 2007
6 094
7 038
8 084
6 491
6 011
4 000
2 000
2 057
2 616
3 239
3 747
3 768
0
Fixed telephone Mobile phone Cable television Internet
Source: NHH – Tárki 2008
Convergence: The appearance of 2-play and 3-play
strategies and offers
In the traditionally model of electronic communications, different
service providers provided different services using specialised
technologies and separate networks. Concurrently with the modernisation
of access networks, an opportunity opened up to use various
types of services of a single service provider at the same subscriber
access point. Consequently, the 2-play and 3-play strategies appeared,
which enable costumers to access two or three services
that have earlier been offered separately in one service-package
and through a single network. In addition to advantages for both
the subscriber (single service provider, single bill) and the service
provider (effects of economies of scope), the appearance of service
providers, earlier operating in different markets, in one another’s
market gives a new impulse to increased competition (particularly to
infrastructure-based competition). The phenomenon of convergence
has also appeared in the Hungarian market in various forms.
Duplex operation of fixed programme distribution networks (cable
television) made it possible to launch through these networks,
concurrently with programme reception, so-called duplex services,
i.e. Internet access and/or telephone service. Using this opportunity,
cable television service providers keep gradually increasing their
share in broadband Internet and fixed voice markets. According to
the January 2008 Tárki-Ithaka survey, nearly one quarter (24 percent)
of subscribers with fixed, cable television and Internet access used
these services within the framework of 3-play service packages.
In the case of adequately short loop length, certain technological
realisations of broadband DSL-access, in addition to normal baseband
telephone and Internet services, also provides broadcasting
(IPTV) and “video on demand” (VoD) services. In the case of optical
access (FTTH), the distance from the centre no longer restricts the
provision of such convergent packages. These solutions (for the time
being DSL-based) also enabled different fixed telephone service providers
to address the challenges posed by cable television service
providers and offer 3-play service-packages.
In the case of mobile radiotelephone services, the introduction
of higher-capacity download and upload (GPRS, EDGE) in secondgeneration
GSM networks made the simultaneous provision of voice
transmission and packet-switched data transmission possible. Voice
and data transmission provided through the same network is already
a basic element of third-generation mobile radiotelephone services.
The introduction of 3G/HSDPA technology resulting in a spectacular
increase in data transmission capacity has opened new opportunities
for national mobile service providers to become serious players
also in the broadband Internet market.
As a new option, “fixed location” was introduced in mobile telephone
services, where the term “fixed location” means the sector
of a specific base-station. Within this sector, the call numbers of
the fixed network can be reached at lower rates. In this case, the
subscriber has a fixed and a mobile call number as well. Through
this solution, mobile service providers entered the traditional market
of fixed telephone services.
For the time being, it seems to be only a matter of time before
the appearance of so-called 4-play offers providing four services
through a single service provider (one bill), including fixed and mobile