The Hungarian Communications Market Developments and ...

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The Hungarian Communications Market Developments and Regulation between 2004 and 2008 ratios: e.g. on 31 December 2006, cable modem Internet service was available in 60 percent of the households and in mid-2007, mobile broadband was available for 48 percent of the population. The two leading technologies of the broadband market across Europe are ADSL and cable modem Internet. The situation in Hungary is the same, yet with one difference. Cable infrastructure in Hungary plays a greater role than in Europe. The comparison of the proportion of cable modem and ADSL subscribers in the EU 25 states illustrates well the importance of the role of cable modem Internet in the Hungarian broadband market. As regards this index, Hungary ranks far ahead even of countries with traditionally high penetration rates (Belgium, Netherlands, Austria) as the cable/ADSL ratio in Hungary is more than 80 percent. In addition to cable modem access, the number of mobile Internet users has also increased remarkably since 2007, so mobile technology appeared in the market as a new competitor of broadband data transmission technology. According to a residential survey carried out by NHH in February 2008, six percent of the households had mobile Internet subscriptions, with narrowband and broadband connections to the Internet equally distributed among them. The ratio of fixed wireless (WiFi) access also reached six percent. The past four years have seen a drastic fall in the prices of broadband services. While in 2003 the price of the cheapest broadband package with the leading service providers was HUF 8 to 10 thousand, the same package was available for only HUF 5 thousand in 2007. In addition, for the 2007-year price subscribers could use three or four times higher bandwidths than in 2003. 3.4 Broadcasting market Platforms in the broadcasting market The most significant platform of the Hungarian broadcasting market is cable television service available in more than 60 percent of the households. In the years before 2004, it was the only broadcasting platform offering multi-channel Hungarian content. However, in the recent years, in addition to local cable television service providers and early players of the digital satellite market, a new digital satellite service provider and several IPTV service providers appeared in the market. Owing to the fierce competition, digital satellite service providers acquired a considerable share over the last three years. IPTV service is not significant, as it has only been operating for two years, so its market share so far is low. Trends show that notwithstanding the emergence of new substitutive platforms, the cable television sector was able to produce further growth. The source of such growth was mostly attributable to the connection of those households using terrestrial and/or satellite services that used to be free in the past. While in 2003 more than 40 percent of the households had only this type of programme reception, by 2007 their ratio has dropped to under 30 percent. Figure 3.17: Use of broadcasting platforms % 60 50 40 30 20 10 0 Subscription satellite Bírságok Terrestrial együttes + others CATV 2003 2005 2006 2007 Source: 2003, 2005, 2006: Market survey by NHH and Szonda Ipsos (“Residential Communications Information”); 2007: Market survey by NHH and Tárki Cable television Hungarian cable television infrastructure, even in international terms, is considered advanced, with a penetration rate (number of subscribers as compared to the total number of households) being above OECD average.
40 41 Figure 3.18: Cable television penetration in the OECD countries % 80 2002 2005 60 40 20 0 Greece Italy New Zealand Turkey Spain Mexico United Kingdom France Czech Republic Australia Portugal Poland Iceland Finland Austria Ireland Slovak Republic Norway OECD Denmark Hungary Japan Sweden Germany United States Canada Korea Luxembourg (Wallonia) Switzerland Netherlands Source: OECD Communications Outlook, 2007 According to NHH’s service provider survey (data collected as part of a market surveillance procedure), cable television service was available for 82 percent of Hungarian households in 2007 (homes passed). The index is continuously increasing as large development projects took place as regards the cable networks even in the past few years. Consequently, Internet service and voice-based (VoIP) service was also available in 74 and 31 percent of households covered by cable network, respectively. The availability of the VoIP service means that the 3-play service is also available. The household penetration of Internet service and VoIP service provided through cable network was 10.5 and 3 percent, respectively. At the end of 2007, significant service providers, such as UPC and T-Kábel had 123 thousand and 19 thousand 3-play subscribers, respectively. Moreover, digital cable television service (DVB-C) has also been launched. According to an NHH survey in June 2005, 19 service providers had, at least partially, digital networks with around 325 thousand subscribers. Nevertheless, at the end of 2006, already 26 service providers offered digital programme reception with digital cable networks reaching as many as 760 thousand households. In March 2008, the largest cable service provider also launched its digital cable television service in Budapest and in four other big cities. During the first three months of the introduction of the service, 50 thousand UPC subscribers had their analogue servicepackages replaced by digital ones. On 31 December 2006, in the multi-player cable television service market 373 service providers provided cable television services. In spite of this, the Hungarian market is fairly concentrated, with five major service providers covering significant share of the households. Their combined market share according to the number of subscribers was 68 percent in 2003, which has decreased to 61 percent by 2007. Locally, however, individual service providers do not really compete with each other in view of the fact that there are hardly any areas covered with parallel networks. The cable television market has seen a price increase in the previous years. As a result of the competition between platforms, this process has remarkably slowed down and even stopped by 2007. The entry of Digi Ltd. (Digi TV), a new digital satellite service provider with an aggressive strategy played a significant role in boosting competition. Figure 3.19: Average monthly spending on cable television HUF 4 000 3 000 2 000 1 000 3239 3618 3738 2004 2616 2005 2006 2007 0 Dec 2003 Jun 2005 Nov 2006 Dec 2007 Source: NHH-TÁRKI-Ithaka, “Use of Communications Services” According to customer surveys, households with cable television paid about HUF 3,700 on average for this service at the end of 2007, which shows a HUF 1,000 (43 percent) increase in comparison with 2003 figures. Apart from the increase in prices, higher monthly spending was attributable to the fact that subscribers have turned
Page 1 and 2: 1 1 The Hungarian Communications Ma
Page 3 and 4: CONTENTS Contents 1. NHH’s role i
Page 5 and 6: 02 03 years. This year one of NHH
Page 7 and 8: 04 05 NHH’s role in the regulatio
Page 9 and 10: 06 07 affected parties have failed
Page 11 and 12: 08 09 Figure 1.1: NHH’s regulator
Page 13 and 14: 10 11 Key areas of regulation for t
Page 15 and 16: 12 13 2.1 Changes in institutional
Page 17 and 18: 14 15 Market analysis decisions of
Page 19 and 20: 16 17 Decision Round 1 Year Round 2
Page 21 and 22: 18 19 purposes of WMAN, which was c
Page 23 and 24: 20 21 sional knowledge but also for
Page 25 and 26: 22 23 There is the possibility of p
Page 27 and 28: 24 25 lution is well demonstrated b
Page 29 and 30: 26 27 surveillance activity. Servic
Page 31 and 32: 28 29 a member of the Council of Ad
Page 33 and 34: 30 31 Electronic communications is
Page 35 and 36: 32 33 Figure 3.5: Monthly average t
Page 37 and 38: 34 35 Fixed location services In Hu
Page 39 and 40: 36 37 Figure 3.11: Changes in the n
Page 41: 38 39 Figure 3.15: Changes in the n
Page 45 and 46: 42 43 Results and influence of mark
Page 47 and 48: 44 45 hindered on the retail side,
Page 49 and 50: 46 47 Figure 4.2: Voice traffic sha
Page 51 and 52: 48 49 gated price index) above the
Page 53 and 54: 50 51 Figure 4.8: Monthly spending
Page 55 and 56: 52 53 the Board imposed the obligat
Page 57 and 58: 54 55 Figure 4.10: Sales of ADSL se
Page 59 and 60: 56 57 stimulation regarding the dev
Page 61 and 62: 58 59 Figure 4.14: Broadband penetr
Page 63 and 64: 60 61 The OECD study also contains
Page 65 and 66: 62 63 postponed to the distant futu
Page 67 and 68: 64 65 mately introduced EU level re
Page 69 and 70: 66 67 According to the obligation i
Page 71 and 72: 68 69 4.5 Regulatory means applied
Page 73 and 74: 70 71 The implementation of the reg
Page 75 and 76: 72 73 Epilogue Today, electronic co
Page 77 and 78: 74 75 28 The full unbundled access

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