The Hungarian Communications Market Developments and ...

More documents

Recommendations

Info

The Hungarian Communications Market Developments and Regulation between 2004 and 2008 growth of the share of alternative service providers in Hungary was significantly higher than the EU average. On the basis of the above information, it can be established that the Hungarian traffic market has dynamically approached the EU average between 2004 and 2006. The Hungarian indices show that before 2004 incumbent service providers have managed to delay competition successfully. The harmful effects of this are observable even today, as it is safe to say that the later it comes to entry into the market, the less chance there is for fierce competition to develop. In the fixed access markets of all EU Member States competition developed only very slowly. The past few years have, however, brought about some changes also in this respect. Essentially due to the growth of the DSL market, fixed access became more attractive for alternative service providers. In addition, the provision of voice communications through cable television infrastructure also became economically feasible, which significantly contributed to the strengthening of competition in the fixed access markets in those Member States with significant cable television penetration. In respect of the EU average, the ratio of consumers using access provided by alternative service providers has nearly doubled between 2005 and mid-2007. Figure 4.7: Ratio of consumers using access provided by alternative service providers % 14 12 10 8 6 4 2 0 6,1 0,6 EU average HU PL SK SL CZ 7,9 3,0 2004 2005 2006 2007 Source: NHH and EU Implementation Reports 11, 12, 13 In this period, Hungary has also seen a dynamic development, with the hardly noticeable share of alternative service providers in 2004 almost reaching nine percent by 2007. This value was somewhat higher than EU average growth. Making a regional comparison, only the Polish index was better than the Hungarian. However, it is 9,5 5,5 13,5 8,8 also noticeable that competition in the retail access market has also been developing at a notable pace in other countries of the region. In Hungary, it is mainly the cable television service providers that generate access market competition. On the contrary, the role of alternative service providers competing through unbundled access to the local loop is much less marked than in a number of other European countries. In 2007, Teligen dealing with the comparison of communications prices estimated monthly spending relating to the consumer baskets (newly) defined by the OECD (three residential and two business consumer baskets), assuming that in the given consumer structure, rational consumers opt for the optimal tariff-package of the incumbent service provider. The spending of Hungarian consumers with low (600 calls per year) and medium (1200 calls per year) traffic (in both cases using Tariff Package “Felezô”) is in nominal terms among the lowest ones in Europe. The spending of residential consumers with significant traffic (2400 calls per year) in Hungary, using Tariff Package “Favorit”, is in the middle of the pack. At the same time it is likely that, with Tariff Package “Favorit nonstop plusz” introduced meanwhile by Magyar Telekom for consumers with large traffic, the Hungarian value of the service would have been significantly lower. Also in the case of the consumer basket for micro-enterprises, the Hungarian value is the lowest one in Europe (Package “Grátisz 500”). This offer, even in the case of small and medium enterprises, is among the cheaper ones and, in terms of purchasing power parity, the Hungarian values would be in the middle of the pack or characteristic for more expensive countries. Summary On the basis of the assessment of the effects of regulation, it can be established that after 2004 positive developments have started also in fixed traffic markets. The share of alternative service providers began to dynamically grow, with Hungary’s underdevelopment significantly diminishing as compared to the EU average. Prices also decreased, thus making consumers able to experience the advantageous effects of both lower prices and greater choice. The intensification of competition and the processes beneficially influencing consumer prosperity are essentially due to the obligations imposed by the Board in line with the Eht., in particular to the decrease of interconnection tariffs from the previously high level to around EU average. NHH has also enforced the improvement of non-price conditions of interconnection, which facilitated the entry of alternative service providers into the market. Indices of the fixed access market investigated are not as bright as in the case of traffic markets. It is true that the access market competition did make a forceful start also in Hungary, this was owing to factors beyond the scope of regulation, primarily the entry of cable service providers into the market within the framework of the 3-play strategy.
50 51 Figure 4.8: Monthly spending of residential consumers and micro-enterprises with medium traffic OECD baskets for PSTN, 2007 Medium usage residential basket Euro per month VAT excluded 60 50 Fixed Usage 40 30 20 10 0 CY RO USA CA EE SK MT BG LT SE HU SI USA NY JP ES IT LU DE CZ EL DK NL AT LV UK PT FR PL BE FI IE OECD baskets for PSTN, 2007 SOHO business basket Euro per month, VAT excluded 60 50 Fixed Usage 40 30 20 10 0 USA CA HU RO USA NY EE SI DE LT EL DK LU BG SK ES NL LV AT SE PL PT MT FI CZ BE IE JP FR CY IT UK Source: EU Implementation Report 13 4.2 Regulation of the broadband Internet market Broadband Internet services in Hungary began to spread from the year of 2000 on. In 2000, Magyar Telekom, the most significant Hungarian incumbent service provider (at that time MATÁV) launched its ADSL service in addition to the already existing cable modem service. ADSL very soon became the dominant broadband technology, keeping its leading place in the market up to the present time. As opposed to numerous Western European markets, competition appeared in the retail ADSL market already at the very beginning.
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 and 42: 38 39 Figure 3.15: Changes in the n
Page 43 and 44: 40 41 Figure 3.18: Cable television
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: 48 49 gated price index) above the
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

The Hungarian Communications Market Developments and ...

Create successful ePaper yourself

Delete template?

Save as template?