Networked Access

Information Infrastructure (Stage 4)

Communications cost is almost twice as high as that of the EU-25 average and Hungary has a robust and high-quality telecom infrastructure. The Hungarian telecom market is one of the most advance and regulated in the region with many investors (such as Deutsche Telekom, Telenor and Vodafone) shows the interest of the sector. The European standard telecoms infrastructure is readily available throughout the country both mobile/fixed line and internet. Mobile phone penetration is above 101% and Hungary is linked to the international fiber link network. Dial-up internet traffic is gradually being replace by broadband (xDSL, cable), with1.325 million subscribers in 2007. Internet penetration in Hungary is expected to reach 40% by 2011 (up from 30% in 2006) and broadband penetration is estimated to increase to 18%. There are some 230 internet providers in the country, but the following larger providers control 90% of the market: T-Mobile, Invitel, UPC, Enternet, Freestart, GTSDatanet, Tvnet, Inet.net, Euroweb and PanTel. 2.1

The Hungarian government has set aside Ft290 (US1.7bn) for 2007-13 to develop the country's internet infrastructure. The Hungarian government main focus is to provide broadband internet services to areas that do not have them and provide tax incentives to companies to increase broadband access in those areas. 2.2


Internet Availability (Stage 3)

Hungary internet services continues to grow, driven by the low demand of fix-line voice. SLA for the fix-line accounts has reached its end, making the way for ADSL+ services to be provided as the market develops. The increase presence of cable operators has made cable broadband widely available. Broadband access has experience significant growth as regulators reduced tariffs and provide wholesale systems for small market alternate operators. Both cable and fix-line operators provide triple play services; and smaller cable operators have launched digital services and the country’s DTH market is shows signs of life following the introduction of services by a Romanian DTH operator.
Hungary ranks 21st among EU in broadband penetration but continues to increase from 16.3% in 2008 18.7 % in 2009; both household and enterprise broadband access improved last year and over 90% of the household market has broadband access. Wireless access among laptop users continues to increase from the previous year to 8%, is still less than the EU average. 2.3

The internet is also becoming increasingly available as the populous has slowly gained access to it. The following chart shows that growth of internet usage within the country:

From this chart you can see that the users compared to the population is increasing at a fast rate and shows that the internet is also becoming readily available and affordable.


Internet Affordability (Stage 2)

The high volume of mobile substitutions and migration to cheaper IP cable-based voice solutions decreased fixed line revenues by 5.2% in Q1 2010 and 2009. The migration to cheaper solutions caused a internet revenues to decrease by 0.9% even though the number of broadband customers increased. The growth of satellite TV service offset the negative impact of the internet services with a growth of 18% in the first quarter. The growth of TV customers reached 678,000 by the end of March, while IPTV service also increased.

Although mobile usage increased with declining customers and lower tariff cost mobile revenues declined by 3.0% to HUF 43.7 bn in the first quarter. Also the cut in mobile termination rates effective from January 2010 lowered wholesale revenues. T-Mobiles residential customers decreased in March 2010, this was due inactive customers and cancellation of multiple SIM cards by customers. T-Mobile clearly remains the market leader with market share of 44.3% while the mobile broadband market continues growth with residential customer increase by 84% to exceed 357,000. 2.4

According to filolog.org, the cost of living shows that internet is approximately between 6-12,000 forint, or about 24-28 Euros per month, or about 33-39 Dollars per month. 2.5


Network Speed and Quality (Stage 4)

Currently, there are five Internet Service Providers in Hungary, with only one that currently has a dedicated service. Basic dial-up services are the norm throughout Hungary still and the growth towards broadband is slow. Netaway is the only ISP that carries DSL and frame relay according to thelist.com. There are even more services that are used by neighboring countries and within the EU that are available to the citizens of Hungary with varying speeds, such as dial-up and up to 6mbps broadband.

Company

Dial-Up Services

Dedicated Services

Access123.net 28.8, 33.6, 56K
Comser Srl 28.8, 33.6, 56K
Dialer.net ISDN, 28.8, 33.6, 56K
Microsystem Kecskemet Ltd. ISDN, 28.8, 33.6, 56K
Netaway ISDN, 28.8, 33.6, 56K Frame Relay, DSL
Hungarnet 64, 128, 256, 512 and 1024 kbps lines ATM 30, 155 Mbps, FDDI 100 Mbps
Sulinet ISDN, 64 kbps, 512 kbps 4.5 Mbps (through Hungarnet)
Tvnet Foreign link: 256k
Euroweb 1.5 Mbps (Cable & Wireless), 4 Mbps (KPNQwest)
Datanet managed nx64 kbps (up to 2 Mbps) lines Frame Relay, 1,5 Mbps (UUNet) and 1,5 Mbps (Global One)
Elender 64k-128k 6 Mbps, 2 Mbps
Banknet 14 Mbps
Antenna Hungária 512 kbps, satellite (Sprint, USA) 4 Mbps, terrestrial (EBONE, Europe)
Interware 512 kbps leased line 1 terrestrial link, 2 Mbps (KPN-QUEST, Amsterdam)

References: 2.6, 2.7

Hardware and Software (Stage 3)

Hungary leads the Central and Eastern Europe in hardware production for computer assembly and communications equipment manufacturing. In 2009, the sector accounted for 13% of manufacturing output, 19.1% of total manufacturing exports and 6.51% of industrial employment. (Source: Hungarian Central Statistical Office)

The IDC has reported that all subsectors of the hardware market have experience their worst output in 2009 with slow recovery expected in most subsectors. Desktop computers sales fell by 31% in 2009 to 130,000 pieces lowing the market value of HUF 19.5 billion (down by 32%), mobile computers also dip to 423,000 pieces worth 56,4 (down by 11.2%). And finally the server market fell by 20% to 12,800 pieces lowering their market value to HUF 8 billion.

Data Storage system market share decreased by 13% to 9.1 bn HUF while capacity increased by (11% in 2009 to 7,500 TB). Network equipment market slightly shank to 4.5% to HUF 70 billion in 2009 with growth expected in the following years. The economic downturn also caused Smart handheld market share to decrease by 31% to a value of HUF 21.5 billion but expected to recover in 2010.

PC penetration in Hungary has been continuously improving over the past years: today the penetration rate exceeds 52%, meaning that a bit more than 2 million households use nearly 2.5 million PCs. (Source: IT Business & BellResearch) Internet penetration is 59.3%, i.e. about 5.9 million people used the Internet at the end of Q3 2009. (Source: internetworldstats.com) It is important to note that Hungary registered the 4th largest growth in Internet usage in 2009/2000 in the EU-27 (above 700%).

The Hungarian market for PCs and related hardware, software and services is small, but offers vendors and consultants high rates of growth. The computer hardware market generated total revenue of US$1.6bn in 2008.

In 2007 (the latest data available) net sales of all PC-related activities by Hungarian firms and foreign subsidiaries was Ft588bn.

PC ownership is expected to rise to 581 per 1,000 people in 2014, from an estimated 397 PCs per 1,000 people in 2010. Demand will be boosted by rising income levels (once Hungary posts a stronger recovery from 2012), falling prices for Internet use and government initiatives to encourage increased take-up.

Reference: 2.8

Service and Support (Stage 2)

The service and support in Hungary is collectively comparable to the rest of the European Union. They have IBM and Microsoft support centers located in the country. They are also part of the European Union’s new Enterprise Europe Network. This network offers support and advice for businesses across Europe and helps in creating opportunities. The services are specially designed for small and medium enterprises. They are also available for research centers and universities throughout Europe. Hungary is also in pursuit of creating a IT-mentor network and has a significant investment that will require the municipal level to make changes in E-Government. 2.9, 2.10