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Hungary Case Study

The telecommunication sector in Hungary has been evolving at a steady pace since the political changes in the early 1990s, and Hungary now has one of the most developed telecommunication networks in Central and Eastern Europe. The country is a signatory to the 1997 WTO Agreement on telecommunications and is gearing up for European Union Membership by the year 2002. The Internet market in Hungary has benefited from the overall growth of the telecommunications sector: the total number Internet users has more than doubled over the past two years, from under 300,000 in 1998 to 715,000 in October 2000. The growth of the Internet has mainly been driven by demand in the academic sector, where the Hungarnet network now serves between over half of the market, i.e., 350’000 and 400’000 users. The commercial market has also grown in recent years, albeit more slowly than the academic sector, reaching some 152’000 dial-up subscribers by April 2000. The main barrier to the development of the Internet in Hungary has been the high local call tariffs. The incumbent operator, Matav, still maintains a monopoly over long-distance and international calls, and has a market share of more than 75% over local services. A mission to Hungary was carried out in October 2000 involving Tim Kelly and Lara Srivastava of the ITU, and was co-ordinated in conjunction with Jozsefne Pergel of the Hungarian Communication Authority (HIF). Preliminary recommendations have been submitted to the HIF for comment.