Hungary Eying big ROI From 5G Network Investments

The 5G mobile network is currently being rolled out across the country. As you would expect, technically, it surpasses the existing 4G network and offers a leap forward in terms of speed and a significant reduction in response time. Overall, this allows many more devices to work together within the new industry standard.

With home office and even homeschooling likely here to stay (at least in part), a fast and stable internet connection and indoor coverage have become more crucial to people than before.

Restrictions during the coronavirus pandemic played a significant role in the fact that the implementation of the technology has slowed down somewhat.

All three major providers are involved in 5G network development in Hungary. The most advanced data transmission technology is now available in Budapest and several large cities, including Debrecen, Kecskemét, Szeged, and certain parts of Szombathely as well as at and in the vicinity of the ZalaZone automotive test track in Zalaegerszeg.

Magyar Telekom (MTel) was the first Hungarian service provider to launch its 5G service and is also the first in Hungary to use Ericsson Spektrum Sharing technology in its live network. Thanks to this, it can offer significant capacity expansion to customers using the 4G network in the affected locations, in addition to 5G coverage. (Multiple devices can connect without degrading service quality).

As the data traffic is huge during the peak summer holiday period, MTel has also been deploying 5G networks around Lake Balaton.

Outdoor Service

Although MTel introduced the first operating 5G station, it was Vodafone that was the first to launch an outdoor service in late 2019 in some parts of downtown Budapest. By March 2021, the service provider’s 5G network covered almost the whole of Budapest and several county seats.

Telenor obtained the frequency required for the commissioning of 5G at the 2020 NMHH frequency auction, and in 2021 it also successfully bid in several frequency ranges at another frequency auction. As a result, the company says that hundreds of 5G stations will be available countrywide by the end of this year.

The implementation of 5G is crucial as it can be used to create much more efficient, faster, and more secure processes. Several projects have been launched in Hungary to test the potential of the system.

Following a six-month test period which ended this month, the country’s first industrial 5G private network will continue to operate live at Taiwanese multinational electronics contract manufacturer Foxconn’s factory in Komárom (93 km northwest of Budapest by road). Solutions specifically tailored to the company’s needs and the construction of the 5G infrastructure were implemented with the help of Ericsson and Vodafone Hungary.

The private LTE and 5G market grew by 30% last year, according to information by Ericsson. This trend is expected to continue in the future, with ever more market players choosing to deploy private 5G networks.

By 2030, the number of wireless modules in factories could reach 4.7 billion, and this connectivity will usher in a new era in manufacturing, the Swedish-based multinational networking and telecommunications company says.

Research Potential

Researchers at the Budapest University of Technology and Economics (BME) are exploring the potential of 5G in partnership with Ericsson and Magyar Telekom on a purpose-built network the partners set up on campus at the end of last year. This will operate both indoors and outdoors in the BME I building, as well as in the research laboratory of Ericsson’s R&D center.

It means that research engineers can try applications, use cases, and features that are not yet available on a live network. Testing of software under development can thus be started at an early stage, which significantly speeds up the market entry of an application.

According to a recent study commissioned by Ericsson, one of the most important players in the field of 5G technology developments, this technology could make a net contribution of EUR 2.3 billion to the Hungarian economy in the coming years, significantly supporting reconstruction after the coronavirus crisis.

The analysis identified four main areas where the use of 5G will bring about significant benefits. One field that will most likely benefit enormously from the introduction of 5G in Hungary is agriculture.

Here, an added value of HUF 585.4 billion could be realized from an investment of about HUF 109.1 bln with a return of more than five times, the Ericsson survey finds.

This will come primarily from precision agriculture through grid-connected drones and sensors and from the proliferation of fixed wireless internet access (FWA); 5G can also be used to build broadband internet access in more remote rural areas in a cost- and energy-efficient way, the study says.

Huge benefits and returns are also expected in the field of smart industry, where an investment of HUF 154.1 bln could result in a return of HUF 416.5 bln, and in smart cities, where analysts predict HUF 91.4 bln in added value. The latter will come from, among other things, smart mobility solutions with networked vehicles or smart stadiums equipped with 5G networks and virtual or augmented reality.

This article was first published in the Budapest Business Journal print issue of June 18, 2021.