Consolidating Telcos Battle Challenges as Data Thirst Grows


Zoltán Dávid, chief strategy officer at Yettel Hungary.

The consolidating Hungarian telecommunications market is shaped by a handful of drivers mainly fuelled by technological advancement, changing customer behavior, and global economic challenges. The Budapest Business Journal investigates the most prominent factors shaping an industry with four leading players: Magyar Telekom, Yettel, Vodafone, and Digi.

Mobile data usage has seen constant growth in recent years, and this increase is likely to continue. This demand has been supported by the gradual rollout of fifth-generation coverage and services, which has paved the way for unlimited mobile internet offerings.

“This [demand] is one of the key reasons we have invested heavily into the 5G spectrum and modernized our network to be fifth-generation capable,” Zoltán Dávid, chief strategy officer at Yettel Hungary, tells the BBJ.

“Additionally, we launched Prime tariffs this year that offer unlimited mobile data to our business-to-consumer and business-to-business clients. Similarly, our Otthonnet and IrodaNet Pro packages offer unlimited home and office internet connectivity, respectively, via our 5G network.”

Like virtually every other sector, the telecommunications market has been heavily affected by climbing inflation and energy costs, which makes the service offering of telcos more costly while increasing unpredictability in their business plans. Such an environment pushes enterprises to reassess their operations and establish how they could run more efficiently and cost-effectively.

“Here we are focusing on running our networks, via our infrastructure partner, as energy-efficiently as possible and finding creative ways to reduce our energy usage in other parts of our business,” Dávid says.

The market has undergone quite some change in the past year. In early 2022, Telenor rebranded as Yettel. At the end of the summer, international telco Vodafone agreed to sell its local Vodafone Hungary operation to listed information technology firm 4iG and state-owned Corvinus. Under the agreement, 4iG will acquire a 51% stake, while the state will own the remaining 49% when the deal closes at the end of this year, as per expectations.

Customer Focus

“We also see consolidation in our market. However, our focus is our customers; we strive to continuously understand their needs to optimize our business, including communications, products, services, and customer handling processes,” Yettel’s Dávid says.

Trends have shown an increasing tendency to bundle mobile and fixed services as customers require affordable packages with reliable network connectivity, with high speeds and low latency.

“With our unique asset and position, we believe we can offer anexcellent customer experience onthe go and at home with the help of5G. In addition to offering exceptional download rates, theinstallation of our home internet issignificantly easier than that of fixed players. This is a new opportunity forus to move into the fixed segment that we haven’t done in the last 20-plus years,” Dávid explains.

A market survey by the National Media and Infocommunications Authority (NMHH) published in mid-August showed that the four biggest local mobile telco service providers had all raised the prices of their basic packages during the first half of the year but also increased the service offerings for those packages.

What are the most significant novelties for customers, though?

“On the residential side, we have launched unlimited 5G mobile data with our Prime tariffs, 5G for the home via Otthonnet Pro, telco payment via YettelPay, new services such as e-transport tickets in our Yettel Wallet, as well as enhancing our insurance product lines, now covering not only mobile phones but also smartwatches and other accessories,” Yettel’ chief strategy officer says.

Business customers of Yettel have also seen unlimited mobile data and office 5G internet connections via Prime and IrodaNet Pro.

Efficiency is All

“Efficiency is becoming highly important for our B2B customers in the current economic situation, which we are supporting with our mobile private networks (MPN) and NB-IoT [narrow band internet of things] services,” Dávid adds.

In the first quarter of the year, Yettel delivered the fastest median download speed at 50.62 Mbps, according to Ookla’s Speedtest Global Index. Magyar Telekom came second with 45.07 Mbps, followed by Vodafone’s 24.83 Mbps and Digi’s 6.75 Mbps.

In terms of median latency, Vodafone and Yettel had the lowest latency at 20ms each, closely followed by Magyar Telekom’s 21 ms. Ookla’s consistency score placed Magyar Telekom at the top of the list with 90.6% consistency (showing at least a 5 Mbps minimum download speed and 1 Mbps minimum upload speed). Yettel came second with88.2%, followed by Vodafone’s 87.7% and Digi’s 63.8%.

Based on median country speeds measured by Ookla in September 2022, Hungary ranked 44th out of 139countries, falling back one position compared to the preceding month, with 43.34 Mbps download and 13.66 upload speeds and 23 ms latency.

Regarding fixed broadband speeds, Hungary ranked 22nd, three places up month-on-month, out of 181 countries globally, with 111.26 Mbps download and 28.74 Mbps upload speeds and 9 ms latency.

“Hungary is traditionally among the forerunners in mobile networks (coverage, new technology deployment, and data speeds) not only in the Visegrád Four countries and the European Union but worldwide,” Dávid concludes.

Editor’s note: We contacted all the players on the Hungarian telco market for contributions to this article but had received no comment from the others by our deadline.

This article was first published in the Budapest Business Journal print issue of November 7, 2022.

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