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Telecom service tariffs to rise next year

Telecom service charges will increase next year for millions of subscribers, often at a higher extent than justified by the two-percentage-point VAT increase, the daily Nepszabadsag said on Friday.

Service providers are raising prices for the second time this year after no price rises in the past ten years.

The companies cite inflation and changes in market conditions, but there are also views saying that this is only a form of passing on the so-called crisis tax imposed on the sector last year for a temporary three years.

According to a summary published by the Hwsw.hu news portal site, Magyar Telekom’s monthly fees are increasing between HUF 260–760, while mobile phone per-minute call charges are rising an average HUF 2-3. When interviewed by the portal, U% and Invitel said they are only passing on the effect of the VAT rise. Vodafone and Telenor have not been able to provide information as yet on next year’s tariffs.

The number of subscribers and subscriber spending have been declining for more than 18 months, while fee payment discipline is deteriorating as well, the daily wrote. Service providers have been reporting falling revenues and profits every quarter this year. Although every company has carried out cost-cutting measures, they have tried to avoid major lay-offs. At the same time, expensive network development continues and telecoms must pay the crisis tax - HUF 61bn per year at sectoral level, the paper said.

Some elements of telecoms’ expenses has dropped, however, such as a reduction of termination fees announced by the national media and telecom authority in September. Earlier, when the market was on the rise, the companies had passed on similar reductions to the consumer, the daily noted.