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DIGI Building Market Position Despite Keeping Cards Close

Although DIGI’s debut as a Hungarian mobile service provider is still to come, its strategy suggests it is aiming for a cross-market leading position. For now, however, it is keeping pretty tight lipped.

“As far as the launch date of DIGI’s mobile telephone service is concerned, I am not in a position to give you any further information but to say that our staff is working very hard to make it happen within the shortest possible timeframe,” Annamária Kállai, marketing manager of the company told the Budapest Business Journal.   

As Balázs Révész, marketing director of Vodafone pointed out in an earlier interview with portfolio.hu, the long-awaited debut is expected to take place in Q1 of next year. However, on the basis of the network developments performed thus far, it seems that Digi’s network will not provide the same experience as the other three service providers. Digi’s network may only be used by handsets capable of 4G and through LTE networks, and the service will operate mostly in the major cities, as opposed to the whole country.

DIGI acquired mobile frequencies in two chunks in September 2015 and June 2016, respectively, for a total of HUF 10.248 billion, and so it now owns 5% of the mobile frequencies in Hungary. But the market was kept in the dark for a long time about how and for what purpose the company would use its new assets. 

Now that a concrete launch date is inching closer, the BBJ had hoped to gain an insight into whether the above-mentioned claims concerning the restricted scope of the mobile service were correct, and if so, how customers would be lured into migrating to DIGI in spite of all those technology- and geography-related limitations. Sadly, however, our questions were unanswered.

A law effective as of October 24 this year might boost DIGI’s chances to attract mobile clients by providing more flexibility.

According to the new legislation, any fixed-term retail subscriptions not involving the purchase of a handset may include a maximum loyalty period of 12 months instead of the current 24 months. And upon the expiry of that period, service providers shall also be obliged to effect technical modifications to allow the customer to use devices with SIM cards of any provider.

A Struggle for Mastery

Whilst DIGI is still only preparing to enter the stage when it comes to mobile telephony, in other market segments it has decided to go take an easier route to building out more dominance; namely, its purchase of Invitelʼs retail and small business branches in July.

“We are very happy that we can further grow in Hungary,” noted Serghei Bugac, CEO of DIGI Communications N.V. “This strategic investment allows us to extend our areas of service a great deal.”

The strategic significance cannot be doubted for a second. According to the latest statistics of the National Media and Infocommunications Authority (NMHH), the combined share of DIGI and Invitel would propel the buyer from fourth spot to second in the field of landline phones and from second to number one in the cable TV competition.

As for broadband internet, DIGI will land in second position, advancing from third.

“We are awaiting the approval of the competition authority and the deal should close in Q1 2018, only after securing that approval,” Kállai added. “It will be up to that decision how soon and in what way the integration would be possible. The plan is to continue Invitel’s network developments and start planning the harmonization of the networks of the newly acquired business with our own.” 

Bulgac added: “Invitel’s network developments done so far and scheduled for the near future suit DIGI’s strategy that builds on future-proof optical networks perfectly.”