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HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

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BUSINESS JOURNAL BUDAPEST

VOL. 25. NUMBER 7

3

APRIL 7 – APRIL 20, 2017

.hu

www.bbj

Budapest

Business Journal

2017 April 20, | April 7 –

port al Re SpeTelci ICT ecoms and

ion14 e Data Collect logy to Improv 16 use M2M Techno a Parking Place Aiming to Help Find the IoT to Innovation 18 Hungarian d for Cloud unication Over M2M Comm to Boost Deman EU Funding Changes to

e Hungary’s thre ce bra major telcos the for themselves even I arrival of DIG e the way as they pav works net toward 5G

SPECIAL REPORT

Telecoms and ICT SPECIAL REPORT

Will DIGI Disrupt Mobile Market Shares?

The local mobile telco industry has been in stalemate for a long time in terms of market positions and rates.

DIGI’s emergence as a fourth player is bound to shake things up at last.14 SPECIAL REPORT

Boosting Speeds and Paving the way for 5G Telcos in Hungary are busy developing their existing networks to smooth the eventual transition to 5G. They are conducting some promising experiments in their laboratories, reaching higher speeds than ever before. 17

Diversity, Understanding and Embracing Competition

BUSINESS

Economy to Stay on Track While EU Funds Last Hungary’s economy is much more reliant on EU funding than others in the CEE; economic performance looks assured only as long as it keeps

coming, GKI says.8

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SOCIALITE

Contemporary Hungarian Design Discovering and celebrating the best of modern Hungarian design that is playful, emotional even, yet beautifully crafted.20

L RE SPECIA

PORT

Telenor CEO Alexandra Reich talks to the Budapest Business Journal about her management style, the highly-competitive Hungarian telco market, and her vision for the future here.13 NEWS

Still Friends After Brexit The strong relationship between Hungary and the United Kingdom will not end with Britain’s withdrawal from the European Union, the U.K.’s Ambassador Iain Lindsay told a press conference at the British Embassy on March 30.6

2017. 04. 05. 16:48

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Budapest Business Journal | April 7 – April 20, 2017

BBJ

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall NEWS EDITOR: Christian Keszthelyi EDITORIAL STAFF: Zsófia Czifra, David Holzer,

Levente Hörömpöli-Tóth, Gary J. Morrell, Claudia Patricolo, Rob Smyth, Sarah Sunday, Noémi Titz, Ágnes Vinkovits.

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News Services Hungary A.M., Energy Today, Regional Today 1 year, from HUF 179,000+VAT 6 months, from HUF 104,900+VAT 3 months, from HUF 58,900+VAT Book of Lists 2016-2017: HUF 19,120+VAT DigiBOL HUF 39,900+VAT Call +36 1 398-0344 or email circulation@bbj.hu What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential.

F

or nine months, the U.K.’s Ambassador to Hungary, Iain Lindsay, has been asked any number of understandable Brexit-related questions, not least what will happen to EU citizens living in the United Kingdom, and U.K. citizens living in the EU, post-Brexit. Equally understandably, the ambassador has only been able to give variations of the same reply, which is (and I paraphrase brutally here, of course) that nobody honestly knows until the negotiations have been completed and the details of the separation voted on and agreed by all parties. Anything else has been speculation, informed or otherwise.

As we report on page six, at last, nine months and one day since the Great British public unexpectedly voted to walk away from the European Union, he had an opportunity to say something different. Not a great amount more, it has to be noted, because that catch all caveat of negotiations and agreement still applies, but at least he could now confirm that Article 50 had been evoked, and the countdown to de-coupling begun.

We also know the priorities from the British side. Ambassador Lindsay said his government “had made it very clear the rights of citizens should be at the heart of discussions” and added that British Prime Minister Theresa May “wants to see early agreement regarding the rights of EU citizens in the U.K. and British citizens working in other member states”. Another key priority will be the post-Brexit border between Northern Ireland and the Republic of Ireland (“we do not want to see a return to a ‘hard’ border”), while yet another will be to see negotiations on a “bold and ambitious free trade agreement” running in parallel with talks on the exit from the EU, although European negotiators have since indicated they will want to see progress on the latter before starting the former.

The process will surely be difficult, though the embassy has been cheered by the support offered by the Hungarian

government, and most especially by its approach that the separation must be good for both sides, because both sides will continue to need each other long after April 1, 2019. ************** The government’s determination to press ahead with its amendments to the higher education act continues to disconcert, not least because of the way it seems, whatever the government says to the contrary, to target what has been a very well-regarded educational establishment: the Central European University. Just how well-regarded is made clear by the ever-lengthening list of establishments and personalities, both in Hungary and around the world, that have come out in support of CEU. Given that various government spokespeople have spent so much time talking about what they keep calling the “Soros University”, and attacking the establishment for its lack of compliance with the law (the law in question being not the existing law, but the revised law it used its majority to pass through Parliament on Tuesday afternoon), you cannot help but come to the conclusion that this has very little to do with education reform, and a lot more to do with the government’s antagonism towards the CEU’s founder, George Soros.

Hungary’s PM Viktor Orbán has proven time and again that, in the court of public opinion, he places very little store by what the world thinks or says about him; what matters is the opinion, and votes, of Hungarian citizens. But the CEU case should concern him, because whether it is true or not, his government has given the impression of targeting the university, and that is exactly the sort of approach that is most likely to spook investors, just at a time when they are returning to the markets.

Fortepan.hu / György Klösz

LaMography / Moni Lazar

The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress.

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BREXIT COUNTDOWN and CEU Confrontation

THEN & NOW

BBJ-PARTNERS

Originally opened in 1837, the People’s Theater (later the National Theater) could be found at the junction of Népszínház utca and Rákóczi út (later Blaha Lujza tér) for long years, and is shown in this sepia picture taken in 1893. The current home of the National Theater (shown in the color photo) is on the banks of Danube in District IX, where it was opened on March 15, 2012.

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2017. 04. 05. 16:49

1

News

1 News | 3

///macroscope

Industry Slowly Gets Back to its Feet

There was a moderate increase in Hungary’s industrial output in February, which seems to justify the optimistic expectations caused by the steadily improving purchasing manager index.

ING Bank drew attention to the fact that, unlike in the previous month, the calendar effect uplifted output volume due to the leap-day in 2016. The significant difference caused by a single day shows that production capacities (especially in the manufacturing sector) are running at full capacity.

Weak Retail Figures

ZSÓFIA CZIFRA

A

fter all-but stagnating in the first month of the year, Hungary’s industry finally started to show vital signs, the latest figures published by the Central Statistical Office (KSH) reveal. February’s production jumped a seasonally and working-day adjusted 3.4% from the previous month.

According to raw data, the volume of industrial output was up 2.7% on a year-on-year basis, while adjusted for working days, the increase was 7%.

The difference is mainly caused by last year’s leap-day effect. In the first two months of the year, output was 4.5%

“It is specifically promising that industrial output grew [a seasonally and workingday adjusted] 3.4% from the previous month.” higher than in the same period of 2016.

The 3.4% monthly increase is not so surprising if we look at the course of the purchasing manager indices in the past few months. Hungary’s manufacturing purchasing manager index (PMI) rose 2.5 percentage points to 59.5 in February 2017, and albeit it decreased somewhat in March, still

BBJ_2507_news.indd 3

stood at 56 points. The improving PMI might indicate a dynamic rise in the manufacturing sector, which could ignite industrial performance. However, the performance of manufacturing has not been in line with the PMI for some time – the gap between the two figures started to widen in 2016 –, which might give reason for more cautious optimism.

Above Expectation Nonetheless, analysts said industry was kick-started into action in February in their reactions to the KSH data, all agreeing that performance was above expectations. “It is specifically promising that industrial output grew [a seasonally and workingday adjusted] 3.4% from the previous month,” said Takarékbank analyst Gergely Suppan in a press release.

According to the KSH preliminary report, output was driven by the chemical industry and the manufacturing of IT and electronics goods, while vehicle manufacturing basically stagnated. Suppan also noted that business sentiment and purchasing manager indices both in Hungary and in Europe forecast a livening of the industrial sector. Due to the low base of last year, paired with new capacities

While the stronger industrial output might balance the weak performance of the retail sector (retail trade in February was only 1% higher on a yearly basis, which is a setback compared to the previous months), there is no reason to expect dynamic growth in the Hungarian economy in the first quarter. opening in the food and tire industry, this could result a full-year growth of 4-4.5% in industrial production. More noticeable acceleration can be seen in 2018, with the deployment of new capacities in the automotive industry, Suppan concluded.

Péter Virovácz, head analyst of

While the stronger industrial output might balance the weak performance of the retail sector (retail trade in February was only 1% higher on a yearly basis, which is a setback compared to the previous months), there is no reason to expect dynamic growth in the Hungarian economy in the first quarter, Virovácz warned. For the coming months, however, he does not rule out the possibility of further acceleration in the industrial sector.

Following several months of jiggling performance, industrial production finally seems to be more stable, said Gergely Ürmössy, head analyst at Erste Bank. Although detailed figures will only be published on April 11, Ürmössy assumes that the better performance was mainly caused by a livening automotive industry, including the improving performance of suppliers in the sector. The PMI also indicates that the boom in industry will continue in the coming months, Ürmössy noted. For the full year, he expects an

increase of

3-4%

, which means that industry would have noticeably contributed to gross domestic product.

Numbers to watch in the coming weeks The macro calendar will not be crowded in the upcoming two weeks: KSH will publish the first estimate of external trade in goods for February on April 7. On April 11, we will find out whether inflation continued rising in March, after a 2.3% and 2.9% increases in January and February, respectively. Detailed data for the February industrial performance will also be released on April 11, followed two days later by the February construction data, also a good indicator for the overall performance of the Hungarian economy.

2017. 04. 05. 16:49

4 | 1 News

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Budapest Business Journal | April 7 – April 20, 2017

Healing the Soul as Well as the Body it is going to change the life of the whole family. It affects the parents and the siblings, and also their relationship. That is why we consider it extremely important to offer programs to the closest family members as well.

Hungary’s Bátor Tábor provides camps at its base in Hatvan throughout the year for chronically ill children and their families, totally free of charge.

Thanks to the activities organized, “children become children again”, as Péter Küllői, chairman of the board, explained to the Budapest Business Journal.

Whenever the camps take place, the idea is broadly the same: Placing children outside of their comfort zone so they can overcome their fears and gather strength to face their illness through a very unique experience.

CLAUDIA PATRICOLO

The foundation has been around for more than one-and-a-half decades. How do you see this period?

We now have nearly 1,000 participants in our camps every year, and this means a huge improvement through time. Since last year there have been some changes, such as the nomination of a new CEO. I think this is something normal for any company, considering that changes are always part of the game.

What are your short- and mid-term plans for the future?

We represent a regional center with children coming from different countries beside Hungary, such as Czech Republic, Slovenia and Poland. Our plans now include strengthening what we are already doing and the development of new programs, in order to also extend the possibility to take part in these camps to all those children who cannot leave hospital due to their medical condition.

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What programs do you organize for the children?

We would like children to become children again through a wide range of activities, including archery, horse riding, rowing and wall climbing. And they do not take part in these activities individually. We like to put them together, building teams, make them work and enjoy time together.

Péter Küllői, chairman of the Bátor Tábor Board.

What is the main rationale of your charity?

Children who have a chronic disease cannot cure themselves completely in hospitals. A total healing means also curing the soul, and not just the body. We do something that goes further than what doctors or teachers can do. And we do it in different places than schools or hospitals.

How many children do you deal with on a yearly basis?

We have grown a lot since Bátor Tábor’s foundation. Now we can count nearly 1,000 participants yearly. We do not do just summer camps, but fall and spring ones as well. Those are also open to the children’s family members. When a child is diagnosed with a serious illness

How can someone support your cause?

We have many supporters nationwide but we would really appreciate having more.

Becoming a volunteer can surely help us.

We currently count on many volunteers who do their best to make things work.

Then there are people running marathons for us such as the Élménykülönítmény [Fun Squad, see Ready to Rumble in the previous issue], a charity sport community that is helping us to raise funds.

Furthermore, people are collecting money from their colleagues, friends, families and they gladly do so because they know it is for a good cause. Another easy way to help is by offering 1% of your tax. There are hundreds of good causes that could be supported this way, ours is one of them, and it takes only a few minutes from your lives. Some might believe it is unimportant or the amount is so little that it wouldn’t make a difference. However, the truth is that little streams can make great rivers.

CHANGE LIVES WITH YOUR 1%!

Help seriously ill children overcome fear and get their courage back!

Offer 1% of your income tax and help change lives affected by cancer and other serious illnesses.

Tax identification number: 18107913-1-41

www.batortabor.com

BÁTOR TÁBOR FOUNDATION >> BACK TO LIFE Therapeutic recreation for children with serious illnesses.

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2017.03.14. 10:15:22

2017. 04. 05. 16:49

1 News | 5

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

Consultations Between AmCham and Government Continue Minister of Foreign Affairs and Trade Péter Szijjártó met with members of the American Chamber of Commerce in Hungary (AmCham) at a business forum in order to discuss the most pressing matters relatedto Hungary’s competitiveness.

LEVENTE HÖRÖMPÖLI-TÓTH

AmCham has been working closely with the Hungarian government to enhance the competitiveness of the country since 2014. Before the forum at the Budapest Marriott Hotel on March 24, the minister met with an AmCham delegation to discuss proposals that came out of the second Business Meets

“We want to move from the concept ‘Made in Hungary’ to ‘Invented in Hungary’. We want to become a more favorable destination for R&D; therefore, the incentive systems will be altered.”

Government Conference in September 2016, mainly about an investment-friendly business environment, R&D, innovation, digitalization and labor market.

As Szijjártó said later at the forum, some of the suggestions have already been implemented, including potential game changers like the radical cut in the corporate income tax down to a record EU-low of 9%. “This should help enhance

our competitiveness, especially against players from across the ocean with the new protectionist American economic policy in place,” he said.

He listed four specific topics of priority on the agenda. Firstly, the national economy should step into a new dimension. “We want to move from the concept ‘Made in Hungary’ to ‘Invented in Hungary’,” he said. “We want to become a more favorable destination for R&D; therefore, the incentive systems will be altered.” Accordingly, companies will be eligible for grants based not only on the number of jobs created, but also subject to the level of technology installed. R&D investments in Budapest would qualify for funds as well, not only those in the countryside.

Another key requirement for change is a predictable tax environment. “The fact that the budget and tax laws will be voted on

in a bundle as early as in June is meant to make a difference,” Szijjártó stressed.

Labor Mobility More measures are needed to tackle problems related to the labor market.

“Unemployment can be challenged from both directions, in terms of quantity and quality as well,” the minister noted.

Improvement should come from related tax benefits concerning labor mobility by subsidizing housing costs or building dormitories, whereas cutting social contributions for employers should have the same positive impact. The widespread introduction of the dual vocational training concept, built on the German example, is expected to deliver further results.

In addition, digitalization should be combined with manufacturing in order to raise productivity. That purpose is served by cutting the internet tax to 18%, and access to high-speed internet across Hungary by 2020, which “puts the country ahead of most of Europe”, Szijjártó said.

Lastly, the potential impact of Brexit was discussed. “We want a fair Brexit – neither hard, nor soft,” the minster highlighted.

The goal of the Hungarian government is to keep economic cooperation running and to have the rights of EU citizens safeguarded. “We don’t want to see the British punished. If they leave without a fair deal, they may sign new free trade deals, and the EU might end up in the backrow,” Szijjártó concluded.

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09.03.17 08:19

2017. 04. 05. 16:49

6 | 1 News

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

Hoping for ‘Pragmatic, not Emotional’ Brexit Negotiations The strong relationship between Hungary and the United Kingdom will not end with Britain’s withdrawal from the European Union, the U.K.’s Ambassador Iain Lindsay told a press conference at the British Embassy on March 30.

ROBIN MARSHALL

“Britain and Hungary have shared common interests for many years; those shared interests have been fundamental to the relationship,” Lindsay said in answer to a question from the Budapest Business Journal. “Hungary has made it very clear, particularly in what foreign minister Péter Szijjártó said ADVERTISEMENT

Minister for Foreign Affairs and Trade Péter Szijjártó shakes hands with British Ambassador to Hungary Iain Lindsay on March 30 on the sidelines of an economy conference organized in Budapest’s Boscolo Hotel on labor shortage. (MTI/ Szilárd Koszticsák)

this morning, that they want to have pragmatic approach to negotiations.”

Hungary has arguably been the U.K.’s most supportive ally since Britain unexpectedly voted to leave a club others in the Balkans are queuing up to join. “Obviously, we welcome the

approach of Hungary’s government since our referendum; we think this has been constructive,” said the ambassador.

He described it as “pragmatic, not emotional” but also made the point that “Hungary is not alone in that regard among the member states”.

With Article 50 finally evoked last Wednesday (March 29), triggering the two-year negotiating period leading to the U.K.’s withdrawal from the EU in April 2019, the ambassador said the United Kingdom was looking both to negotiate the terms of leaving and agree a trade deal securing the future relationship in parallel. “We approach the negotiations in a spirit of constructiveness and respect. We think in those circumstances it is possible agreement can be made on our withdrawal and future.”

Perhaps the issue of most immediate concern to member states such as Hungary is the fate of its citizens working in the United Kingdom (a Reuters article from November 2016 put the figure at around 95,000). The British envoy said this, too, is an area of common interest, given the number of U.K. citizens living in Europe (Migration Watch UK quotes U.N. figures putting the number of British people living in the EU at 1.2 million). “[Prime Minister] Mrs. [Theresa] May has outlined a principled approach that will put the interests of citizens at heart of negotiations and minimize disruption. We hope mutual agreement on the rights of citizens can be reached as soon as possible.” There was, the ambassador said, “No doubt EU citizens have made and continue to make a fantastic contribution to the U.K.”

Future Relationship

The ambassador’s press conference was wide-ranging, touching on issues from the border between Northern Ireland and the Republic of Ireland to the Open Skies agreement for air travel, but much of it was dedicated to negotiating the future relationship. Lindsay made the point that the United Kingdom will not physically move further away from Europe, and nor

BBJ_2507_news.indd 6

will certain fundamental facts change post-Brexit.

“On the first of April 2019, the British economy will still be the second largest in Europe, we will still be one of only two permanent members of the security council of the UN from Europe, and we will probably still be the largest contributor to the Continent’s defense and security.”

If he was making the point that Britain has what it believes to be a strong bargaining position in the upcoming talks, he was anxious to avoid any “them and us” language. “It is in Britain’s interests for the EU to continue to be successful,” he argued. “The EU is an incredibly important market for Britain; nearly half our exports go to the EU. There are other opportunities to explore outside the EU, but we do not see this as a zero-sum game.”

With that in mind, it was in the interests of all that disruption to trade be avoided, he said. The British government has already announced a White Paper that will mean the “acquis”, the body of common rights and obligations that is binding on all the EU member states, will be written into U.K. law “on the day we leave the Union in order to give certainty” and avoid any so-called “cliff edge” for businesses. “It makes no sense, either for the U.K. or the EU, to impose new barriers. Of the other 27 member states, only one does not have a trade surplus with Britain.”

Time and again the ambassador stressed that the United Kingdom was not seeking to hurt the Union. The unspoken corollary to that was the Union should not seek to hurt Great Britain. “Every member state, Hungary included, has issues with the EU. We want the future relationship to be a deep and special relationship…. We did not vote to leave the EU to do member states harm... We will still need that strong relationship going forward. We want the future relationship to be a deep and special relationship; we are going into this process with a constructive and positive attitude: that is the approach we have to take.”

2017. 04. 05. 16:49

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

REAL ESTATE NEWS

1 News | 7

Property Systems Opens A100 Business Center Germany’s Property Systems is continuing to expand its New Work serviced offices network in Budapest with the opening of the A100 Business Center at Andrássy 100.

GARY J. MORRELL

The classical building, built in the 1890s on Andrássy út and originally a prime ministerial residence, currently has around 70 workstations. The next phase of the center on a second level will provide a further 100 workstations.

Andrássy 100 boasts a neo-renaissance facade, while the interior has been designed in what is defined as a modernist style.

Property Systems now has six serviced offices across the city. The company has a strategy of operating in a variety of locations in the Budapest area with the interior design reflecting the various sites and types of buildings from classical Central European to modern. All the New

Work offices provide 24-hour access, flexible reception, technical support and cleaning and catering services according to Property Systems.

Family-owned

Property Systems opened its first New Work complex at the R70 Business Center in Rákóczi út in 2012. A second complex, the Anker Business Center was opened in the central District VI. The BJ48 Business Center, located in a classical protected building dating back to the end of the 19th century on Bajcsy-Zsilinszky út, provides 180 work spaces on three levels. Last year the first phase of the B52 Business Center in Baross utca in the more urban District VIII was opened. Just outside of Budapest, but still within its agglomeration, the company established the Budaörs Business Center Terrapark in Budaörs. Further phases of the different projects are due to complete this year.

According to Hubert Abt, CEO of Property Systems, the projects are financed by the 100% family-owned Property Systems, although it is considering capital investments for further developments. The company calculates development costs as around EUR 1,000 per sqm and aims

for an average 80% occupancy at its centers.

As for future expansion, Property Systems says it aims is to open a further three-five New Work branded serviced offices in locations including Váci út and District XI. “We are in the process of extending the New Work network to Warsaw and we are considering extending to Prague and Vienna,” said Abt.

“We are in the process of extending the New Work network to Warsaw and we are considering extending to Prague and Vienna.”

A100 Business Center.

Positive Investment Climate Expected Last year saw EUR 1.5 billion invested into income-producing assets across all market sectors: 55% was invested into offices; 29% into retail, with 35% of turnover from domestic investors, according to figures presented to the 75 guests at the latest annual CBRE Investment Breakfast.

GARY J. MORRELL

In answer to the question “Who are the most active investors in Hungary in 2017?”, 42% of the invited audience of commercial property professionals said they believed it is the traditional core

BBJ_2507_news.indd 7

The annual CBRE Investment Breakfast.

European investors, and 41% considered it will be domestic investors. “This is a healthy position for the investment market in that more traditional investors are operating in Hungary and it is not regarded as an opportunistic investment market,” said Attila Kovács, managing partner of Horizon Development.

With regard to investment volume for Hungary for 2017, the majority of guests (43%) expect EUR 1.5 bln-1.8 bln.

Most of the guests (67%) indicated that they expect the office sector will attract most new equity this year, compared to 14% who opted for the hotel sector and 8% for retail. “This reflects the lack of new stock in the retail and industrial

sectors and the high supply of office stock that will become available. At least 50% of the new office pipeline will be pre-leased and there are also valueadd opportunities with older stock,” commented Tim O’Sullivan, head of investment properties for Hungary & SEE at CBRE.

Changing Hands The number of votes for the hotel sector was seen as reflecting the 80% occupancy in the hotel market and the 4-5% annual growth in business and tourist nights. Anthony Selman, head of invest properties CEE at CBRE, argued

that every leading shopping center in Budapest will change hands in the next two to three years. Interestingly, 49% of the guests saw student housing as the alternative market sector that will attract the most interest this year.

The issue of construction costs is seen as a major challenge to development in the next two to three years, as 56% of voters considered that rising construction costs present the biggest risk to the Hungarian real estate development markets. This is seen as down to the large number of people who are working in Western Europe, construction company bankruptcies and increasing demand, due to a construction boom. Kovács estimated that construction costs have increased by 15%.

“Poland and Czech Republic are receiving most of the new capital and after these Hungary is the third CEE success story of the year. The political risk for Hungary is now priced in and perceived differently because of the Polish political risk. The perception that the Polish government is very conservative and anti-business makes Hungary look a lot better,” Selman said. “The major institutional investors such as German open-ended funds and big American private equity funds are actively looking at Hungary. The question is: can they find something and compete with the local and more opportunistic buyers who were already ready to come in? We will see some big lot sizes traded this year in Hungary,” he concluded.

2017. 04. 05. 16:49

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Business

Business

Economy Projected to Stay on Growth Track While EU Funds Last

The Hungarian economy is much more reliant on EU funding than other CEE countries, so high economic performance looks assured only as long as it keeps coming, an analysis by economic research think-tank GKI says.

LEVENTE HÖRÖMPÖLI-TÓTH

GKI Economic Research Co., a major domestic think-tank, has published its economic forecast for 2017. The overall conclusion points to the high exposure of the Hungarian economy to EU funds, which heavily influences key economic indicators. The correlation became abundantly clear last year. The growth rate of the Hungarian economy slowed considerably in 2016 compared to the previous two years, growing by a mere 2%, the third lowest rate in CEE. (Only Estonia and Latvia performed worse in the region.)

More tellingly, regional competitors seem to have overcome the dependence on money from Brussels a lot more successfully. Poland and Slovakia grew by around 3% each in 2016, whilst Romania did even better, delivering a 4.8% expansion. In Hungary, investments suffered in a more spectacular manner. Their volume plunged by 15% in 2016. By contrast, across the EU they went up at an average rate of 2%.

Varied Growth Predictions Thanks to the new influx of EU transfers, both GDP and investments are expected to be revitalized this year. GDP is projected by GKI to reach a growth rate of 3.2%, halfway between the projections of the IMF (3%) and the EU (3.5%), and all of them lower than the expectations of the Hungarian government (4.1%). Gross fixed capital formation could soar by at least by 8% in 2017.

As pointed out by GKI, the statistics are favorable through 2018, but there are still no signs of any preparation for the post 2020-period, following

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GDP GROWTH

IN 2016

4.8%

3%

3%

POLAND

SLOVAKIA

2%

HUNGARY

ROMANIA

Deficit to Stay Under Control

SOURCE: GKI

the phasing out of wide-spread EU transfers.

GDP growth has been largely fueled by household consumption and that trend is set to continue. The consumption of households increased by 4.5% in 2016, finally re-acheiving its level of ten years earlier. In 2017, the

As pointed out by GKI, the statistics are favorable through 2018, but there are still no signs of any preparation for the post 2020-period, following the phasing out of wide-spread EU transfers. expansion of consumption is expected to accelerate for what would be the fifth consecutive year. Although the growth of real wages and income will slow down slightly, the growth rate of consumption may accelerate to around 5% due to carry-over effects, the slow increase in net borrowing, and the strengthening of the propensity to buy, GKI says.

Consumption is bound to be influenced

Agricultural GDP rose by nearly 17% in 2016. Given average weather conditions, a decrease of around 5% can be expected in 2017: GKI says the agricultural techniques used in Hungary make performance heavily dependent on weather conditions, and thus very volatile.

GDP in services will increase by about 3.3% in 2017, faster than the average GDP growth or the rate of the previous year. Improvement is mainly expected in business services, of which trade-tourism and telecoms will grow most this year. The financial sector, being the only one that declined last year, is also expected to return to growth in 2017.

Exports of goods and services rose by almost the same rate as imports in 2016. The export surplus contributed to the 2% GDP growth of 2016 by about 0.6 percentage points. The growth rate of foreign trade volume will accelerate slightly in 2017; that of exports more slowly (from 5.3% to 6%), while imports grow faster (from 6% to 7.5%). This can be explained by the fact that, although domestic consumption is accelerating, no improvement can be expected in Hungary’s export potential.

by the labor shortage and current wage policy, as the pressure to raise wages is heating up. With the next national elections due in 2018, this issue will be of even more critical nature.

As far as consumer prices are concerned, the peril of deflation seems to be gone. Price “increases” ventured into negative territory back in 2015, whereas 2016 saw inflation of just 0.4%.

This year is projected to bring about a breakthrough with inflation of 2.5%, according to the GKI estimate. This is not only because of increasing wages, but also due to world energy prices that have been on the rise.

Construction and Automotive Engines of Expansion

GKIʼs overall expectation is that growth will dominate the economy.

The better performance in 2017 is primarily dependent on the automotive industry. A 3.5% increase in production is expected in 2017, in part due to the start of production at the Apollo tire factory. Following its almost 19% decline in 2016, construction will grow rapidly in 2017, by up to 15%, due to expanding EU transfers and an increase in residential construction.

Employment can expect to continue looking good, GKI estimates.

Unemployment is decreasing further, and companies are ready to employ more. There is labor shortage in many areas, and the fear of unemployment among households is at its lowest level in almost 20 years. However, statistics show a much more spectacular improvement in trends due to the increase in foreign employment and public workfare schemes, as well as some methodological changes. If two-thirds of those involved in public workfare schemes are considered unemployed, Hungary’s unemployment rate would be 8.1%, not much better than the EU average of around 8.5%. The official unemployment rate will be around 4.2% in 2017.

According to GKI, the Hungarian general government deficit will be below 3% of GDP in 2017 for the sixth consecutive year, with government debt on a declining path. Although a further rise in spending, and thus in the deficit, can be expected in many areas before the elections, the deficit will remain at around 2.5%, while the government debt relative to GDP will decline by 0.5-1 percentage points, to around 72.8%.

2017. 04. 05. 16:44

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Budapest Business Journal | April 7 – April 20, 2017

Business

|9

Gap-filling Public Management Manual Hits Bookstore Shelves in Hungary Self-help books on business management are common place, but a new case studybased publication outlines methods for how to manage public sector entities successfully.

LEVENTE HÖRÖMPÖLI-TÓTH

A common habit around here is to moan about poor public services, anything from health care to education, for which the lack of financial resources normally takes the blame. However, and perhaps more often than you think, common sense improvements alone can translate into huge gains. A newly-published book entitled “Administrategia” provides evidence by citing real-life cases where

government-run entities have proved they are not necessarily doomed to inefficiency, since applying the right management approach can make a big difference.

“Scholars are very good at pointing out the errors causing dysfunctionality of public administration bodies, but they always fail to give a prescription for the malaise,” Maciej Kisilowski, the book’s co-author and an associate professor of law and public management at Central European University, Budapest, tells the Budapest Business Journal.

Bold governmental strategies can lead to powerful economic revivals.

Take the example of globally successful countries like Ireland or Israel. The Irish positioned themselves as the European headquarters of American companies, the Israelis built up a robust startup culture in which inventions are intertwined with the needs of the military. Of course, strategy is never about a single magicbullet solution, but its components ultimately come together as one convincing story.

Passivity not the Optimal Approach “It’s a myth that passivity is the optimal approach for a public-sector

“…[T]he main idea is to get the message across that economies like those in CEE need to embrace radically new public management approaches to enhance efficiency of the public sector and increase overall competitiveness. This is the only way to make our status as a cheap labor destination history.” career. Our research shows that public managers already intuitively implement some aspects of the strategic mindset,” Kisilowski adds.

The House of Terror, one of the most influential museums in Hungary, is an example of how a unique resource (the building), information technology, and a creative team can be effectively integrated around a strong (if sometimes controversial) vision. The success of the socialist mayor and MP László Botka in Szeged shows, in turn, how a clear selection of priorities – in his case, upgrading communist era apartment buildings – can make a

public manger more successful than one who uses the more traditional “all of the above” approach.

“Administrategia”, however, does not advocate “running government like a business”. It is more about smart adaptation and mutual learning between the public and the private sectors—the learning that can actually be greatly impeded if we subscribe to simplistic “bureaucrats are stupid, businessmen are smart” narratives.

The professor and his co-author, Dr. Izabela Kisilowska of the consulting firm AT Kearney, collect best practices from the region; the work specifically targets CEE. Apart from Hungary, it has already been published in Poland, is in print in Romania and forthcoming in Ukraine, while Czech Republic, Latin America and Central Asia are also on the potential list of places designated for future publication.

“Eventually, there might be an English edition released; however, the main idea is to get the message across that economies like those in CEE need to embrace radically new public management approaches to enhance efficiency of the public sector and increase overall competitiveness. This is the only way to make our status as a cheap labor destination history,” Kisilowski concludes.

EXPERT OPINION

IT Underperformance Across Hungarian Business Results in Almost EUR 500 Million in Lost Productivity Coleman Parkes conducted research on behalf of Epson about the usage of IT systems of small- and medium-sized businesses Miklós Fábián, in the EMEA national sales manager region including at Epson Hungary Hungary. The comprehensive study shows a number of shortcomings regarding costeffectiveness and the office technologies used. We asked Miklós Fábián, national sales manager at Epson Hungary about the reasons and possible solutions.

Do businesses even need to print anything in the time of digital revolution?

More than 38 years have passed since BritishAmerican information scientist, Frederick Wilfrid, first envisioned a “paperless office” in 1978. Today, the reality is that printers continue to be used daily. Furthermore, three-quarters of Hungarian employees consider printing “vital” in terms of helping them work effectively and they print an average of 16 items per day, which is equal to 34 pages daily. Despite digital advances and 50% of businesses now digitizing documents in favor of keeping hard copy records, people still like to work with paper,

BBJ_2507_bus.indd 9

preferring print rather than working on-screen for certain tasks. The major problem is not the usage of printers, but the fact that companies do not use the best printing technologies and solutions.

What is the connection between the strategic approach and corporate IT assets?

Only a bit more than half of businesses in Hungary implement new IT as part of a strategic decision, and prior to purchasing, 44% do not even know how the right technology can affect the organizations’ performance and functionality. Some companies do not use IT in a strategic manner, and could be missing out on considerable savings on print costs and environmental impact reductions.

How much is the financial loss in businesses in Hungary caused by not properly using IT devices?

The results of the survey shocked us.

Businesses in the 14 reviewed countries of the EMEA region use old, inadequate IT technology which has a negative effect on performance, expenses and efficiency as well.

IT systems and hardware failures equate to an annual productivity cost of EUR 497 million. Of this, more than half is attributed to printers, totaling `EUR 231 mln.

What kind of solutions can be considered for cost optimization?

Flexible, project based and collaboration

meaning that small changes to printer type supportive technologies make a huge and fleet structure can deliver a big change to impact on work. In addition to maintenance the bottom line. Replaceable Ink Pack System and downtime issues, further time costs (RIPS) printers help businesses take advantage result from the distribution of printers with of the convenience benefits a localized printer employees walking an average 9.4 meters fleet offer, but with the predictable costs to their nearest printer. This means that of a centralized model – reducing the cost of many businesses still operate a traditional printing by 50% compared to laser technology. centralized print fleet model. This distance Power consumption and waste can be adds up when you consider that respondents decreased by 94-96%. Thanks to the managed print on average 16 items each day. This is an print services; businesses can benefit from issue that could be easily addressed through better control over print volumes and costs. a more localized print fleet model. Modern workplaces and smaller Technologies that are vital to work effectively workgroups are more suited to 74% Printers 76% the flexibility 68% that localized Desktops 69% print models 64% Mobile phones 63% offer, removing 64% frustrations and Laptops 66% time associated 55% Scanners 58% Hungary with the 41% need to leave Total Wearable technology 25% workspaces to 40% Projectors/visual display devices retrieve prints.

36% All of these 40% Wireless technology e.g. wireless mouse, keyboard 46% factors impact 34% Tablets employee 38% motivation and 32% Video technology e.g. webcam 29% productivity, and ultimately business Base: Total Respondents (2400) Hungary (200) efficiency –

2017. 04. 05. 16:44

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Business

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

Perceived Corruption in Hungary Continues to Grow Corruption and bribery in Hungary appears to be worsening, with more executives reporting the presence of such practices, although most claim to have no first-hand experience, EY’s EMEIA Fraud Survey 2017 reveals. The Budapest Business Journal discussed the findings with Ferenc Biró, EY Hungary partner of Business Integrity and Compliance Management, who believes immediate action must be taken to prevent the situation worsening.

CHRISTIAN KESZTHELYI

An outstanding 78% of Hungarian leaders say they believe bribery and/ or corruption happens widely in the country’s business life, EY found based on its research conducted between November 2016 and January 2017, interviewing 4,100 senior decisionmakers in a sample of the largest companies in 41 markets and territories.

The Hungarian figures are higher than the Eastern European average, where 64% of respondents view business life similarly. As far as emerging markets are concerned, the ratio is 61%, while in developed markets, only 36% experience such practices.

“Based on the results of our last eight surveys, we can say that Hungarian executives do perceive a constant growth in corruption and bribery in their businesses, while individually claim not to have firsthand experience,” Biró comments on the findings for the BBJ. “The numbers do not paint a nice picture on how Hungarian business leaders see corruption in the Hungarian economy.

Since 2012, an increasing number of business leaders say that they experience some form of corruption.

In the last five years, their number has

risen by more than 25% [from 58% to 78%],” the professional adds.

Another figure that further casts a shadow over Hungarian business life is that 69% of the respondents say that fear for their own personal safety is a factor that prevents them from reporting on an incident of fraud, corruption or bribery. This is followed by a respective 26% being loyal to colleagues and fearing future career progression at their company, while fearing future career possibilities at other companies is a concern for 14%. “The Implementation rate of mechanisms such as compliance programs, including whistleblowing hotlines, that would allow the gaining

Ferenc Biró, EY Hungary partner of Business Integrity and Compliance Management.

of first-hand information and support prevention and detection continues to be lower than expected,” Biró comments.

However, as far as the ethics of participants are concerned, there appears to be a silver lining to the clouds. Only 18% admitted they were willing to offer cash payments to win or retain business in order to help businesses survive. Hungarians claimed to be willing to book revenues earlier than they should be in order to meet financial targets only in 13% of cases.

Just 4% of the respondents said they would be prepared to provide false information to management to improve their career or pay, while only 5% would be prepared to deliberately misstate a company’s financial performance to meet financial targets; 15% admitted they would be prepared to act unethically to improve their own career progression or remuneration package.

“Based on the results of our last eight surveys, we can say that Hungarian executives do Immediate Action perceive a constant growth Needed in corruption and bribery in In order to stop the business corruption their businesses. [...] In the and bribery from worsening, actions last five years, their number should be taken in the field, EY says, and there appears to be a demand for such. has risen by more than 25% More than half (57%) of the Hungarian [from 58% to 78%].” respondents told EY that they believe prosecuting individuals would help deter

fraud, bribery and corruption, while only 16% believes regulatory activity has had a positive impact on the matter lately.

“We are of the view that unless immediate action is taken, the situation will continue to worsen,” Biró says, noting that each and every stakeholder is responsible for fighting bribery and corruption. Only 23% of the respondents said they had heard senior management communicate frequently regarding the importance of maintaining high ethical standards in the last two years.

Therefore, Biró stressed that the most important task would be that business leaders introduce appropriate compliance systems and mechanisms and establish a “zero-tolerance culture”, which at the same time supports employees coming forward with information and safeguards them from retaliation.

“Simultaneously, leaders need to emphasize the importance of fair and ethical business behavior, even in difficult times and when under pressure to deliver results. Employees alike need to recognize and act upon their own responsibility to stop unethical business practices. Regulators, on the other hand, should support ethical businesses through increasing meaningful regulatory effort and oversight. We believe these are key to sustainable growth,” Biró concludes.

GEORG BASELITZ: FIRSTLY, YOU ARE WELCOME, 2014 © ALBERTINA, VIENNA – BATLINER COLLECTION PHOTO: JOCHEN LITTKEMANN, BERLIN

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PREVIEW WITH REVIEW HUNGARIAN NATIONAL GALLERY, BUDAPEST 01 APRIL – 02 JULY 2017

BBJ_2507_bus.indd 10

PARTNER:

CORPORATE PARTNERS:

PRINCIPAL PROFESSIONAL COOPERATIVE PARTNER:

2017. 04. 05. 16:44

Gruppo T.F.M. KFT. 1068 Budapest, Király u. 102.

1st District

3rD District

5th District

10th District

12th District

14th District

151 sqm – 5 rooms, AlAdár street

51 sqm – 2 rooms, VíziorgonA street

67 sqm – 2 rooms, VáCi street

92 sqm – 4 rooms, Kőrösi CsomA WAlKWAy

130 sqm – 4 rooms, stromFeld AUrél str.

72 sqm – 2 rooms, ilKA street

This completely renovated, luxury, duplex, mansard apartment benefits of 2 bathrooms and panoramic view over the Buda Hills. It is situated in a renovated building with elevator.

This renovated, bright, high floor apartment has nice view over a green park and it is situated in a renovated building with elevator. Price includes furniture.

Beautiful view over the Danube and the Liberty Bridge, in a period building with elevator, this very bright, high floor apartment benefits of 3 balconies and private gas heating.

This completely renovated, very bright, duplex apartment benefits of two bathrooms and balcony. It is located in the centre of the district.

This very bright apartment, that needs renovation, has covered terrace, direct connection to the common garden and it is situated within a small condominium built on 800 sqm of lot.

Close to the City Park, this spacious and bright apartment benefits of private gas heating, 15 sqm of terrace, winter garden and parking space in the courtyard of the period building.

129.000.000 HUF

19.900.000 HUF

62.000.000 HUF

69.000.000 HUF

34.990.000 HUF

+36.1.201.0403

2nD District

+36.1.379.0506

3rD District

+36.1.287.6745

5th District

34.490.000 HUF

+36.1.780.8276

10th District

+36.1.789.2846

13th District

+36.1.612.5475

15th District

60 sqm – 3 rooms, CsAlogány street

66 sqm – 3 rooms, Boglár street

200 sqm – 6 rooms, st. istVán CirCUit

320 sqm – 6 rooms, FelsőráKos

61 sqm – 3 rooms, népFÜrdő street

215 sqm – 6 rooms, ráKospAlotA

This completely renovated, very well divided apartment has separate rooms and balcony.

It is situated in a building in good condition with elevator.

In a building with elevator, this completely renovated, high floor apartment has panorama from the balcony and it is located 10 minutes walk from the Danube.

This property in good condition consists of 3 separate apartments at the moment with 3 separate entrances. All of the flats have kitchen and bathroom. It is situated in a period building.

This new built, two storey family house has 840 sqm of lot, living room with open kitchen, 2 bathrooms, terrace, 2 balconies and garage.

This park facing, high floor apartment in good condition has separate rooms and balcony. It is situated within a building with elevator.

40.900.000 HUF

21.990.000 Ft

79.900.000 HUF

24.490.000 HUF

In a quiet street, this 2 storey family house built on 420 sqm of lot, has 2 bathrooms, 2 balconies, terrace, garage and parking space in the garden.

+36.1.201.0403

2nD District

+36.1.379.0506

3rD District

100.000.000 HUF

+36.1.287.6745

+36.70.455.8062

49.900.000 HUF

+36.70.398.8754

11th District

13th District

132 sqm – 4 rooms, Fillér street

61 sqm – 3 rooms, KisCelli street

93 sqm – 2 rooms, VörösmArty street

107 sqm – 5 rooms, JAgelló street

50 sqm – 2 rooms, pozsonyi street

168 sqm – 5 rooms, ráKospAlotA

This very spacious, street facing apartment benefits of 2 separate entrances, 2 kitchens and 2 bathrooms. It is located next to the Millenáris Park.

This bright, street facing, high floor apartment in good condition has separate rooms and 10 sqm of terrace. It is located in the centre of Óbuda.

A perfect solution for anybody seeking a renovation project to make 3 rooms, in a renovated period building, close to Andrássy Boulevard.

This completely renovated, very bright, garden facing apartment benefits of 2 balconies and it is located in a quiet area. Good connection to public transport.

This very bright, high floor apartment, that needs renovation, has panoramic view over the Buda Hills, and it is situated within a nice period building with elevator.

This renovated, two storey family house built on 393 sqm of lot, has terrace, balcony, garage and a nice gazebo in the garden.

59.000.000 HUF

29.500.000 HUF

45.000.000 HUF

34.900.000 HUF

53.000.000 HUF

+36.1.336.1706

2nD District

+36.1.430.1403

3rD District

6th District

+36.1.780.8276

35.000.000 HUF

+36.70.3156.087

6th District

+36.1.336.1706

11th District

+36.70.414.7759

13th District

15th District

+36.70.398.8754

Dunakeszi

89 sqm – 3 rooms, BimBó street

137 sqm – 5 rooms, rómAiFÜrdő

71 sqm – 3 rooms, BAJCsy-zsilinszKy lAne

135 sqm – 4 rooms, BerCsényi street

83 sqm – 3 rooms, AngyAlFöld gArden sUB.

67 sqm – 3 rooms, tóVáros

Beautiful panorama over the Buda Hills, this completely renovated, very sunny apartment has separate rooms, 2 balconies, private gas heating and garage.

In a new subdivision, this spacious terraced house has 2 bathrooms, balcony, terrace and private garden. Garage possibility for 3.500.000 HUF.

Adjacent to St. István Basilica. This renovated apartment benefits of a fully fitted kitchen and 2 balconies.

In a well maintained period building, this very spacious, street facing corner apartment in good condition benefits of private gas heating.

Good connection to public transport.

In a quiet area, this renovated family house built on 261 sqm of lot, has separate rooms, 20 sqm of terrace and parking space in the garden.

This bright apartment in good condition has living room with open kitchen, 2 separate bedrooms, balcony and parking space in the closed courtyard of the building.

79.900.000 HUF

62.800.000 HUF

48.900.000 HUF

48.500.000 HUF

44.900.000 HUF

26.600.000 HUF

+36.1.376.6080

2nD District

+36.70.669.5350

4th District

+36.70.3156.087

7th District

+36.1.720.2433

11th District

+36.70.455.8062

13th District

+36.70.399.0399

Dunakeszi

500 sqm – 6 rooms, gyöngyVér street

43 sqm – 2 rooms, tél street

87 sqm – 3 rooms, doHány street

117 sqm – 4 rooms, nándorFeJérVár lAne

45 sqm – 2 rooms, Kárpát street

121 sqm – 4 rooms, tóVáros

Next to the forest, this new, two storey family house built on 5000 sqm of lot, has 77 sqm of terrace, 100 sqm of wellness area, 4 car garage and well kept garden.

In a new building with elevator, this very sunny, garden facing apartment has living room with open kitchen, separate bedroom and balcony.

Close to Rózsák Square, this very sunny, spacious apartment in good condition has living room, 2 separate bedrooms, wardrobe room and private gas heating. Price includes furniture.

In a very quiet street, this very spacious, duplex apartment has private gas heating, 2 bathrooms, balcony and garage. It is situated in a building with nice common garden.

In a new built, luxury subdivision with swimming pool and fitness room in the building, this sunny, high floor apartment benefits of balcony. It is located very close to the Danube.

This new built, 2 storey terraced house has air conditioning system, 414 sqm of well kept private garden, electric gate and garage.

29.000.000 HUF

52.900.000 Ft

46.900.000 HUF

45.000.000 HUF

279.000.000 HUF

+36.1.376.6080

3rD District

21.700.000 HUF

+36.1.782.7275

4th District

+36.1.351.0446

9th District

+36.1.720.2433

12th District

+36.70.414.7759

14th District

+36.70.399.0399

Üröm

30 sqm – 1 room, inner-óBUdA

73 sqm – 4 rooms, AttilA street

69 sqm – 3 rooms, liliom street

80 sqm – 2 rooms + HAll, márVány street

55 sqm – 2 rooms, HerminAmező

300 sqm – 7 rooms, Üröm

This very sunny, garden facing apartment, that needs renovation, benefits of private gas heating and it is situated within a well maintained building.

In the garden suburb area of the district, in a new built subdivision, this very well divided apartment has balcony. Good connection to public transport.

In a new building with elevator, this street and garden facing, high floor apartment has separate rooms, spacious, fully fitted kitchen and 2 balconies. Close to the Ferenc Circuit.

This very spacious and bright, street facing apartment in good condition benefits of separate rooms and private gas heating. Good connection to public transport.

This very sunny, well divided, street facing apartment in good condition has private gas heating and it is situated in a well maintained condominium with common garden.

This new built, luxury, eco-friendly family house built on 1100 sqm of lot, has solar panel heating, 2 bathrooms, terrace and 2 car garage.

14.990.000 HUF

36.500.000 HUF

140.000 eUr

34.900.000 HUF

21.900.000 HUF

108.900.000 HUF

+36.1.430.1403

+36.1.782.7275

+36.1.351.0446

+36.1.789.2846

+36.1.612.5475

+36.70.669.5350

each agency independently owned and operated. • these offers are valid, till the apartments are sold. • these information do not constitute a contractual element. tecnocasa_bbj_2017_04.indd 1

BBJ_2507_bus.indd 11

2017. 04. 04. 12:04

2017. 04. 05. 16:44

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Special Report Telecoms and ICT Hungarian Innovation Aiming to use M2M Technology to Improve Data Collection14 M2M Communication Over the IoT to Help Find a Parking Place16 Changes to EU Funding to Boost Demand for Cloud 18

Hungary’s three major telcos brace themselves for the arrival of DIGI even as they pave the way toward 5G networks BBJ_2507_special_report.indd 12

2017. 04. 05. 16:33

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Budapest Business Journal | April 7 – April 20, 2017

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Special Report | 13

EXPERT OPINION

Diversity, understanding and embracing competition Telenor CEO Alexandra Reich talks to the Budapest Business Journal about her management style, the highly competitive Hungarian telco market, and her vision for the future here.

You are the first woman to head one of the three main telcos in Hungary.

What is your management philosophy in general, and how do you view diversity in particular?

It is slightly surprising that I get this question about being a woman so often in Hungary. The president of the authority regulating our industry (National Media and Infocommunications Authority or NMHH) is a woman, and so is the managing director, so I am definitely not the only female senior manager in the sector. There are now plenty of studies on the market showing that diversity contributes to management success, whether it is gender or national diversity, so I see diversity as an asset for a company.

Regarding my management style: I believe that if you have people on board with the right mind-set and the willingness to learn and collaborate across functions and borders, it is all about giving them room and support when needed. People want to have a meaningful job and this is the case when they feel fully empowered.

Do you regard yourself as a role model?

I really do enjoy seeing people grow and this is the biggest reward you get as a leader. At the same time, I believe in constant learning and the willingness to question yourself. That is why being a role model does not sound comfortable to me as there are always areas of improvement.

You were an investment banker and online entrepreneur with your own digital business before you moved into the telecoms industry in 2001. How has that background helped you?

I established a digital startup before the term had been invented and I also had a chance to work both for challengers and incumbent telco companies and I also know how investors see a market. This background helps me to better understand all market players, their business logic and I hope that my perspective is broad enough for developing a strategy for Telenor in this challenging market amidst the digital transformation of the industry.

BBJ_2507_special_report.indd 13

development potential in mind. If we see customer demand for network extension, we will invest into the spectrum assets necessary for remaining competitive and providing world-class customer experience. Customer demand, the regulatory framework, the price of the spectrum assets and the spectrum fees will influence any decision about further investments.

When it comes to 5G, the knowhow and the readiness are there: Telenor Norway has already signed an agreement about 5G development in Norway and conducted a first public test of the service.

But first and foremost, what we need to work on is the demand for such services as well as the business and industrial solutions that are needed for 5G. If we want 5G to be a success, we will need to work closely with all stakeholders and all members of the ecosystem to create demand and services for 5G.

Alexandra Reich, CEO of Telenor.

You are Austrian, Telenor is Norwegian and you work in Hungary.

Does such multi-nationalism inform business, or is it incidental?

My husband is Swiss, my daughter lives in Italy and my son in Austria and two kids from Nepal were living in my family for several years. I work with Serbian, Bulgarian, Montenegrin and Indian colleagues – just to complete the picture. I find the diversity of cultures and people inspiring and I am continuously learning from this diversity. Furthermore, management decisions also benefit from the diversity of approaches, people from different backgrounds bring in different perspectives. At a personal level, in my view, understanding people from different cultural backgrounds and learning foreign languages keeps you fresh and young. I have even started learning Hungarian, which is quite a bit of a challenge.

socially or in our shops, they will be happy with our services and can articulate what we stand for and why he or she chose us and not another service provider. Furthermore, I would love to see how our services have an impact on the Hungarian society, how the spread of mobile internet and digitalization contribute to welfare and economic grow.

In corporate terms, the Telenor Group has reviewed its strategy and structure recently, which means that we are now working in a more integrated manner.

Some global business units and regional clusters have been established, with me heading the CEE cluster. This implies that part of my job is to closer integrate Telenor Hungary with the Group and other CEE business units to share best practices and find new, common solutions for our customers.

Telenor is the second biggest mobile provider in Hungary, and already boasts state-of-the art features such as its 4G “Hipernet” network. Were you brought in with any specific business goals, and what targets have you set yourself?

My personal aspiration is that if in three years’ time I meet Telenor customers

Outdoor coverage of Hipernet within Hungary is put by Telenor at 98%.

What are the plans for 5G? At the moment, Hungary has one of the best networks globally based on thirdparty surveys. Our customers are happy with the current network quality and we would like to maintain this customer experience by keeping further technical

According to the NMHH website, DIGI will launch mobile telephone services in Hungary from September 13. How do you view this latest challenge?

We embrace competition, we are inspired by eventual new challenges and we are sure that customers will benefit from the new market developments.

However, I want to stress that market competition has already been intense enough. If you look at advertising spending by telcos or the network investments that we have been making or the renewed tariff plans every year, you will not get the impression that we have been sitting idle and complacent in a comfortable market. In recent years, we have not only been competing with local players, but we have already had some global OTT competitors whose services are already available to our customers (Netflix, Google, Facebook, Viber etc.).

We are confident that the quality of our services, customer interfaces and network are a good foundation for keeping our position under even more intense global and local competition.

How do you see the telco market in Hungary in five years’ time?

What I envisage is a society in which digital services and mobile internet has made life better, improved education, healthcare and industrial efficiency and Hungary has become a more competitive country. I would love to see all customers use smartphones and mobile internet, kids use digital devices in classrooms for their education, our corporate customers use digital services to improve their business efficiency and M2M solutions improving traffic, healthcare and the industry. If all stakeholders cooperate towards a digital Hungary, if the regulatory and tax framework provides adequate incentives, this vision will become reality.

2017. 04. 05. 16:33

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Special Report

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

Will DIGI Disrupt Mobile Market Shares?

The local mobile telco industry has been in stalemate for a long time in terms of market positions and rates.

DIGIʼs emergence as a fourth player is bound to shake things up at last.

LEVENTE HÖRÖMPÖLI-TÓTH

Market shares seem to have been cemented in the past decade or so in Hungary’s mobile telecommunications.

This applies despite the fact that NMHH, the National Media and Infocommunications Authority, stopped disclosing official market reports in June 2014 due to disputes among providers over how the statistics were being interpreted.

Figures from 2009 showed T-Mobile having a 52% share, followed by Telenor’s legal predecessor, Pannon (at 24.5%) and Vodafone (25%), whereas in 2014 the same respective numbers were 47%, 30% and 23%. As a statement from Telenor to the Budapest Business Journal explains, this broad stability can be attributed

to continuous innovation and a widely embraced customer-centric approach adopted by all three players.

However, a fundamental shift in the struggle for mastery is set to occur with the market entry of DIGI scheduled for September 13. DIGI is already a television, internet and landline telephone services provider in Hungary, and its notorious price war business model promises to disrupt things in the domestic mobile arena as well.

On the television services market, it has already carved out a

25% share

within a few years, and its emergence caused rates to drop by up to 40%.

Its latest ambition, to prevail as a mobile provider, will be tougher to fulfill than it was for Vodafone when it became the third entrant back in 1999. The market already looks saturated with 11.1 million subscriptions shared between a total population said by the Central Statistical Office to be 9.83 million in 2016. Another bottleneck is DIGIʼs limited network infrastructure. Still, a KBC Equitas analysis projects that DIGI could realistically and relatively easily acquire a 5% market share by offering 30% cheaper rates than its competitors. Experience shows, however, that while Vodafone, for example, was able to attract customers with competitive rates, over time the price advantage has gone, and the same phenomenon may reoccur this time around too.

Freshen up the Market

A

STABLE

TRIO

Incumbents are eager to keep their cool, though. Vodafone expects the market to be “freshened up, which may trigger or accelerate processes from which every 2014* 2009 customer can benefit both in the short and the long run”. János Szabó, deputy CEO for economic affairs T-MOBILE 47% at Magyar Telekom T-MOBILE 52% PANNON (TELENOR) 30% PANNON (TELENOR) 24,5% Nyrt., sounded VODAFONE 23% VODAFONE 25% equally confident in a recent interview with Trend FM, a business SOURCE: NATIONAL MEDIA AND INFOCOMMUNICATIONS AUTHORITY * LAST YEAR FIGURES RELEASED radio channel: “Competition is projects further optimism described by good for everybody,” Telenor’s stance. he said. “Customers benefit from lower “We would not like to give any estimate prices, while providers will pay closer concerning the amount of revenues that attention to their needs. I believe we will be lost due to the EU regulation,” will be able to reinvent ourselves in this Telenor’s statement says. “But if it is regard and we should be able to keep our considered that we have been offering existing market positions.” competitive roaming packages for years Providers will be also greatly affected now, and one of our special rate-based by another event very soon, namely the packages has abolition of roaming charges within the European Union. True enough, measures have been made to help customers cut their roaming costs by eliminating the subscribers extra charge in certain service packages. and several business customers of ours At Vodafone, for instance, some HUF 21.2 use their phone abroad under similar billion could be saved from April 2015 conditions, it is fair to say that no large to February 2017. The general sentiment revenue loss can be expected.”

230,000

Hungarian Innovation Aiming to use M2M Technology to Improve Data Collection A growing level of connectivity, where machines communicate not only with us but with each other, brings about solutions that previously could only have been done by people. The Budapest Business Journal looks at a couple of examples being developed in Hungary.

ZSÓFIA CZIFRA

Counting the eggs laid in a large chicken farm on a daily basis can be challenging in its own right. Yet the data obtained this way can provide farmers with vital feedback, for example, on the health status of the chicken. So how to go about

BBJ_2507_special_report.indd 14

it? Cubilog, a Hungarian ICT startup, offers a solution for the problem that uses a camera-based sensor to count the number of eggs rolling off the assembly line. But it also gathers data on the temperature and humidity, which can be used when comparing daily egg count.

The startup has experience in devising solutions for farmers. Last year it created a remote monitoring solution for Gallus Kft., a large chicken breeding, hatching and manufacturing company. The system provides

24/7

remote surveillance

at five sites. Should the quality of the air within the breeding facility deteriorate, or should the doors open outside shift hours, an immediate alert is sent to the security service. All the historical monitored features (such as temperature) can be obtained from a laptop or a mobile device.

Humidity and Temperature A similar Cubilog solution is used at the Budapest Zoo. Some rare species, such as the leafcutter ant or the naked mole rat, are extremely sensitive to changes

“What makes our system better than similar solutions in the market is that it can be tailor-made, and you can still connect any type of sensor to it.” in humidity and temperature. Prior to introducing the system, keepers had to check on conditions hourly. Now they receive a message on their mobile devices in the event of any change.

Both solutions were created using Vodafone’s M2M system. Cubilog is now working on a system that is able to integrate any type of sensors used, say, in greenhouses, and communicate the data (pH, UV radiation, humidity, etc.).

“What makes our system better than similar solutions in the market is that it can be tailor-made, and you can still connect any type of sensor to it,” János Huszár, project manager of Cubilog Kft. told the Budapest Business Journal. So, there is no need to change the existing devices, the start-up offers ready to use plug and play solutions.

While personal computers and mobile devices benefit from frequent software updates in terms of new functions and bug fixes, vehicles can only be updated in the workshop, which makes the software update process slow, and expensive. This can be really timeconsuming, especially for those with new cars that have several on-board connectivity features such as online traffic information collection.

Steering systems manufacturer ThyssenKrupp Presta has a solution that would allow software update on the go. “Installing/integrating certain features in the steering unit will make it possible for the system to download a new software version of, for example, navigation systems (maps) or even self-driving features,” András Balogh, head of platform and software development at ThyssenKrupp Presta Hungary told the BBJ. The development is in the pipeline, yet the final solution is always tailored to the certain carmakers needs. While the main idea is updating software while driving, it is also possible to update the system while parking (at home using a Wi-Fi connection) or with electric cars during charging.

2017. 04. 05. 16:33

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Budapest Business Journal | April 7 – April 20, 2017

Special Report | 15

The Cloud and VPN: The Beginning of a Beautiful Friendship The widespread corporate use of the cloud and a vast array of mobile devices means companies have to rely more on secure access to their own networks.

Having a Virtual Private Network (VPN) is becoming ever more important.

LEVENTE HÖRÖMPÖLI-TÓTH

VPNs that set up a secure tunnel between two data ports for data transfer over the internet have been around for a while now, and it seems that with mobile devices and the cloud gaining in significance, they are bound to matter ever more. However, too many companies tend to sit back and relax once their VPN is established, as if it worked as a cure-all potion.

As Tamás Kovács, managing partner of Mendax Informatika Kft., an ICT consultancy specializing in solutions for SMEs, explains to the Budapest Business Journal, the picture is far more complex than that.

Tamás Kovács, managing partner of Mendax Informatika Kft.

Problems often arise with a lack of basic security awareness, as there are firms out there that shrug off potential threats and do not consider setting up a VPN in the first place. Others fool themselves that they do not need the classic tools of protection.

“A VPN simply does not make your system immune from malware, viruses and other online threats,” Kovács points out.

“Without a firewall, when downloading infected content via a VPN, your system will end up infected.” So, a traffic controlling firewall remains a must-have security protection.

Cloud and VPN go Handin-hand VPN installations are important for several reasons. Security, data control, mobile data management and corporate

“Even though local companies still refrain from cloud services, they are gradually realizing that, after all, they are a lot better off if their data is handled in remote datacenters where proper fire protection protocols, physical protection and automated data saving mechanisms are in place.” cloud-driven device access connections make it indispensable, the expert notes.

He further believes that, regardless of the type of activity or the size of the enterprise, there are VPNs of universal scope that can offer the ideal security level. What matters more now is that the widespread use of mobile devices and the uptick in using cloud services will inevitably cause VPNs to build out additional dominance. With the shift from traditional desk work to remote workflows, the concept of security gets redefined all the time.

“Even though local companies still refrain from cloud services, they are gradually realizing that, after all, they

are a lot better off if their data is handled in remote datacenters where proper fire protection protocols, physical protection and automated data saving mechanisms are in place,” Kovács says. But of course, once you decide to store your files or applications in the cloud, a secure channel is imperative.

“That is why VPNs and the cloud go hand-in-hand,” he says. “Without secure access, the cloud is worthless.”

Understandably, a global trend shows VPN service providers are starting to offer integrated public cloud services as part of their offer so that SMEs get the best of both worlds.

Setting up secure access to corporate data is another issue in the case of the exponentially growing number of mobile devices. Mobile Access Management (MAM)-based mobile VPN connections are the unbeaten path here; it runs over a private network and never touches the internet, as opposed to a traditional mobile VPN. Kovács says, however, that Hungarian SMEs are not, thus far, advanced enough to be interested in MAM. “Their major concern is to get protection for the synchronization of the mailing systems run on their gadgets, or to make sure they can use their laptops as hotspots to access the office network.

But with time, the latest cutting-edge solutions will gradually be embraced by them too,” he concludes.

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2017. 04. 05. 16:33

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M2M Communication Over the IoT to Help Find a Parking Place

Mobile Point of Sale

Offering excellent internet coverage and access everywhere will these days provide little competitive advantage over their competitors, so telcos are introducing their own applications and solutions to attract and retain customers.

BBJ STAFF

With the arrival and gradual expansion of the Internet of Things (IoT), there are more possibilities than ever to address some unresolved issues, be they technical, financial or home-related. The essence of the system is connectivity – IoT in fact is the network of connected devices with the world around them – so basically it is up to the service provider what field to develop a solution for. The most popular fields are transport and finances – at least when it comes to telcos in Hungary.

Last month, Magyar Telekom started testing a new technology that enables the monitoring of free parking spaces.

The solution, that would help drivers find empty parking spaces in parking lots, is supported by NarrowBand-IoT (NB-IoT), a technology that allows for more cost-effective communication between devices. The main idea is to create smart parking lots where sensors, that contain NB-IoT modules, and some power source are integrated in the concrete. The sensor remains inactive and only changes status when a car parks over it.

This solution could be connected to a mobile phone app that would help drivers navigate to free spaces.

Similar to mobile internet, this standardized mobile technology can transmit internetbased data but only a small amount of information at a time and fairly slowly; with 250 kbps, Zoltán Farkas, business development expert for Magyar Telekom said in describing the system to Hungarian newswire, MTI. As a comparison, current 4G+ systems can achieve 300 Mbps. Yet because these devices communicate rarely, and only then at a low bandwidth, they have low power requirement. A sensor is able to operate for up to ten years on one or two pencil batteries, so there is no need for a power station or network on site. Another advantage of NB-IoT is that it has deep indoor penetration. This feature makes it a good choice in covered areas such as underground water tanks or canals.

Remote Bike Tracking Vodafone Hungary, too, uses new technology in transportation and tracking – yet it does so

Telekom ///and ICT Briefs

Invitech Solutions hands out InnoMax awards for seventh time Invitech Solutions, which provides professional services to the SME, corporate, institutional and wholesale customers of the Invitel Group, distributed its InnoMax Awards for the seventh-time last week, awarding Hungarian innovation projects, according to a press release sent to the Budapest Business Journal.

The InnoMax Awards were founded back in 2009 in order to draw attention to those firms adapting best to quickly changing market conditions with innovative solutions. This year the focus fell on technological solutions favoring

BBJ_2507_special_report.indd 16

community interests, such as AI-aided communication between doctors and patients, a virtual marketplace helping charity donors meet those in need, or an application warning young people about the dangers they might face.

Invitech Solutions, as part of the Invitel Group, received a total of 160 applications for awards in the three categories: Business; Nonprofit; and InnoApps.

Grape Solutions Zrt. received the award in the Business category with its HealthBot chat application that aids communication between doctor and patient with the help of AI. In the Nonprofit category, Invitech acknowledged five projects: Ágacska Alapítvány’s Adopt-E-Klub, an online club for adoptive parents; Bókay

for two-wheelers. Having been used abroad, the remote bike tracking solution, Velotrack, has now become available in e-bike rental services around Lake Balaton. Hungarian cycle maker Gepida even builds the GPS and motion control sensor into its bikes.

Once the bike is moved, information collected by these devices is sent to a server center and then to the biker’s mobile phone. Communication is made available using Vodafone’s M2M technology. With the system integrated into the bikes, rental owners and operators can keep track of their position but they can also gather rental and user information. The bikes can be rented at six points around Lake Balaton and at Gárdony, by Lake Velence.

ReadyPay, another solution from Vodafone, stems from the problem of home delivery.

Couriers (or sales representatives on the go) often have difficulty collecting the money when a customer doesn’t have enough cash on them. Electronic payment is more convenient and not just for the buyer: couriers don’t like to carry around large amounts of cash either.

Gyermekklinikáért Alapítvány’s medical app; civil startup Digitális Tudás Akadémia’s UP Academy; Heti Betevő Egyesület’s web page to help those planning to engage with charities; and Informatika a Látássérültekért Alapítvány’s app displaying traditional documents on a Braille screen.

The winner in the InnoApps category was a development enabling parents to track the whereabouts of their children.

“The judges met tons of usable and realizable developments through the evaluation,” commented Invitel Group CEO David Blunck. “With Innomax Awards we draw attention to the fact that businesses, beyond successful operations, need to focus on social matters. To put it simpler: public interest should keep pace with profits,” he added.

IBM to develop Cloud Video solutions in Budapest

IBM announced on its website on April 5 that it has opened an IBM Budapest Software Lab dedicated to developing new technologies for IBM Cloud Video,

The answer for many SME problems is a mobile point of sale (mPOS) solution.

Developed by Vodafone, OTP Bank and the Hungarian subsidy of Ingenico Group, an international financial service provider, ReadyPay is small enough to fit into one’s pocket, and costs HUF 5,000, making it ideal for SMEs that don’t have a POS terminal. It is compatible with all bank cards in Hungary. The device connects to the internet via a smart phone or tablet with Bluetooth connection. Financial transaction is initiated with Vodafone’s ReadyPay app that has to be downloaded on the smart device. The amount payable (and the PIN) should then be entered into the device.

From this point, it acts just like a regular terminal: the mPOS reads the card holder’s bankcard or mobile wallet. Information about the payment to the receiver is sent via the app and email, but the card holder can also receive a notification/receipt via email.

Telenor keeps an eye on potential IoT solutions worth investing in both on the residential and business side, the company told the Budapest Business Journal. “It is an exciting field, bringing over very useful solutions, therefore we are giving it a highlighted role,” the company added.

Some of the solutions Telenor is already a partner in include the online cash machines market, logistics and so-called “mhealth” projects. In certain stores, smart home solutions including cameras, motion sensors, alarm systems and other home safety technology are already available.

Last year, the company assessed market demand of business users and tested a GPS-based fleet solution with a partner.

Magyar Telekom’s parent company, Deutsche Telekom continues to expand its NarrowBand-IoT coverage in Europe, including in Hungary. The technology is expected to become commercially viable in Germany in the first half of this year, but there are a number of pilot projects going on elsewhere that focus on smart metering and device tracking.

to support the increasing demand for streaming video technology by companies across all industries. A major focus will be collaborating with other IBM sites to infuse cognitive capabilities into IBM Cloud Video solutions, in order to unlock data and insights from video. IBM estimates cloud-based video will be a USD 105 billion market by 2019. Gyula Fehér, IBM Budapest Lab leader said that video is a fast-growing area in the cloud with companies across all industries using video to improve communications.

Moreover, developers at the new IBM Budapest Lab are already cooperating with other IBM researchers to use Watson and other cognitive technologies to uncover new insights from video and to provide new opportunities to broadcasters and content owners. The IBM Budapest Lab expands on the work of the previous Ustream R&D Center in Hungary. IBM Budapest Lab offices will stay in the heart of Budapest on Andrássy út, where the Ustream R&D Center was located, and are being renovated and expanded to provide a high tech and inspirational workplace for IBM employees.

2017. 04. 05. 16:33

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Special Report | 17

Boosting Speeds and Paving the way for 5G

With less than three years remaining until the unofficial rollout of the 5G technology, telecommunication companies in Hungary are busy developing their existing networks to smooth the transition.

They also say they are conducting some promising experiments in their laboratories, reaching higher speeds than ever.

BBJ STAFF

Being the most suitable to serve the current capacity demand and customer numbers, it is 4G technology that defines a quality mobile network today and for many years ahead, Magyar Telekom told the Budapest Business Journal. Yet this doesn’t mean that the company is not preparing for the time when network traffic and the need to maintain customer satisfaction makes the switch to the next generation technology inevitable. Magyar Telekom has already been building 4G+ technology, which allows for 300 Mbps nominal download speed service (currently the fastest 4G speed is 150 Mbps). The list of locations where 4G+ is already running also contains some towns that host festivals or events where a large number of users may be connected to the internet at one time.

The fastest mobile data service in Hungary, at 450 Mbps, was introduced

by Magyar Telekom in Gödöllő last November, but the company plans to use/ expand it at bigger-scale events. In that same month, along with Ericsson Hungary, the company tested a digital technology enabling a 1,200 Mbps download speed at the Regional Digital Summit in Budapest.

This technology, which can only be demonstrated in lab conditions today, translates into four times higher performance than the current fastest public mobile internet. Such improvement was achieved by aggregating various frequency ranges, an advanced antennae system and higherlevel modulation, Magyar Telekom said.

En route to 5G, successful tests were carried out by Telenor as well at the end of last year, at the radio-testing laboratory at the company’s headquarters at Törökbálint.

Using new technology, the company managed to reach a

1,215 Gbps mobile internet speed:

the fastest Hipernet data transfer speed to date. That makes the current fastest 4G+ speed of 300 Mbps theoretical download feel positively sluggish. To put “speed” in perspective: while the latter allows you to download a DVD’s worth of data in two

BBJ_2507_special_report.indd 17

Telenor’s lab testing last year helped raise speeds.

minutes, with the new technology, the same task could be accomplished in 31.5 seconds. It also speeds up the download of 4K videos.

Response Time Besides higher speed, the company managed to lower network response time: from current 16-30 millisecond (ms) to below 10 ms on a 4G+ network. This was also achieved by involving more frequencies from the 800, 1800 and 2600 Mhz spectrum and with the combined use of a more developed antenna technology and higher-level module mode. Many, from video game players to stock brokers, could make good use of shorter response times. The 5G network currently under standardization can shred further seconds off and reach a response time of less than a millisecond. This all but real-time response is essential for self-driving cars to keep proper distance or for distance medical services.

Regarding the near future, Telenor says it is continuing to expand its 4G network, supporting theoretical download and upload speeds of 150 Mbps and 50 Mbps in small villages. By the end of last year, the company had made Hipernet speeds available in 1,000 villages of 1,000 to 6,000 people and in 1,100 villages of less than 1,000 people. LTE Advanced technology was deployed at 700 base stations across the country, which means that customers in Budapest, the Balaton area, Győr, Szombathely, Székesfehérvár and Veszprém can now use a Hipernet speed faster than 4G. By 2017 yearend, the company expects its 4G service to be made available in 500 villages with a population of less than 6,000. It is also working on improving its indoor values to ensure network stability in rooms several walls away from the street.

The fastest mobile data service in Hungary, at 450 Mbps, was introduced by Magyar Telekom in Gödöllő last November, but the company plans to use/expand it at bigger-scale events.

As part of its most recent network development, Vodafone launched its 1,800 MHz LTE service in Budapest and its catchment area, on top of the 800 MHz LTE service used up to now, as part of its most recent network development. In doing so it has increased the maximum bandwidth available for 4G services from 10 MHz to 20 MHz. The company has combined the capacities of the two spectra using the most up-to-date technologies available. Thanks to the doubled bandwidth and so-called Carrier Aggregation technology, mobile services are reaching a much higher quality, and becoming more stable and faster for all customers using 4G enabled handsets in Budapest and its catchment area, the company said. Carrier Aggregation was piloted by Vodafone in Tatabánya. As a result, besides Budapest, 4G+ services have also become available in the county seat of Komárom-Esztergom County. The development ran from last November until the beginning of 2017. Vodafone will continue to roll out this service in numerous other towns of various sizes, the firm stated.

Using the 1,800 MHz frequency range, which by now has reached a total capacity of 20 MHz, is reducing the load on the LTE 800 cells, which in itself greatly improves 4G services, as customers can access a

larger bandwidth. According to data from Vodafone, the overwhelming majority of smartphones on the market that are younger than two years are Carrier Aggregation enabled. This means that, as a result of this development, their users have access to 4G+ services that are much faster than the service offered before, facilitating theoretical download speeds of up to 150 Mbit/s, Vodafone said.

HD Downloads This speed allows users to download a high resolution (HD) film in just a few minutes, and enjoy on-line streaming services without interruption, in excellent quality. 4G+ services can typically be used with handsets that are not older than two years and can also run on the LTE 1,800 MHz network. However, only certain smartphones display this combined network as ‘4G+’, while others still show ‘4G’.

The launch of the 1,800 MHz LTE network makes it possible for numerous customers, who use handsets that do not allow them to connect to the 800 MHz LTE network, to access 4G services. As a result, 4G services will become available to more than

35,000 of Vodafone’s

existing customers, the company says.

The company has also improved its indoor coverage throughout greater Budapest, offering faster-than-before call set-up and better voice quality for the 4G users, as well as much better indoor coverage than previously on the 3G network. The network development project which ran from June 2016 till the end of November 2016 affected almost 700 sites and 2,000 cells in the greater Budapest area, as well as in neighboring towns such as Érd, Szentendre and Budaörs.

2017. 04. 05. 16:33

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Budapest Business Journal | April 7 – April 20, 2017

Changes to EU Funding to Boost Demand for Cloud Services

Local enterprises are still in the phase of “getting familiar” with cloud technology, but its widespread use may be set to grow soon, particularly for hybrid solutions that mix the advantages of private and public cloud services.

USAGE OF CLOUD SERVICES

60%

of respondents

said they would consider setting up a hybrid model.

Invitel Solutions Zrt., a leading Hungarian cloud provider, confirms that the popularity of the cloud is set to grow further in Hungary as well, and the hybrid structure can prove

“Paradoxically, the need for a more elevated IT security will give a further boost to cloud computing since, as corporate IT systems are getting ever more complex and it is ever more difficult to find qualified personnel, the role of external specialized companies will gain in significance.” ideal on a mass scale. “Under such a framework, outsourced IT functions can be operated partly in totally tailor-made local data centers, and partly by crossborder players providing services in accordance with global standards,” reads a statement from Invitel Solutions Zrt. sent in response to questions passed by the Budapest Business Journal. Using

BBJ_2507_special_report.indd 18

OF CORPORATES PLAN PUBLIC CLOUD SERVICES

NORTH AMERICAN AND EUROPEAN CORPORATES

38%

OF CORPORATES BUILD PRIVATE CLOUDS

30%

OF CORPORATES INTEND TO IMPLEMENT SOME FORM OF CLOUD TECHNOLOGY IN THE NEXT 12 MONTHS

60%

LEVENTE HÖRÖMPÖLI-TÓTH

Market researchers say that cloud computing is about to enter a second wave of development, with ever more enterprises with big budgets, data centers and complex applications turning their attention to both public and private cloud solutions. A recent Forrester Research found that 38% of 1,000-plus North American and European corporate infrastructure technology decisionmakers said they are building private clouds, 32% of them were planning to opt for public cloud services, and 30% intented to implement some form of cloud technology in the next 12 months. Nearly

32%

8-10%

OF HUNGARIAN ENTERPRISES USE CLOUD TECHNOLOGY

OF CORPORATES CONSIDER A HYBRID MODEL SOURCE: FORRESTER RESEARCH / ICT ASSOCIATION OF HUNGARY

this approach security, one of the top concerns for potential corporate clients, can be guaranteed in a more costeffective manner than merely betting on one’s own resources.

“Paradoxically, the need for a more elevated IT security will give a further boost to cloud computing since, as corporate IT systems are getting ever more complex and it is ever more difficult to find qualified personnel, the role of external specialized companies will gain in significance,” Invitel believes.

Room to Grow Data shows that, at the moment, only 8-10% of Hungarian enterprises use cloud technology and a mindset shift is required because many of them still regard it not as the means, but the end. According to a recent survey by Microsoft and IVSZ (the ICT Association of Hungary), executives mostly fear not being able to comply with legal and data protection regulations, dependency of a third-party provider, and additional costs connected to initial launch.

“Our experience shows that large corporations in Hungary are still merely in the phase of getting familiar with the technology,” Veronika HegedűsCsapó, service portfolio manager of T-Systems tells the BBJ. “They have implemented minor measures to improve efficiency, by typically building a private cloud, whereas public cloud solutions have been optimized for a very limited number of processes. Thanks to a favorable regulatory environment, and by mastering best practices, there should be a shift towards public solutions.”

Global trends already point into that direction. The global public cloud market will hit

USD

146 billion

this year, up from USD 87 bln in 2015, and is having a compound annual growth

rate of 22% as enterprises realize in ever bigger numbers that on-premises solutions often end up costing more. In more developed markets, the openness towards the technology is such that companies are now comfortable with running business apps such as SAP on the cloud.

As Hegedűs-Csapó explains, expectations for IT security are very high, in the financial sector in particular.

What is more, such compliance is more of a legal requirement now due to, for instance, a relevant recommendation from the National Bank of Hungary.

In fact, the latter is a novelty in the entire region, for now putting Hungary ahead of the pack. “This helps solidify customer confidence in the cloud as such, whereas for the providers it will create more obligations and a need for intensified customer care,” HegedűsCsapó adds.

In the experience of T-Systems, the public cloud market in Hungary is dominated by multinational cloud vendors, whereas local Hungarian players prevail in the private cloud segment. And despite the existing concerns and prejudice, the number of CTOs planning to use some sort of cloud service has doubled recently, a fact that projects great growth potential. Polls also indicate that public clouds will attract more interest than private ones.

Clouds Bouyed by EU Funds Another factor that seems likely to give further impetus to an upward market trend is a new set of criteria concerning the use of EU funds. According to the changed regulations, the money can not only be used for cloud investment purposes, but also to cover any operational expenses such as monthly or yearly plans. This embodies a huge improvement since, until now, EU funding has been used to build data

“We see future potential in hybrid solution management, but for that to happen the concept of the public cloud needs to be embraced more extensively.” centers with underused capacity. This modification could help encourage actual clients to use such centers at last.

Under the relevant rules,

some

4,000

micro- and small- and medium-sized enterprises will be eligible for HUF 17.5 bln of non-refundable funds, and HUF 21.9 bln of preferential loans.

According to IVSZ, Hungarian players on the cloud market aren’t interested in competing with the large global public cloud vendors. Instead they choose to provide managed cloud services beyond those offered by multinational providers. This way the use of cloud services becomes more flexible and simple for clients.

The key to success of ITO providers is proper cloud management software, so many of them are developing their own platforms. “We see future potential in hybrid solution management, but for that to happen the concept of the public cloud needs to be embraced more extensively,” IVSZ said in a statement to the BBJ. “On the other hand, we believe that data centers serving as a basis for cloud services also have a bright future, not least because of the nice location of Hungary within the region. Our obvious objective here at IVSZ is to capitalize on that potential by building out the most ideal service provider and governmental framework criteria possible.”.

2017. 04. 05. 16:33

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Budapest Business Journal | April 7 – April 20, 2017

Telecom service providers

CABLE TV

LEASED LINE

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OTHER

MOBILE NETWORK

OPTICAL CABLE NETWORK

ANALOG WIRE NETWORK

ANALOG CABLE NETWORK

ISDN

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PACKAGE TYPES SOLD TRIPLE PLAY (INTERNET, TV, LANDLINE PHONE) QUADRUPLE PLAY (INTERNET, TV, LANDLINE PHONE, MOBILE)

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NO. OF ACTIVE SUBSCRIBERS

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INFRASTRUCTURE TYPES

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1

COMPANY WEBSITE

TOTAL NET REVENUE IN 2016 (HUF MLN)

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SERVICES

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NO. OF FULL-TIME EMPLOYEES ON MARCH 1, 2017

Ranked by total net revenue (HUF mln) in 2016

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

9,432(1)

Free float (40.64), other (0.15) Deutsche Telekom AG (59.21)

Christopher Mattheisen János Szabó Mohamed Elsayad

1013 Budapest, Krisztina körút 55.

(1) 458-0000 – –

TELENOR MAGYARORSZÁG ZRT. 2

www.telenor.hu

VODAFONE MAGYARORSZÁG 3 MOBIL TÁVKÖZLÉSI ZRT.

148,705 3,148,000

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4G

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136,557(2)

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61,833 (2015)

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Virtual mobile network

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UPC MAGYARORSZÁG KFT. www.upc.hu

DIGI TÁVKÖZLÉSI ÉS 5 SZOLGÁLTATÓ KFT.

39,253 (2015)

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INVITEL TÁVKÖZLÉSI ZRT.(3)

36,057

398,526

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Broadcasting, telecom, multimedia, Wifi service, ICT solutions

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Integrated business, IT and telecom services

www.digi.hu

6

www.invitel.hu

ANTENNA HUNGÁRIA 7 ZRT. www.ahrt.hu

20,756

101,589

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1,911

Alexandre Froment-Curtil David Garcia –

1095 Budapest, Lechner Ödön fasor 6.

(1) 288-4288 (1) 288-3200 –

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– UPC CEE Holding B.V. (100)

Robert Redeleanu Ádám Jakabos –

1095 Budapest, Soroksári út 30–34.

(1) 456-2600 (1) 216-7752 info@upc.hu

Ungureanu Florin, Ryszka Sambor – –

1134 Budapest, Váci út 35.

(1) 707-1000 (1) 707-0009 ugyfelszolgalat@ hu.digi.tv

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– RCS&RDS S.A. (100)

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Microwave connection

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627

Ilford Holding Kft. (99.99), other (0.01) –

David Blunck, Marianne Langsteiner Ákos Balogh István Iski

2040 Budaörs, Edison utca 4.

(1) 801-1500 (1) 801-1501 info@invitel.co.hu

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DVB-T, VoIP, IP VPN, optics, satellite, microwave, wireless network

503

Hungarian state (100) –

András Kápolnai Ádám Hargitai András Tóth

1119 Budapest, Petzvál József utca 31–33.

(1) 464-2464 (1) 464-2525 antennah@ahrt.hu

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Data centers, microwave transmission

512

Ilford Holding Kft. (99.99), other (0.01) –

David Blunck, Áron Javorniczky Ákos Balogh János Drucskó, Krisztina Hajnal

2040 Budaörs, Edison utca 4.

(1) 801-1500 (1) 801-4424 vip@invitech.hu

Gergely Árvai – –

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INVITECH 8 MEGOLDÁSOK ZRT.

11,306

GTS 9 HUNGARY KFT.

10,375 (2015)

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Magyar Telekom Nyrt. (100) –

8,502

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246

Individuals (100) –

János Tarr Kata Barta Péter Kuczkó

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Satellite data transmission, content broadcasting, managed IT solutions

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Antenna Hungária Zrt (55.38) PT Participações SGPS S.A. (44.62)

António Felizardo Éva Illés Csíkné –

www.invitech.hu

www.gts.hu

10

TARR KFT. www.tarr.hu

5,764

HUNGARO DIGITEL 11 KFT.

4,048

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NETFONE TELECOM 12 KFT.

1,095 (2015)

8,000 (approx.)

www.hdt.hu

www.netfone.hu

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Satellite infrastructure

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Morando Zrt. (80), Zsolt Wilhelm (10) Scanwinavia AB (10)

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Digital wire, radio microwave

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Individuals (68), ThreeF Kft. (32) –

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ACE TELECOM KFT. www.acetelecom.hu

978 (2015)

3,000 (approx.)

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Virtual server services, Wifi hotspot operation, server hosting

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DRÁVANET ZRT.

311

2,887

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Pallas Office Kft. (81), other (19) –

206

6,000 (approx.)

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Virtual subdirectory service

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András Beliczay (100) –

www.dravanet.hu

OPENNETWORKS

15 KFT. www.opennet.hu

2045 Törökbálint, Pannon út 1.

(1) 464-6000 (1) 464-6100 –

– Vodafone Europe B.V. (100)

www.vodafone.hu

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– Alexandra Reich Telenor Mobil Nakul Seghal Communications AS Nakul Seghal (100)

2040 Budaörs, Ipartelep utca 13–15.

(1) 814-4000 (1) 814-4047 info@gts.hu 7100 Szekszárd, Kadarka utca 18.

1223 (74) 413-636 info@tarr.hu 2310 SzigetszentmiklósLakihegy, Komputca 2.

(1) 488-8500 (1) 488-8501 info@hdt.hu

4400 Nyíregyháza, Tiszavasvári út 35/A (1) 878-1814 (1) 325-5675 info@netfone.hu 1037 Budapest, Attila Farmosi, Zay utca 3.

Gábor Varga (1) 437-0590 Gábor Varga (1) 437-0599 Viktória Krall office@ acetelecom.hu 7624 Pécs, Budai Nagy Zsombor Papp Antal utca 1.

Rezső Dunay (40) 811-118 Csaba Csizmadia (1) 890-0891 info@dravanet.hu 1026 Budapest, Endrődi Sándor András Beliczay utca 15/C András Beliczay (1) 999-6000 Judit Stark (1) 999-6001 info@opennet.hu Zsolt Wilhelm Zsolt Wilhelm Lajos Varga

(1) Data of December 31, 2016. (2) Data of business year April 1, 2015-March 31, 2016. (3) Data does not include the net revenue of Invitech Megoldások Zrt. between July 1, 2016-December 31, 2016, which has been established from Invitel Távközlési Zrt.’s previous corporate and wholesale trade branch. The net revenue not included is HUF 11.3 billion.

BBJ_2507_special_report.indd 19

2017. 04. 05. 16:33

5

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

Socialite Celebrating Contemporary iscovering the best of D Hungarian design that is playful, emotional even, yet beautifully crafted.

Hungarian Design

DAVID HOLZER

My partner and I were strolling up to Deák tér from the direction of Váci utca when we discovered the Magma design store and gallery at Petőfi Sándor utca 11. The window display looked intriguing, unlike anything I’d seen thus far in Budapest, so we went in.

As we wandered around, I became fascinated by the way in which Hungarian influences had been combined with a knowing humor and design sensibility to create products that were witty and well-made. Chic design has, in most of the cities I visit, become synonymous with Scandinavia. I don’t know about you, but I find Scandinavian design, with its emphasis on simplicity, purity and muted colors, incredibly boring.

The items collected together in Magma managed to be both proudly Hungarian and, for the most part, in good taste. In my opinion, of course.

Caricature Hungarian men with mustaches decorated cushion covers in delicate, muted pinks, greens and blues.

A collection of glassware was delicately painted in a design that played with the classical Hungarian floral motif.

There was even an example of a Gömböc, that beautiful and strange object that I later found out is “the first and only known homogenous object with one stable and one unstable equilibrium point”. I have no idea whether that’s true or not but the Gömböc is lovely, if somewhat expensive.

Exquisitely Packaged

I was particularly taken with a set of witty, exquisitely packaged objects designed or discovered by great Hungarian inventors.

It turns out that Biró, who I always thought was Argentinian – in my defense, his name does sound like Spanish, think of Miro – was actually László. I have a Hungarian to thank every time I scribble something down in my notebook.

My partner fell in love with a collection of ceramic birds that just begged to be picked up and caressed. Each collection of objects on display at Magma had a little card by it that gave the name of the designer. A nice touch. We found out that the birds were called Birdy and made by someone named Judit Karsay.

I thought the concept behind the store, which also felt like a gallery, was excellent and wanted to find out more. Fortunately, Magma founder, owner and manager Anikó Vásárhelyi was in the store at the

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1036 Bp., Kiskorona u. 7. Phone: +36 1 2500288 Ticket: obudaitarsaskor.hu jegymester.hu

ARTISTRY IN DUO Lajos Dudás – clarinet Philipp van Endert (D) – guitar April 26 19.00 ANNIVERSARIES Ádám Banda – violin Ilona Prunyi – piano April 27 19.00 ROMANTIC RARITIES House Music with Music Historian János Mácsai Michaela Kapustová – mezzo-soprano Lukáš Zeman – baritone Dániel Lőwenberg – piano April 28 19.00 MIHAI DIACONESCU’S PIANO CONCERT May 5 19.00

BBJ_2507_socialite.indd 20

time and agreed to be interviewed. I asked Vásárhelyi what gave the work collected in the store-gallery its particularly Hungarian quality. “I believe Hungarian design is generally inspired by the past,” she said. “Both the motifs used and the ways of making objects are very traditional. Also, we’re not like Scandinavians.

We’re very emotional, so our design is often a lot more playful.

So, for example, we like caricature. We love to eat and drink and be hospitable, which is one of the reasons why there are several sets of pálinka glasses to choose from.”

What about the exceptionally high quality of the work? “Under socialism, art and craft schools taught people how to make things, and not just design them,” Vásárhely explained. “Young Hungarians designing today have parents who grew up under socialism so the influence continues. It was also a rigorous education that involved lots of technical training.

This is one of the reasons why designers like Ernő Rubik or Gábor Domokos and Péter Várkonyi, creators of the Gömböc, have been so successful.”

The Designer as Polymath

“Also,” Vásárhelyi continued, “it’s hard to make a living just from design in Hungary.

Because of this, our designers often have other professions. They work as architects for instance. Fortunately, under socialism, Hungarian artists and designers were obliged to be polymaths, which gave them the ability to switch discipline. And because it is so hard for designers in this country to make money, their work has to be really creative to stand out. So, you have a great combination of creativity and quality.”

I asked who buys the work. “When we started we only sold interior design materials and objects but we became more and more popular with tourists who wanted to buy souvenirs that were rather more stylish, memorable and well-made than usual. Now we offer a wide selection of small, quirky items that can fit safely and comfortably into peoples’ luggage.

But everything we offer is made to an extremely high standard, and we want people to know who designed the object they’ve chosen as a souvenir. This is why we have the name cards. We don’t just want to sell things. We want to educate our customers as to what Hungarian design is really about. Magma itself is a work in progress and our window display changes all the time.”

Vásárhelyi recommended the work of several designers including Dániel Lakos, Zsolt Vidák, Péter Toronyi and Éva Farkas-

Pap. She also mentioned Judit Karsay who made the birdies my partner so adored. I spoke to Karsay next.

Judit Karsay was born in Austria, not long after World War Two. When her family returned to Budapest, her mother studied stage and costume design in addition to art history.

Karsay’s mother often worked at home, which helped inspire Judit to paint, draw and become an artist.

She studied ceramics at the Secondary School for Fine and Applied Arts and began making pottery using a wheel aged 14. “I chose ceramics because it is a combination of painting and sculpture,” Karsay told me.

Deep Understanding

As with so many of the designers showcased at Magma, Karsay combines traditional techniques with a deep understanding of materials and processes.

“I learned how to make pots from the original craftsmen in Mohács and Mezőtúr,” she explained. “When I realized that to make the glaze on the pottery I needed to understand how chemicals worked, I studied chemical engineering at Veszprém University, where I specialized in silicate chemistry.

Afterwards I went to the art academy in Budapest, now the Moholy-Nagy University of Art and Design [MOME], where I obtained a master’s degree.

Today it’s hard to be a designer in Hungary and live from your work because the market’s so small. But I knew exactly what I wanted to do.”

I asked Karsay how the beautiful Birdies came about. “I made my first ones in the gymnasium,” she told me, “but they were different forms. I’ve changed much of the design since then.

The Birdies I make today are based upon the form I finally came up with in 2000. Luckily people fell in love with the Birdy and I sell them all over the world. My work is collected by people in Europe, the USA and as far away as Japan and New Zealand, as well as here in Hungary.”

It turns out that Karsay has a dream to create big Birdies in a park or in a public place, here in Hungary or abroad.

“I imagine that this would be a beautiful place for people to meet and relax,” she said.

What a wonderful idea. Just picturing a Birdy park made me smile.

You can find out more about Magma at www.magma.hu and Birdy by Karsay at www.karsay.hu.

2017. 04. 05. 16:34

5

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

Socialite | 21

Tokaj’s Reinvention Marches On

The centerpiece tasting of Tokaji Március, which was held at the Corinthia Hotel Budapest on March 25, confirmed the progress being made by Hungary’s most famous wine region, as well as unleashing several new names on a wine-loving crowd.

ROB SMYTH

The world-renowned region, situated in the country’s northeast, has had to reinvent itself due to demand for the sweet wine in which it excels being severely curtailed by changing tastes.

Accordingly, the region’s vintners have gone in a dry direction, and while there has been much fanfare about dry Tokaj, led by the Furmint grape, a lot of the wines have, quite frankly, flattered to deceive.

This is only to be expected given that the quality dry Tokaj movement only dates back to the millennium, and Rome certainly wasn’t built in a day. However, real progress is now being made as the winemakers are allowing the grapes to do the talking. This has been enabled particularly by reining in on the use of oak, with quite a number of dry Tokaj wines having seen no oak whatsoever.

Indeed, dry wines made from the Furmint and Hárslevelű grapes generally possess enough substance and weight by themselves and hardly need propping up with wood, which if anything cancels out the fruit.

Expert use of oak was, however, evident in a masterclass at the Tokaji Március tasting given by László Szilágyi, winemaker of Gizella Pince, which featured wines from his partly-terraced Szil-völgy vineyards, located on the southern slopes of Tokaj Hill, next to the village of Tarcal.

Since the 2013 vintage, Szilágyi has made Szil-

BBJ_2507_socialite.indd 21

völgy as a blend of Furmint and Hárslevelű (previously, he released the wines as single varietals). As the two grapes work in tandem to such devastatingly delicious effect in sweet wines, especially in Tokaji Aszú, you have to ask why more vintners aren’t pairing them together in dry wines.

Szilágyi stunned the local wine firmament last year when his Barát Hárslevelű 2015 claimed joint first place in Hungary’s “A 100 legjobb magyar bor” Top 100 wine contest, sharing the top spot with an Aszú from Dénes (the best wine is often an Aszú – Tokaj’s sweet wines are, and always will be, among the very best in the world). Despite being just 500 meters away from one another, the Hárslevelű wines that hail from the Szil-völgy and the deep loess of the Barát vineyards are worlds apart when tasted separately. The former comes from the rhyolite tuff that lies below the shallow layer of loess, and reveals a salty minerality, while the latter comes from deep loess and is exploding with tropical fruit. However, it’s more than a question of terroir, since the Szil-völgy is planted with Tarcal Hárslevelű clones. Meanwhile, those from Barát are the Pécs clone.

Indeed, the clones can also be considered part of the terroir, especially the Tarcal clone. The 2016 Barát Hárslevelű, while still a baby, looks set to be another fine wine with lots of that delicious tropical fruit evident and a smooth, but not flabby, finish Many wine lovers at the Tokaji Március tasting were talking about Tokaj Generation Y, not a reference to the band the Who, but a group of millennial Magyars making wine in Tokaj. All of the wines, made by Zsirai Kata, Dorka Homoky, Rémusz Dávid, László Kvaszinger and Ádám Varkoly, impressed. Dávid is also the winemaker at Erdőbénye’s exciting Budaházy-Fekete Kúria. Another emerging name to look out for from the picturesque village of Erdőbénye is Sanzon Tokaj. Not a member of the Tokaj Generation Y, but in his early 20s, Tomi Vincze dazzled with his fresh

but focused dry wines from close to Sárospatak, which is home to several upcoming producers. In fact, excellent Tokaj wine is now coming from well beyond the original Tokaj strongholds, such as from Szerencs, which always served as a gateway to the region, but now is worth stopping off at for the likes of the Montium cellar.

The Cultural and Conference Center of Tokaj town itself will host the fifth Great Tokaj Wine Auction on April 22, which gives bidders the opportunity to snap up unique lots. These wines, which are not otherwise available on the market, are offered as barrel and half Gönci barrel lots (136 liters or 68 liters), which will be bottled with the special Confrérie Auction label. Participating wineries at this year’s Great Tokaj Wine Auction are: Barta, Demetervin, Disznókő, Grand Toka , Kvaszinger Winery, Holdvölgy, Márton Birtok, Myrtus Winery, Pajzos Tokaj, Samuel Tinon, Szent Benedek, Szepsy, Tokaj Hétszőlő, and Tokaj Kikelet.

Lots range from dry Furmint and Hárslevelű to varietal Aszú and Eszencia, plus two selections by Tállya Wines and Tokaj Generation Y. There will be a blind tasting of auction lots in the morning preceding the auction itself, which will be held at 2 p.m. Last year, some 80 of the wines that went under the hammer found buyers, to the

The world-renowned region, situated in the country’s northeast, has had to reinvent itself due to demand for the sweet wine in which it excels being severely curtailed by changing tastes.

Accordingly, the region’s vintners have gone in a dry direction. overall tune of EUR 68,000.

Here are two dry wines from the excellent 2015 vintage:

Oremus Mandolás Furmint 2015 Owned by legendary Spanish winery Vega Sicilia, this go-to Furmint gets more elegant and refined with every passing year. Once a rather oaky proposition, the wood is now firmly in the background with the formidable fruit and fresh floral character coming to the fore. Zesty, yet also complex.

HUF 3,450 from Bortársaság

Gizella Szil-völgy 2015 50% Furmint and 50% Hárslevelű, 80% used barrels and 20% new. A case of everything being in the right place. It combines both Furmint’s focused structure and tension with Hárslevelű’s florality and lusciousness. Medium-bodied and airy but with lots of depth, juicy stone fruit and considerable length.

HUF 6,350 from Bortársaság.

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2017. 04. 05. 16:34

22 | 5

Socialite

www.bbj.hu

Budapest Business Journal | April 7 – April 20, 2017

WHAT’S AKVÁRIUM SPRING TERRACE Until April 13 Akvárium Klub 1051 Budapest, Erzsébet tér 12.

A friendly scene in the heart of the city center – and one of the main venues of the Budapest Spring Festival – Erzsébet Square’s Akvárium Klub presents a special program series for the first half of April to shake up sunshiny spring evenings: they set up a temporary stage to welcome popular Hungarian musicians and up-and-coming artists to give acoustic gigs and other exciting performances every day to entertain visitors on the lively terrace. Furthermore, other additional programs, like a kids’ corner, also await families here.

32ND TELEKOM VIVICITTA SPRING HALF MARATHON April 8-9 Margaret Island 1138 Budapest, Margitsziget The 32nd Telekom Vivicitta Spring Half Marathon entices enthusiastic runners

to Budapest’s beautiful Margaret Island to complete diverse distances amid an inspiring ambience. Within the framework of this two-day jogging jamboree, runners can take on a ten-kilometer Vivicitta and a 21-kilometer half marathon on Sunday, while on Saturday the focus is on shorter races ranging from 750 meters to seven kilometers for less-experienced runners.

The half marathon’s route passes by many of Budapest’s major sights, like the Chain Bridge and Parliament, and as an extra innovation this year, it can also be completed in pairs. Furthermore, refreshments are provided every fourfive kilometers, and several musical points make the race more enjoyable.

BUDAPEST ART WEEK April 18-23 Multiple venues An amazing festival of fine arts, Budapest Art Week, is happening for the second time in the Hungarian capital, inviting art lovers to admire the intriguing exhibits of more than 60 Budapest museums, galleries, and exhibition halls, alongside

Easter in Hungary April 14-17 Budapest and across the country In the Christian calendar, Easter (Húsvét in Hungarian) celebrates the resurrection of Jesus and marks the end of Lent. In

Hungary, Easter Sunday, Easter Monday, and – for the first time this year – Good Friday are public holidays, when Magyars host high-spirited celebrations that evoke old traditions and customs all around the country. In Budapest, the Várkert Bazaar near the Buda Castle awaits families with day-long festivities from April 15-17, such as a colorful Easter-egg exhibit that presents various traditional methods of egg painting, as well as artisanal activities, concerts, and a kid’s corner.

Meanwhile, the Easter Fair on Vörösmarty Square presents a wide range of folk-art merchandise and workshops with masters of various traditional crafts, while those who are curious about how Hungarians celebrated Easter in centuries past can visit the nearby town of Szentendre for its annual Easter Festival at the Skanzen open-air ethnographic museum, featuring concerts, egg-painting events, a carousel, dance shows, and the traditional “watering” of the girls.

nearly 70 other exciting cultural events – like guided tours, organized gallery walks, museum programs, and conferences – all accessible with just one ticket. Among the participating venues this year, are the Hungarian National Gallery, the Ferenc Hopp Museum of Asiatic Arts, the Kunsthalle (Műcsarnok), and the Castle Garden Bazaar.

This free Budapest festival and intellectual forum presents books by authors from all around the world, and is complete with colorful programs like book-signing sessions, cultural events, book launches, round-table talks, concerts, and many other exciting events. This year’s guest of honor is Turkish novelist and Nobel Laureate Orhan Pamuk.

INTERNATIONAL BOOK FESTIVAL BUDAPEST April 20-23 Millenáris Park 1024 Budapest, Kis Rókus utca 16-20.

Text provided courtesy of WeLoveBudapest.com

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Set to Carry on its Winning Streak

Rózsavölgyi Szalon has made a name for itself as the ultimate venue for one-of-a-kind theatrical and literary events with some 87,000 people passing through its doors during the five years of its existence. As founder and artistic director Zsófia Zimányi points out, having hosted 1,200 programs, including 25 world premieres and 17 Hungarian premieres, nearly all sold out, it is fair to say that Rózsavölgyi is now a key player on the map of the Budapest art scene.

This year marks the fifth anniversary of Rózsavölgyi Szalon. Are you planning a one-off big celebration, or will there be a series of events?

We have scheduled both. On April 13, an on-venue party will be held where hundreds of actors who helped our project come into existence and turn into such a hit have been invited. Our most devout guests will be there too, without whom we wouldn’t be where we are right now. Apart from showing a short film about how the venue was reconstructed into its current form, it promises to be an informal gathering with a lot of fun. On the other hand, our April narrative was built around the number five: tickets were sold at 15% off for instance, and there are also other gifts and discounts.

Did you anticipate such a big success within such a short time span?

BBJ_2507_socialite.indd 22

Not at all. It was an unexpected pleasure to see how it all evolved. My first thought was that mini-concerts and author-reader meet-ups would rule the day. But then there was a play I couldn’t do at Thália Theater, where I had worked before, and I decided to stage it at Rózsavölgyi. It was a blockbuster, so inspired by that, we started producing our own plays. Related interest turned out to be more intense than for music, not least because, in the meantime, major concert halls like the Music Academy had opened their own small capacity music halls.

But other theaters have smaller rooms for plays too. What makes your venue stick out of the crowd?

It works because we do it differently than others. We stage our own productions, for one. I have been reading day and night just to spot stories that would be great

for theatrical adaptation. Our other asset is that shows are presented here that have not been on stage in Hungary at all. The whole milieu is also unique: our salon holds 75 viewers. Without tables, it could go up to 120, but the salon format is a lot more interesting, so the tables are set to stay.

Are there any pieces in foreign languages that could be recommended to the expat community?

Even though our main focus is on plays, we still host several music shows. Initially we wanted to have English language shows, but interest was not strong enough. However, now our new venture, Magvető Café in Dohány utca, due to open on April 11, plans to give it another go. That place will be a lot more modern in terms design, and programs are meant to be connected closely with literature.

You are known for embracing firsttime authors who get the chance to present their art in Rózsavölgyi. Is this part of your mission?

One of our regular and popular features is to have book debuts. They are mostly from our publishing house, but occasionally others are given the opportunity too.

Your shows are sold out nearly all the time. Since capacity is given and, as you have just mentioned, you don’t want to sacrifice the salon milieu, how can you still improve performance?

Next year we are going to have more shows of a surrealistic genre, whereas this year will feature more Hungarian plays. Currently, sight is partially blocked from the very back when actors are in a sitting position, so that area needs to be elevated a bit. But, all-in-all, I wish to see us remaining as successful as we are; that is the plan.

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Budapest Business Journal | April 7 – April 20, 2017

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BBJ PARTNER CONTENT

Celebrated Budapest Spring Festival Kicks off European Season The Budapest Spring Festival (BTF) has grown into a wellknown brand, and is considered one of the most important artistic gatherings in the region, thanks to its high standards, artistic variation and large number of events. Beyond domestic visitors, a very significant ratio of international guests has been attracted to the festival, partly because, since its foundation — this year it is being organized for the 37th time — it has been the opening venue for the European spring festival season. We spoke with Teodóra Bán, the director of the Spring Festival, about its enduring appeal and highlights ahead.

What makes the festival so attractive?

In order to efficiently position the festival in the European scene, and here as well, we need sufficient financial background; that we have had for the past three years. State funding for the spring festival has grown significantly, and what is equally important, we can expect guaranteed money, therefore planning has become much easier. It is a wellknown fact that international stars have their schedules booked for years ahead; due to our financial security, we have a good chance of booking them well in advance.

The number of contributors has increased by at least 50%. This is the result of getting more institutions involved than previously, and artistic representation has become more vivid at the same time. The number of visitors has similarly grown in the past three years.

International guests are around 30-40%. We pay attention to contributing to making new productions happen, that may stay here in the country after their premiere, or even be performed abroad; we are aiming for the preservation of experiences. Our free-of-

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charge public space events should also be mentioned; that are gaining bigger weight in the framework of the festival, therefore the whole city can enjoy the milieu.

What factors are important when planning the venues?

Such a high-quality festival as the internationally embedded BTF naturally preserves its original characteristics. But it is very important to renew itself from timeto-time, as we get in touch with younger visitors from year-to-year. For the past four years, the festival has focused on the life of Ferenc Liszt. We have invited the best student of Sapporo’s Liszt Seminarium; this year the young Japanese talent Ryo Onoki performed a cello solo night. Renowned pianist Ivo Pogorelich, who is a Liszt specialist, performed the Dante sonnet at the Music Academy.

We are also commemorating some important historical events in Hungary, such as the 150th anniversary of the Austro-Hungarian Compromise of 1867 that established the Dual-Monarchy. The performance of Liszt’s Coronation mass is related to this. Along with Hungarian soloists, the Austro-Hungarian Haydn Philharmonic Orchestra, the Vienna State Opera and the National Philharmonic Choir will be performing, led by Bulgarian conductor Rossen Gergov. You can find further performances on btf.hu or in our fliers. The effect of Compromise also appears in our museum program, namely the “Treasures Under the City: Novelties from the past – Revealing the archaeological heritage of Budapest 1867–2005–2015” exhibition at the Budapest History Museum.

What events would you single out?

For the younger visitors, the new circus genre can be especially attractive, and is a novelty in Hungarian artistic life. This is not the first time that the domestic Recirquel has timed its premiere to be at the BTF. Its performance, entitled “Adieu!”, is about a husband and wife, going back in time. In the same genre, Yaron Lifschitz, Circa Ensemble and the Debussy Quartet also performs in Budapest.

The ballet troop of Slovenia’s Maribor National Theater will be performing “Peer Gynt” by choreographer Edward Clug. Of Romanian descent, he has processed Ibsen’s drama to Grieg’s music from a personal point of view. I believe that the performance will leave the audience in awe.

Chamber music is not missing from the program either. We have invited the Chamber Orchestra of Lapland, which will be

On April 1, hundreds of professional and amateur dancers, singers, and musicians paraded through the city’s central locations for the Festival Opening Promenade.

Slovenia’s Maribor National Theater will be performing “Peer Gynt” by choreographer Edward Clug. performing at the Pesti Vigadó. The Shanghai Quartet will be performing Viennese classics at the Music Academy. Classicus Ensemble and musical friends are looking for the answer as to whether muses listen amid the crackling of weapons? The “Great War”, that is World War I, gave us excellent chamber music pieces, which will be showcased during two days in four medley performance by excellent young artists.

Our mission is to present talented young artists and university students to the audience, to allow us to get to know the future stars of upcoming festivals.

Fischer Annie scholarship musicians will be performing this year once again. Concerts with the motto of “New ways to Beethoven” will be showcasing university student musicians tipping their hats at the great

composer, who Beethoven died 190 years ago in March.

We are happy to introduce far away cultures. This year we will be showing Korean music, theater and gastronomy to visitors, as well as Lebanese diva Yasmine Hamdan’s evening on the A38 boat.

We are also taking account of anniversaries this year. The life and works of Zoltán Kodály, who was born 135 years ago and died 50 years ago, is another focus for the BTF. His chamber pieces will be performed, and the dance canon of the Hungarian State Traditional Band will also commemorate him. During our choir celebration, his best pieces will be song, and closing the festival, his Hungarian folk opera “Háry János” will be performed in the Bartók Béla Nemzeti Hangversenyterem (Béla Bartók National Concert Hall).

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