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TELECOMS

Upward trend

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Just keep them happy

NEWS

Hungary posts best deficit figures ever The government deficit was at 1.9% of GDP, according to reports, but Eurostat’s questions about how this figure is calculated could potentially dampen the Economy Ministry’s victory celebration. 3

SPECIAL REPORT

Free Wi-Fi spreads across the land Between the efforts of the government and the country’s private telecoms, Hungary should soon have more than half a million hotspots providing free Wi-Fi to an eager audience. 20

BUSINESS

Photo: Mátyás Pödőr

Budapest’s biggest office deal in years When HB Reavis sold Váci Corner Offices to Zeus Capital Management for roughly €55 million, it was yet another sign of a real estate investment market regaining the ground it lost in 2008. 9

Alexandre Froment-Curtil, Vodafone Hungary’s consumer business chief, stresses the importance of customer perceptions. 19 SPECIAL REPORT

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FOCUS

SPECIAL REPORT

Smaller players help keep Hungary online

A weekend of the lush life in the countryside

A year of healthy growth for telecoms

Telecoms are not all multinationals: Hundreds of local SMEs serve various parts of Hungary with broadband connections. These firms fill a profitable market niche while providing a vital service. 18

Beautiful old villas boast five-star service, some of the country’s finest gastronomy, and pampering wellness treatments. We offer some suggestions for those who want to spend a couple of days like landed gentry. 23

The number of phone subscriptions was up in 2015, and the reach of the 4G networks expanded, as the sector enjoyed increased business. The trend is seen as justification for continued investment in infrastructure. 12

2016. 04. 06. 21:26

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BUSINESS JOURNAL at the This section looks for Hungarian telecoms. in the sector. been a good one specific successes The past year has while also highlighting industry as a whole

BUDAPEST

VOL. 24. NUMBER 07

APRIL 8, 2016 – APRIL 21, 2016

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

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Government’s plan to fight terror is scary Terrorists use fear to achieve their goals. Governments should not stoop to this tactic. On the heels of the attacks in Brussels last month, the government has proposed a package of laws restricting our civil liberties. There may be reason to improve anti-terror measures, but the government is insisting that the situation is so urgent that they must push through these measures with a fast-track procedure that limits debate in Parliament. Under proposals from Interior Minister Sándor Pintér, the government would have the right to look into people’s bank accounts and to spy on people’s phones. To make sure authorities have access to everyone’s phone, the proposal would outlaw encryption software – an intrusion on our privacy that is being fiercely opposed in democracies around the world. Once in place, such measures can easily be abused, which is why this level of domestic spying should

probably not be allowed. At a minimum, any legislation regulating this area must be carefully crafted to put in place checks on the authorities that wield such power. Earlier this year, the government failed to obtain Parliament’s support for a constitutional amendment allowing officials to declare a “terror state of emergency”, which would let them suspend a host of basic civil rights. The government is apparently hoping that fear stirred up since the Brussels attack will make members of Parliament, and their constituents, agree to measures that eliminate our rights. When a government uses fear as a bargaining chip, that government can become just as frightening as any outside threats that may be worrying us. Whatever anti-terror measures are put in place should be openly debated and achieved through calm, reasoned negotiation

Homelessness should be legalized in Hungary Parliament is scheduled to take up a proposal in midApril that would revoke a 2013 law making homelessness a petty criminal offense – legislation that no civilized country should have on its books. Homelessness is a social issue, and homeless people need our support. If there is anyone committing an offense, it is a society that allows homelessness to reach epidemic levels. Those who are forced to live in the streets are victims of that society, and it makes no sense to punish victims. The only apparent reason for this law, which was enthusiastically supported by Budapest’s mayor, is that people who live in the street create an eyesore for others. Some may feel more comfortable if the problem of homelessness is kept out of sight, but it is childish to think hiding from a problem will solve it.

Homeless people need social assistance. If they fear arrest, they will be afraid to seek that assistance, and the problem of homelessness will only grow worse. An NGO called The City is for All estimates that HUF 284,460,000 has been spent on either pushing the homeless out of sight or arresting and prosecuting them. That money, and more, needs to be spent on providing the homeless with shelter, employment assistance, medical and psychological treatment and any other help they may need. Mahatma Gandhi said, “A nation’s greatness is measured by how it treats its weakest members.” As long as homelessness is illegal, our nation is far from greatness. Revoking the 2013 law criminalizing the homeless is the civilized thing to do.

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Above, Erzsébet híd, or Elisabeth Bridge – named after Elisabeth of Bavaria who was assassinated in 1898 – is built in 1901. Spanning only 290 meters, it is the narrowest bridge over the Danube in Budapest. At left, the bridge is cleaned on March 19 by workers of Budapest’s Waste Management Service.

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2016. 04. 06. 21:26

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macroscope

NEWS

MSZP can seek Sunday closings referendum

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NEWS

Government could ban encrypted messaging

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Record low deficit posted for 2015 Eurostat may rain on the government’s parade by insisting that Eximbankʼs lending is included in the deficit accounting.

Numbers to watch in the coming weeks March inflation data and external trade in goods for February will be published on April 8. We’ll find out more details about the lingering industrial production on April 13, to be followed by February’s construction figures the next day. We’ll also learn about Hungarian salaries in January and February on April 20.

ZSÓFIA CZIFRA

The general government deficit as a proportion of GDP was 1.9% in 2015, the lowest such figure recorded, the Central Statistical Office reported on April 1. As preliminary data reveals, the HUF 625.5 billion deficit is 0.4 of a percentage point lower as a proportion of GDP than the deficit in 2014. While this record low is no April fools, Eurostat has raised questions about Hungary’s accounting that could change the bottom line. Economy Minister Mihály Varga boasted of the 1.9% of GDP budget gap at a press conference following the KSH release. Varga noted that the debt-toGDP ratio also turned out better than expected and was 75.3% last year instead of the planned 76.1%. The latter figure is well below the EU average, he added. The Hungarian government sent its Excessive Deficit Procedure (EDP) report, which complies with the methodological requirements of the European System of Accounts (ESA 2010), to the statistical bureau of the European Union, Eurostat, on April 1. In the meantime, the external vulnerability of the country continued to improve in the last quarter of 2015. The annual value of net lending rose to nearly 9% of GDP, and market players also repaid a massive amount of foreign loans. In light of these, the net external debt of Hungary decreased further and reached the level recorded in Poland. At the same time, short-term external debt had dropped to €21 bln by the end of the year, and the level of foreign exchange reserves thus remains well above investors’ expectations.

Hungary ready to take legal action However, some factors might yet jeopardize the victorious reports of Hungary’s sharply falling public debt, as Hungarian authorities are in dispute with Eurostat. According to portfolio.hu, the statistical bureau advised Hungary to classify state-owned Eximbank within the general government. If it did so, and the government included the lending of the bank in the general government finances, that would result in a rise in the country’s public debt for the past few years. Eurostat later confirmed portfolio. hu’s information.

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policies. It would be important to confirm whether the institution has changed its own activities or taken over new activities from the year 2012, and whether those activities have been directed by the government or not,” reads a report on Eurostat’s final findings after an EDP dialogue visit to Hungary in June 2014.

Industry slow-down lingers while retail sales take off

No fooling: Economics Minister Mihály Varga announces good news on the government deficit at the April 1 press conference. (Photo: MTI/Lajos Soós)

“If the professional debate ends unfavorably for us then we will turn to the courts. ... We find the issue raised by Eurostat slightly targeted.” Consultations are currently in progress, and there are several hundreds of billions of forints at stake. The ESA 2010 criteria appears to give Eurostat a valid argument in this case through its definition of “captive financial institution” as an institutional unit which does not engage in financial intermediation or in financial auxiliary services. As a general rule, such entities controlled by government should

be classified in the general government sector and not in the financial corporations’ sector. “If the professional debate ends unfavorably for us then we will turn to the courts,” Hungarian Economy Minister Mihály Varga insisted at a press conference. “We find the issue raised by Eurostat slightly targeted,” said Varga. He said that Eximbank’s lending takes the form of business loans that will return. Varga also stressed that Eurostat had failed to inform the Hungarian government about the issue. However, as portfolio.hu pointed out, the statistical office raised its concerns in 2014. “These kinds of activities could indicate that they are undertaken on the behalf of government in the context of implementation of economic and social

The poor performance of Hungarian industry continued, as the volume of industrial production dropped further in February 2016. On a month-on-month basis, industrial production was down 0.8%, which marks the fourth consecutive month of contraction. The production (adjusted for the leap-year effect) rose only 1.8% year-on-year in February. Detailed data will only be published next week, but the January trend seems likely to continue, when it was also vehicle production that performed more poorly than expected. The volume of retail sales, on the other hand, increased further in February, and showed a 6.5% (6.4% adjusted to calendar effects) increase from the same period last year. In January-February 2016, the volume of sales – also according to calendar adjusted data – was 4.3% higher than in the corresponding period of the previous year. Analysts expect further increases in the volume of retail sales in the remaining months of the year. Further good news arrived from the labor market at the end of March. As data released by KSH shows, the primary labor market employed nearly four million people between December 2015 and February 2016, some 62,000 more than a year before. KSH reported 4.241 million people employed during that period, of which 219,000 were part of the public works program. The number of Hungarians working abroad increased to 115,000. Hungary’s unemployment rate dropped to 6.1% between December 2015 and February 2016, compared with 6.2% a month earlier.

2016. 04. 06. 21:26

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04 News

Budapest Business Journal | April 8 – April 21, 2016

NEWS IN BRIEF Teachers’ union calls for day-long strike on April 20 Following the failure of seven hourlong negotiations with the Hungarian government, the strike committee of the Teachers Trade Union (PSZ) has started preparations for a full-day strike scheduled for April 20, PSZ head Mrs. István Galló said on April 5 at a press conference, according to reports. PSZ says it is planning a strike that will involve all the public education institutions in Hungary for an entire day on April 20. The union chief added that, though there had been some progress during the negotiations between PSZ and the government, the parties were unable to reach agreement on several key questions, and therefore a strike was needed. She said outstanding issues that have not been resolved include teachers’ demands to decrease the number of centrally required classes and to have more freedom in textbook selection. She said there was also no agreement on the details of the administrative system that the government promised to replace the current centralized Klebelsberg Institution Maintenance Center (KLIK). Galló added that Hungary’s Prime Minister Viktor Orbán has been informed about the strike and will discuss the details of it with Minister of Human Capacities Zoltán Balog in the following days, according to reports. According to Galló, one institution will be chosen in every school district to take care of the local students and provide food for them. This will be arranged by educators who do not wish to participate in the strike, she added.

Central bank governor proposes audit of foundations György Matolcsy, the governor of the National Bank of Hungary (MNB), on April 4 proposed the involvement of the State Audit Office (ÁSZ) in a review of the foundations of the central bank, according to reports, after Hungary’s Constitutional Court on March 31 struck down legislation that would have allowed MNB foundations to spend public money without disclosing how that money is spent. Responding to a question by an MP from the opposition Socialists, Matolcsy suggested ÁSZ could even become involved in the probe of the foundations retroactively, adding that the Pallas Athene Foundation (PADA) will release all data of public interest, Hungarian news agency MTI reported. He added that he acknowledges the decision of the Constitutional Court that funding for central bank foundations qualifies as public money and is subject to disclosure rules. MNB deputy governor Márton

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Nagy said on April 4 that the central bank respects the decision and foundations set up by the bank will provide all data requested. Legislation to classify central bank spending was pushed through Parliament on March 1 in an expedited procedure after a journalist sued to gain access to details of the spending by the MNBʼs PADA foundation. In a rare break with the wishes of the government that appointed him, Hungarian President János Áder on March 9 declined to sign that legislation, as well as a measure to make the operations of the Hungarian Post Office confidential. Hungary’s Supreme Court ruled on March 30 that the MNB must release data on all tenders managed by PADA up to the date of the data request by journalist Károly Csabai.

Official: CIA has no information on terrorist threat to Budapest Contrary to a report published by Polish daily Rzeczpospolita, the CIA has no information on a potential terrorist threat to Hungary, György Bakondi, the chief domestic security advisor to the prime minister said on April 6, according to reports. During an interview with Hungarian state-owned all news channel M1, the security advisor said that after the Polish daily’s report surfaced, the Hungarian government requested information directly from the U.S. agency. The CIA said it had no information about any specific terrorist threat to Budapest, Bakondi said. The CIA did not confirm the content of Rzeczpospolitaʼs report, he added. Bakondi said if a threat existed in Hungary, the United States would inform Hungarian officials as Budapest regularly receives out-of-country information due to its cooperation with international intelligence agencies.

Varga: Hungary fully repaid 2008 IMF-EU loan Hungary has fully repaid loans it took out in 2008 from the International Monetary Fund (IMF) and the European Union and the World Bank. The last €1.5 billion installment was paid last week, National Economy Minister Mihály Varga said on April 6, according to Hungarian news agency MTI. Varga hopes that the repayment of the loan will improve Hungary’s standing among credit rating agencies. The minister said that financial investors now have a better opinion of Hungary’s economic performance than big credit rating agencies. According to Varga, it would be favorable if Christine Lagarde, the Managing Director of the IMF would congratulate Hungary on its debt repayment. The €1.5 bln installment

President Áder visits Albania Hungary’s President János Áder visits the Albanian National Shrine to the Martyrs in the capital city of Tirana on April 6 during an official two-day mission to Albania. After talks with Bujar Nishani, his Albanian counterpart, Áder said the EU must be ready to assist Albania if that country becomes a new migration route. (Photo: MTI/Noémi Bruzák)

in question was due to be repaid to the European Commission as Hungary already repaid the outstanding balance of its IMF loan in November 2013. In 2008, Hungary reached an agreement with the IMF, the EU and the World Bank on an economic rescue package to help the country bolster its economy in the face of the global financial crisis. The IMF offered Hungary a €12.5 bln loan, the EU a €6.5 bln loan and the World Bank a €1 bln loan.

Report: EC suspends payment of education funds to Hungary The European Commission said that it would block the transfer of approximately HUF 40 billion in EU grants for the upgrading of educational facilities in Hungary, according to a report published by online portal index.hu on March 30. The EC justified the move by saying that only a small portion of funds transferred to Hungary were in fact used for the purposes outlined in the Hungarian government’s original requests for funding, according to reports. State Secretary of the Prime Mister’s Office Nándor Csepreghy told local TV station RTL Klub that he does not anticipate the EC withholding more

than a few million forints and that the schools involved in the scandal will be held responsible for covering any losses incurred.

Socialists can seek referendum against Sunday closings Socialist MP István Nyakó can start collecting signatures for a referendum to revoke the law requiring most retailers to close on Sundays after a competing question supporting the legislation was rejected by Hungary’s Supreme Court (Kúria) on April 6, according to reports. On February 23, Nyakó went to the National Election Committee (NVB) office to petition for the right to hold a referendum against the Sunday closings law, which went into effect last year. Nyakó said he was obstructed by heavy-set bald men on that day, and as a result, a woman calling herself Mrs. Erdősi, who is apparently the wife of a former Fidesz mayor, was able to file a referendum in support of the Sunday closings law. Since only one referendum is allowed on a specific topic, Nyakóʼs referendum against the law was effectively blocked by Mrs. Erdősi. The Socialists claimed that Nyakó was

2016. 04. 06. 21:26

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Budapest Business Journal | April 8 – April 21, 2016

physically prevented from conducting his democratic business by the thugs who accosted him outside the NVB office and said their referendum application should be accepted instead of Mrs. Erdősi’s. The top court agreed. Now the Socialists can start collecting signatures. If they can collect 200,000 signatures, a referendum can be held on the following question: “Do you agree that the Hungarian Parliament should eliminate the legislation restricting retailers to stay open on Sundays?”

Lázár: Reorganized Treasury to manage ‘all payments’ Once the two-phase reorganization of Hungary’s State Treasury is complete – in a little more than a year – the treasury will be in charge of all state payments, Cabinet Chief János Lázár said on March 31 at his weekly press conference. The first phase of the reorganization is scheduled to be wound up in the summer and the second by the summer of 2017, by which time all other organizations making state payments will have been abolished, Hungarian news agency MTI cited Lázár as saying. The reorganized treasury would be responsible for payments such as pensions and health insurance benefits, Lázár said, while ministries would be in charge of making policy decisions. Lázár said Prime Minister Viktor Orbán is resolute in dividing governmental task into two separate tiers, one for strategic decision making and regulating and one for executive functions, MTI reported. Lázár added that changes in the treasury’s personnel could take place, as well as an upgrade of its IT infrastructure.

Report: Government could ban encrypted messaging Hungary’s Interior Ministry is drafting an action plan to fight terrorism, under which those who use services on their smartphones to encrypt the means of communication could be imprisoned for up to two years, Hungarian daily Magyar Nemzet reported on April 1, based on a document it had acquired. Cabinet Chief János Lázár said on March 31 at his regular weekly press conference that services using encryption would not be banned, but intelligence services would ask service providers to let intelligence services monitor the communication flow in a terror situation. Decoding encrypted messages, however, is not always possible. For example, Hungarian startup CrypTalk, which received an innovation award in Hungarian Parliament on March 31, uses no server for communication. Messages go directly from one device to another, and encryption is so complex that not even the developers can decode messages. According to Magyar Hírlap, the action plan would permit the government, if circumstances dictate, to restrict public gatherings and install recording devices in “areas of outstanding importance for the operations of the state”, in order to uncover possible terrorist activities.

Banking Association allowed to pay fine in installments The Hungarian Banking Association has already paid two installments amounting to HUF 400 million of a HUF 4 billion fine levied by the Hungarian Competition Authority (GVH) on charges of cartel activity, Hungarian daily Magyar Idők

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Dairy farmers protest in Budapest Hungarian dairy producers march across the Chain Bridge in Budapest on March 4, accompanied by dairy cows, in a demonstration intended to help make people realize that, according to the farmers, European Union and Hungarian state support for the sector is insufficient and ineffective. Dairy producers said they hope to raise the awareness of consumers about the high ratio of imported dairy products in Hungarian stores. (Photo: MTI/Zoltán Máthé)

reported on April 5. The association earlier appealed against the fine. On January 26 the association filed a court appeal against the fine, Levente Kovács, chief secretary of the professional body, said. The association is asking the court to revise the competition office’s decision and to declare that no infringement of rules and regulations took place. The association also asked the court to suspend the payment of the fine. However, MTI reported on that day that GVH had agreed to a request by the banking association allowing it to pay the fine in installments. GVH fined the Hungarian Banking Association HUF 4 billion and the International Banker Training Center a further HUF 15 million for charges of cartel activity on January 12. The competition office fined the association for a database it operated with the involvement of the training center, allowing banks to share business secrets for a period of 12 years. According to GVH, the database provided too much information, violating both Hungarian and European Union competition rules.

Government to submit 2017 budget plan on April 26 The Hungarian government is planning to submit a draft of the 2017 budget to Parliament on April 26, so MPs can vote on it on the last day of the spring session at the latest, according to a document posted on the website of the National Economy Ministry, Hungarian news agency MTI reported on March 29. The various government departments are expected to send their chapter-based

budget proposals to the Economy Ministry by April 1. Following government-level discussions, a budget proposal is expected to be submitted by the end of April and the chapter-specific draft could be submitted to Parliament on May 6. While drafting the budget, the government is also working on an update of the Convergence Program for the European Commission which will likely be submitted in April. The 2017 budget will concentrate on increasing employment, achieving economic stability and continuing to decrease the ratio of government debt compared to GDP.

KSH: External trade surplus down €174 mln Hungary’s external trade surplus was down €174 million to €530 mln in January as compared to the same month a year earlier, with the export volume growing by 1.6% and import volume increasing by 6.2%, Hungary’s Central Statistical Office (KSH) reported on April 1. The value of exports amounted to €6.8 billion and the value of imports to €6.3 bln in January, according to data released by KSH. In euro terms, exports increased by 0.9% and imports by 3.9% in January as compared to the same month a year earlier. The volume of machinery and transport equipment rose by 1.6% in exports and 3% in imports, while the export and import volumes of manufactured goods were up by 3% and 9.7%, respectively, KSH said. KSH data show that the import volume of fuels and electric energy increased by 13%, while the export volume of food, beverages and tobacco decreased by 4.6%. The volume of exports to EU member states rose by

3.5% and the volume of imports from the EU was up 5.3%, KSH said, adding that in extra-EU trade, the volume of exports fell by 6%, while the volume of imports grew by 8.7%.

Lázár submits bill for transparent EU funding applications Hungary’s Cabinet Chief János Lázár on April 6 submitted a bill to Parliament that would change the way European Union funding applications in Hungary are evaluated to make the process more transparent, according to reports. The bill aims to reorganize the framework for evaluating funding applications to “guarantee that the assessment takes place solely on the basis of professional policy considerations, and furthermore ensures independence from the interests of any outside, market player, as well as increased objectivity and transparency”, Hungarian news agency MTI reported.

KSH: Retail sales up 6.5% in February The volume of retail sales in Hungary increased by 6.5% in February according to raw data and by 6.4% adjusted for calendar effects compared to the same period of last year, Hungary’s Central Statistical Office (KSH) said in a first release of data published on April 5. Adjusted for calendar effects, the volume of sales increased by 4.9% in specialized and non-specialized food shops, by 7.5% in non-food retail shops and by 9.1% in automotive fuel retailing, according to the report from the KSH.

2016. 04. 06. 21:27

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MVM welcomes new CEO György Major, who earlier served as leader of the sales department at MVM Partner Zrt., was appointed the companyʼs chief executive officer effective April 1. The new leader said his aim is to help the company preserve its leading role in the retail electricitysupply market in Hungary and to strengthen its role in natural gas trade as well. Major, who graduated as an electrical engineer and economist, has been with the company for seven years in many leading positions. Prior to that, he worked for state-owned postal service provider Magyar Posta as director of sales, and also worked as the CEO of ELMŰ-ÉMÁSZ Ügyfélszolgálati Kft.

Courtyard by Marriott Budapest City Center welcomes new general manager Catalina Susan was appointed the new general manager for the Courtyard by Marriott Budapest City Center, arriving in the capital from her post as director of finance at the Warsaw Marriott Hotel. During her ten-year career with Marriott International, her previous positions included senior assistant controller at the JW Marriott Bucharest Grand Hotel and at the Warsaw Marriott Hotel where she had the opportunity to lead the Finance Department as director of finance. She has comprehensive experience and knowledge in new business development, strategic planning as well as strong leadership skills, the press release said, adding ADVERTISEMENT FLAT TO RENT from owner in centrally located Ráday Street (IX. district), 3 minutes walking distance from Kálvin Square. Historical building in good condition. 80 m2 elegant, luminous apartment fully renovated in 2015. Living room, two bedrooms, two bathrooms (bath + shower), kitchen equipped, huge built-in wardrobes. Not furnished. Parking in the courtyard included. 3-storey building, 2nd (top) floor. 900 euros/month + charges. Please call: +36 20 392 03 44

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that she facilitates an enviable level of quality, service and innovation for business and leisure travelers visiting the city.

ICE-Italian Trade Promotion Agency welcomes new director Dr. Marco Bulf was appointed director of the ICE-Italian Trade Promotion Agency (ITA), the mandate of which is to assist and facilitate Italian companies, particularly small- and medium-sized enterprises on their way to foreign markets. Bulf has plans to commit all resources available to meet the needs of Italian companies interested in entering the Hungarian market. He graduated in law, has significant experience within the organization, in particular in the area of the planning and evaluation of performance. The ITAʼs aim is to improve cooperation with the Italian Chamber of Commerce for Hungary (CCIU), as the CCIU mainly assists Italian companies already present in Hungary and it has the necessary resources to support Italian companies exploring prospects in the country, the ITA said.

Six lawyers receive promotions at Kinstellar Hungary Simultaneous to the opening of its ninth office in Kyiv, Ukraine, Kinstellar announced a round of new appointments at its local office. Ákos Nagy (pictured) was promoted to counsel and will focus on corporate M&A, as well as compliance, risk and sensitive investigations. Kinstellar Hungary also announced five other promotions at its firm including Dalma Ördögh to of counsel; Eszter Ritter and Balázs Sepsey to managing associates; and Zsuzsa Andrékó and Máté Nagy to senior associates. “These promotions reflect not just the office’s exceptional performance in the previous years’ efforts, but also the individual, many years of study, training, dedication and of course, plain, old-fashioned, hard work,” said Csilla Andrékó, Kinstellar Hungaryʼs managing partner.

COMPANY NEWS Central bank suspends trade of Norbi Update Lowcarb A day after the National Bank of Hungary (MNB) announced it fined Hungarian lifestyle and nutrition company Norbi Update Lowcarb Nyrt. HUF 1 million, the central bank said trading in the companyʼs shares has been suspended, according to a press release issued on April 5. MNB charged the company with violating rules related to providing information in connection with Norbi Update Lowcarb. The central bank said it closely monitored the activities of the company in the recent period and charged the company with failing to publish the number of voting rights related to its shares, the press release said. The central bank urged the company to immediately provide information in connection with the issues the financial watchdog has not yet received and which are necessary for trading the shares of a company listed on the Budapest Stock Exchange. The MNB said on April 4 that the company posted information and announcements on its official Facebook page and in the press that were not submitted on time or at all to the financial market watchdog, and as such was in violation of disclosure rules, according to reports. The central bank warned the company to refrain from such practices in the future.

April 1 following nearly four months of negotiations, the planned strike by plant employees was cancelled, according to reports. An agreement was also reached on a one-off wage top-up amounting to HUF 20,000, Audi Hungaria’s spokerperson Mónika Czechmesiter reportedly said. AHFSZ established a strike committee on March 21 after negotiations on a wage increase for employees at Audi Hungaria’s plant in Győr failed. The AHFSZ asked for at least a HUF 15,000 uniform raise to basic wages, retroactive to January. Furthermore, the union also asked for a revision to the current salary system, and called for the creation of a “working group” to decide on a new wage system.

Vodafone Hungary to take over Tesco Mobile

Israeli drugmaker Teva will start production in the summer at its base in Sajóbabony, which was expanded with an investment of HUF 2.3 billion, the companyʼs local unit said on April 4, according to Hungarian news agency MTI. Teva began the expansion last September. Teva has invested HUF 350 bln in Hungary over the past 20 years. It employs more than 3,000 people at three bases in the country, in Debrecen, Gödöllő, near Budapest and in Sajóbabony.

Following Vodafoneʼs takeover of Tesco Mobile during the period of April 6-16, Tesco Mobile customers will no longer be able to sign new subscriptions for mobile services through Tesco, Hungarian online daily index.hu reported on April 1. Although services are expected to continue uninterrupted, as of April 5, topping up prepaid cards for already active Tesco Mobile subscriptions cannot be carried out until the takeover is complete, index.hu added. Switching services to Vodafone will require an upgrade of internet, MMS and voicemail settings, for which customers will receive a text message. After the switch, some tariffs will still be available, however, certain options and conditions could either change or become obsolete. After reports surfaced on February 24 that Tesco Mobile could cease to exist, it was reported that the Hungarian clients of Tesco Mobile were eligible to cancel their subscriptions effective immediately if the level of service deteriorated in any way. Tesco Mobile has operated in Hungary since March 2012, and was founded by Vodafone and Tesco Global Aruhazak Zrt. with a 50/50 stake.

Audi Hungaria Motors signs agreement with trade union

Waberer’s revenue up 5.3% in 2015

The management of the Hungarian plant of German car manufacturer Audi signed an agreement with Audi Hungaria Independent Trade Union (AHFSZ) on April 4 to raise the wages of plant employees by HUF 15,000-20,000 per month, according to reports. As a result of the agreement, which was reached

Hungarian road haulage company Wabererʼs Internationalʼs reported a 5.3% increase in revenue to €522.5 million as compared to 2014, despite less than favorable conditions in the road transport sector, according to a press release issued by the company on March 25. Waberer’s net income was up 12.1% on an annual

Teva to launch production at expanded plant in summer

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Budapest Business Journal | April 8 – April 21, 2016

basis in 2015, reaching €12.4 mln while EBITDA was €69.3 mln, amounting to 3.1% more than in 2014. The company attributed an overcapacity in the logistics sector to a shortage of truck drivers and the EU embargo against Russia as well as the migrant crisis in Europe, which caused stricter border and traffic controls across the EU. Wabererʼs International currently has 5,700 employees with subsidiaries in Poland, Romania, France, Germany, Italy, and the United Kingdom, Hungarian news agency MTI reported.

Report: Mercedes recalls some cars from Kecskemét plant

German car manufacturer Mercedes is recalling some of the vehicles that were produced at its Hungarian plant in Kecskemét, because wheels on the right side of the cars could fall off while in motion, Hungarian online daily origo. hu reported on March 30. Cars that were manufactured on December 8, 2015 are being recalled as the automated process of tightening screws on the wheels left some of the screws loose and wheels could fall off during use as result, origo.hu reported. Only B class Mercedeses and CLAs that were produced on December 8 are involved in the recall. The actual number of vehicles being recalled was not revealed in reports. The recall is necessary in order to monitor the screws and the running gear, origo.hu added.

Richter CEO confirms HUF 15 bln expansion plans

Gedeon Richter CEO Erik Bogsch confirmed on March 30 that his drug manufacturing company will expand its Debrecen-based biotechology plant at a cost of HUF 15 billion, Hungarian news agency MTI reported. Bogsch added that the expansion, which is expected to raise headcount at the plant by 125, is scheduled to be finished in 2018. The plant that will be expanded was established in 2012 for HUF 25 bln and currently employs a staff of 200 highly-qualified experts, Debrecen mayor László Papp said at the press conference, MTI reported. Bogsch noted that Richter is the sole company in the region that conducts original pharmaceutical and biotechnology research, on which it spends 12% of its revenue, or more than HUF 40 bln a year, MTI reported.

Top investors in Hungary awarded by HIPA The Hungarian Investment Promotion Agency (HIPA) has awarded outstanding investors in Hungary for their activities in 2015, during the “Investor of the Year” awards ceremony held in Budapest this past weekend, according to a press release issued by the agency on March 29. Investors that made the largest contributions to the economy and to society as a whole through the creation of jobs and the growth of the SME sector received awards in seven categories. Minister for Foreign Affairs and Trade Péter Szijjártó and HIPA President Róbert Ésik were in attendance at the ceremony, the press release noted. Awards went to the following recipients: Samvardhana Motherson Peguform (SMP) for Largest Greenfield Investment of the Year, Mercedes-Benz for Business Expansion of the Year, Continental for Company of the Year for Job Creation, Hellmann Shared Service Center Kft.

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Borg Warner expands Dr. Judit Czunyi-Bertalan, government commissioner for digital content development, speaks in Budapest at an April 6 press conference where it was announced that the Hungarian subsidiary of U.S.-based automotive supplier Borg Warner is expanding its Hungarian plant in Oroszlány – a development that is expected to create 600 new jobs in the country. The HUF 15.5 billion expansion of the plant is being supported with a HUF 1.7 bln state grant, according to reports. (Photo: MTI/Tibor Illyés) for SSC Project of the Year, Bosch for Company of the Year for R&D Investment, Jászfényszaru Industrial Center for Industrial Park of the Year and Magyarmet Finomöntöde Kft. for Supplier of the Year. “Domestic investment promotion closed an outstandingly successful year in 2015: HIPA successfully negotiated 67 investment projects to completion, which corresponds to a nearly 12% increase compared to 2014. As a result of these projects, about 12,995 new jobs may be created, which is almost 21% more than in 2014,” the press release noted.

Research: Netflix could reshuffle Hungarian TV market The U.S.-based, on-demand TV service Netflix, which launched operations in Hungary in January, could reshuffle the Hungarian market of conventional TV and online video services if it offers more Hungarian-language content, according to research by eNet issued on March 30. According to eNet, Netflix could satisfy the needs of TV and movie enthusiasts by offering a wide range of programs around the clock legally, without advertisements, but thus far the language barrier prevents it from dominating the market. The research found that watching TV series or movies on a television screen remains one of the most popular pastimes in Hungary, but most viewers watched films dubbed into Hungarian. Even though Netflix has joined conventional TV service providers as a new market player that offers commercial TV programs without advertisements, the service is not currently a major threat to Hungarian

service providers because relatively few people are taking advantage of the free test period, eNet said. According to eNet, if Netflix offered primarily dubbed content, or at least Hungarian subtitles, and also a lower subscription fee and a wider program range, Netflix could become a significant player in the Hungarian TV market.

Hungarian competition authority fines Fressnapf HUF 100 mln The Hungarian Competition Authority (GVH) fined the Hungarian branch of pet food and equipment retailer Fressnapf HUF 100 million on charges of unfair business practices during a promotion campaign in 2015, Hungarian news agency MTI reported on March 31. According to the authority, Fressnapf changed the conditions of the promotional campaign to the disadvantage of consumers when the company found that the total amount of discounts on offer far exceeded the amount they had planned, MTI reported. Beyond the fine, GVH also instructed the company to offer compensation to consumers adversely affected by the promotion, and to publish the GVH decision at its stores and on its website.

Report: Airbnb listings up 70% in Hungary The number of listings posted by Hungarians on sharing economy website Airbnb rose by approximately 70% over the last year as compared to the previous year, the company told Hungarian economic daily Világgazdaság on April 6. Listings in the country reached 8,100

in January, as compared to 4,800 in the same month a year earlier, the company told the daily. An annual flat tax of HUF 1,500 per square meter is planned for users that rent homes through Airbnb under a proposal submitted by the ruling Fidesz party to the cabinet, according to reports published on March 25. Airbnb has over 1,500,000 listings in 34,000 cities and 190 countries, according to reports.

EMA begins evaluation of Richter’s cariprazine

The European Medicines Agency (EMA) accepted Hungarian drugmaker Gedeon Richter’s regulatory submission for cariprazine, a novel antipsychotic for the treatment of schizophrenia in adult patients, Richter announced on March 29. Following its FDA approval in September 2015, the product was recently launched in the United States under the trademark VRAYLARTM for the treatment of both schizophrenia and bipolar mania, the press release by Richter noted. Cariprazine was discovered by Richterʼs scientists and is licensed to Allergan (earlier Forest/Actavis), in the United States and Canada. The European application for the treatment of schizophrenia includes results from three short-term, placebo and partly active controlled positive trials in over 1,800 patients and one long-term trial, using the change from baseline in Positive and Negative Syndrome Scale total score and the time to relapse as primary efficacy endpoints, Richter said. A clinical trial with positive results was also carried out in patients suffering from symptoms of schizophrenia, the company added.

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Budapest Business Journal | April 8 – April 21, 2016

Customer experience pros promote perceptions

Develor, an international consultant specializing in customer experience, and other experts who attended the firm’s annual CX conference, tell the Budapest Business Journal how companies can build loyalty and long-term business. CHRISTIAN KESZTHELYI

The best product in the world may not be enough to ensure business success if customers are not happy with it. Experts in the field of “customer experience” say that good perceptions are often more important than good quality. “People are highly emotional beings. We make decisions with our hearts and justify them with our heads,” Matt Bateson, the customer experience strategy director at Oracle in the United Kingdom, told the Budapest Business Journal. “Differentiation is not about price; it’s not even about function. It’s about how you make customers feel. This is why customer experience is the fundamental premise underpinning any business.” Bateson came to Hungary to give a presentation at the March 9 International Customer Experience Conference, organized by Develor in the Budapest Hilton. Develor, an international consulting firm, has been holding this annual conference in Budapest for several years now. Based in Hungary, Develor has offices in 12 countries, and through their projects have a presence in more than 30 countries. The firm offers business training and consulting in a range of areas, including a variety of customer experience solutions.

Importance of customer experience “Most companies in the relevant industries have already realized that they cannot fulfill constantly increasing client needs if they continue the old routines,” Develor CEO Csaba Szabó told the BBJ. “Our ‘International Customer Experience Survey’ proved that even the best customer service providers face a trend of decreasing satisfaction and missing loyalty from their customers. Customer experience is about emotional bonding and keeping clients engaged with a brand and a product – and about making them the voluntary ambassadors of a company.” According to Develor’s “International Customer Experience Survey”, corporate decision makers said that 21% of total income loss takes place when a company fails to provide a positive and brandconsistent customer experience. “Simply making clients satisfied will not provide the solution to the problem, as we cannot expect any long-term commitment from them, and satisfaction is just the basic level that must be

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Develor’s Customer Experience Conference at the Budapest Hilton on March 9.

“Customer experience is about emotional bonding and keeping clients engaged with a brand and a product – and about making them the voluntary ambassadors of a company.” reached,” Szabó explained. “The question today, and in the coming decade, is how to operate an entire organization, including the back-office, in a way that delivers constant high quality service and exceeds the clients’ expectations.” A good customer experience does not have to mean that a customer never has a problem with a product. As Develor explains in its educational material, if a customer encounters problems with the services or products a company provides, but can find instant assistance and solutions from the company, the satisfaction of the customer actually grows. This can lead to loyalty and, in the long-term, advocacy for a product. A customer whose problems are solved in a satisfying manner will not only stay with a company but will also promote the company among their peers, according to Develor. Felix A. Tena, chief executive front officer of Imaginarium, a Spanish firm specializing in toys and games, gave the keynote address at Develor’s conference. He told the BBJ: “Customer experience is everything. It is what determines the relationship a customer will have with your brand. It does not matter if it is a relationship of five seconds or 30 minutes. It will define the probability of purchase at that moment (conversion rate) as well as the probability of that same customer coming back (loyalty). Brands represent complex things in the minds of people. A well thought-out and executed customer experience will clarify the role of the brand in the customer’s mind.”

Felix A. Tena of Imaginarium.

Develor CEO Csaba Szabó.

According to another conference participant, Igor Tóth, marketing director of O2 Slovakia, a strong customer experience is “essential if you want to build a long-term relationship and exchange value within it”. He added: “By developing customer experience, you can nurture the relationship.”

Bateson recommended an oldfashioned customer-is-always-right approach. “Firms should leave their baggage and opinions at the door,” he said. “Decision makers must realize that their opinion is completely irrelevant. Customer behavior is the only source of truth – the rest is just noise.” But giving customers what they want is not as easy as it sounds, according to Szabó, who pointed out that it is not easy to figure out what people really want. “It’s a naive approach that we sit together for a half day and figure out what to change and how to deal with customers in the era of customer experience. Much more effort, creative energy and disruptive thinking is needed,” Szabó said. “This is where an external consultant comes in: Benchmarking is inevitable, ideas from other industries can work perfectly and professional guidance has key role in creating a really professional customer journey map, front-office behavior standards and a customer experience-aligned governance model for line managers.”

Challenges to tackle when planning CX According to Toth, customers today demand fast services and easy solutions for any product-related concerns that may arise. For this reason, one of the biggest challenges to a good customer experience is “to stay simple and customer focused, with no compromise”, Toth said. “If a company wants to differentiate itself from others, it needs to stay above the rest with its unique values and clear strategy.” Tena similarly recommended giving priority to customer focus as a way to stand out. He maintained that simply thinking about cutting costs and keeping prices low “is shortsighted and is not sustainable; it drives zero differentiation”.

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Budapest Business Journal | April 8 – April 21, 2016

REAL ESTATE NEWS

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Váci Corner offices sold in year’s biggest deal

Zeus Capital Management has purchased the 21,000 sqm facility in the Váci út business corridor from HB Reavis. GARY J. MORRELL

In Hungary’s biggest office deal in several years, Zeus Capital Management completed its first Budapest office transaction of the year with the purchase of the 21,000 sqm Váci Corner Offices in the Váci út business corridor from HB Reavis, according to a March 31 announcement. The major transaction is being taken as a further sign of the improving investment market. The first Hungarian office to be development by the Slovak-based developer, Váci Corner was delivered in 2014. Designed by the prolific Hungarian architect, László Szász, it was awarded BREEAM Excellent accreditation and subsequently achieved full occupancy. The deal is an indication of the Deal of the year, and then some: Váci Corner Offices. attractiveness of the sector to new equity as financiers on the transaction. “We looking to enter the market. Zeus Capital Management is a private “This is the largest office transaction took into consideration the sustainability equity fund launched in 2007. The in several years and further underlines and location of Váci Corner and the fact acquisition was made by its commercial the fundamentals of the Budapest market that it is fully leased,” commented Gábor properties investment platform dedicated as an increasingly attractive capital city Pető, director of real estate finance at to Central and South Eastern Europe; the to invest in, and I regard this is the first UniCredit Hungary. fund has previously invested in highof many investment transactions,” said The transaction was concluded for an end residential real estate in Bulgaria Tim O’Sullivan, head of capital markets estimated €55 million, making it the and Romania, although it has adapted its at CBRE Hungary, which acted as single biggest office transaction for some focus onto office product. consultant on the deal. time. Currently prime Budapest office HB Reavis was founded in 1993 in A further sign of the improving market yields stand at circa 7% and could soon Bratislava and now operates in Poland, Czech Republic, Slovakia, Hungary, is that UniCredit Hungary participated fall below that.

the United Kingdom and Turkey. The company has developed a total of 864,000 sqm of offices, retail, entertainment, and logistics facilities with a further one million sqm of developments at the planning and construction stages. “Interest for Váci Corner Offices came from both renowned international and domestic investors. We are now planning to launch a 130,000 sqm project in Budapest,” commented Marian Herman, chief financial officer of HB Reavis.

Poll finds CBRE conferees expect investment to grow

Optimism was on display as most participants said they expect investment volume to reach around €1 billion this year. GARY J. MORRELL

The nearly 50 participants at the CBRE Investment Breakfast 2016 at the Sofitel Hotel are much more confident that investment volumes will increase in Hungary this year. In the “Hungarian Investment Survey 2016” conducted and compiled at the April 5 event, 50% of respondents answering the question “What is your estimation for this year’s commercial property investment volume in Hungary?” expected investment volume to be in the region of €800 million-€1.2 billion. The proportion of participants opting for no increase fell to 6%. Lóránt Varga, CEO of CBRE Hungary, emphasized the significance of the fact that Budapest came in the top ten

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Europe, the Middle East and Africa (EMEA) countries in which to make a property investment purchase according to CBRE’S “2016 EMEA Investor Intentions Survey”. CEE investors and developers are increasingly considering Hungary and Romania as alternative CEE business destinations to the Polish and Czech markets, where increasing competition for product is causing yields to fall and the development markets are also increasingly competitive. With regard to the type of investors active in Hungary, 44% of the participants expected domestic investors to be the most active players. This compares to 25% who expected “old core investors including German open-ended funds” to be most active. In general, the German institutional investors are expected to return to Hungary in a second wave of renewed investment activity. Almost 50% of participants agreed with CBRE that a credit rating upgrade for Hungary will occur this year. However, the impact will be quite moderate. “Most of the investors have already priced in the changes,” said Lóránt Varga.

Lóránt Varga, CEO of CBRE Hungary. Office is still the most popular asset class for investment, as 44% of respondents opted for an office development under construction. However, retail is becoming increasingly popular, as 30% voted for

a portfolio of high street retail units. Interest in industrial also increased to 13%. The problem, however, remains the lack of available office and retail product, with presentations on the office and shopping center markets indicating a “dry pipeline”. Both CBRE and its respondents agreed that there is the start of a gradual improvement in both the occupational and investment markets, with current market patterns suggesting sustainable growth: 35% of participants voted for the option – a sustainable increase to a level closer to where Hungary should be. With regard to yields, 72% of respondents expect they will continue to decline, albeit to a gentler extent. Gábor Borbély, head of research and valuation at CBRE Hungary expects office and high street yields to compress to 6.50-6.75%. Interest in core assets with a stable cash flow continues to be the most attractive with 39% of respondents opting for this asset class, compared to 35% who preferred assets with valueadd opportunities.

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Budapest Business Journal | April 8 – April 21, 2016

CEU BUSINESS SCHOOL

Farming: Waking the sleeping giant György Bőgel Professor of Management CEU BUSINESS SCHOOL

Hungary’s once-mighty agricultural sector could benefit from technology, and there are some exciting developments worth taking up. Agriculture appears to be a sleeping giant to many of us. The sector is huge, but its economic significance within the economy (measured as a ratio of GDP) has been in almost continuous decline throughout the last 50 years. When digital capabilities are discussed, agriculture is frequently regarded as a field where one might least expect a technological revolution. Regarding ICT solutions and digital mastery, many observers describe the industry, lagging well behind others, as a beginner at best. Our sleeping giant faces new challenges. Due to dramatic world

It is highly probable that we will need to grow 50-100% more food within a few decades to meet the needs of a world of more than nine billion people and the emerging (mainly urban) middle class. population trends and the rise of a new middle class, demand for agricultural products is continuously growing. It is highly probable that we will need to grow 50-100% more food within a few decades to meet the needs of a world of more than nine billion people and the emerging (mainly urban) middle class. A widening gap between supply and demand may lead to political unrest if left unaddressed. Obtaining bigger yields with limited resources and without destroying the natural environment, by overexploiting soil or polluting air and water, is a challenge everywhere in the world. Agriculture of the future must be efficient and sustainable; the problem of intensive yet environmentally safe production must be solved. The sector’s current growth trends must be disrupted. The giant must wake up, and modern infocommunications technology may assist in this transformation. Fortunately, the field of agribusiness actually is changing. Exciting examples from pioneers illustrate how

digital technology may improve the performance of plant cultivation and livestock breeding. The process of digitization started decades ago, as precision agriculture, an informationintensive management system, emerged in the 1980s, employing such technologies as computers and GPS. Information-based site-specific solutions were developed for optimizing fertilizer distribution and irrigation to varying soil and weather conditions – to ensure application of the right treatment in the right place at the right time. Together with other innovations, precision agriculture put the industry on a new development trajectory, pushing ahead efficiency and productivity thresholds. The primary source of global agricultural growth has shifted from input-based to mainly productivity-based. Although the first wave of the precision agriculture revolution is still unfinished, and its market penetration is low in many parts of the world, rapid technological innovation opens up new opportunities. The second ICT wave has arrived. A new entrepreneurial space is being opened by factors such as exponentially increasing computing capacity and speed, general connectivity, the Internet of Things, mobile tools, sensor technology, automation and robotics, drones, imaging satellites, machine learning, artificial intelligence, parallel processing of Big Data, cloud computing, miniaturization, progress in machine-human interface, optical pattern recognition and software as a service. Big Data generated by new equipment

and more sophisticated use of information will play a vital role in agriculture. More granular, real-time data, equipment compatibility and improving analytical capabilities provide better insights into the complex interrelationship of factors influencing yields and productivity. Significant progress is needed to design and implement new business models that are capable of capturing the value coming from higher data volume and variability. Better cooperation and strategic partnerships are needed along the agricultural value chain, because data is generated in different parts of it. A great deal must be done in emerging markets, which still lack sufficient and reliable data on fields, inputs, crops, environmental factors, production processes and market demand. Rapid expansion of mobile technologies in rural populations of those regions prove that technological leapfrogging is possible, and access to information may change the lives of many. The number of developers and users is growing, and experience and knowledge is accumulating. One thing is for sure: Besides ICT tools, leadership capabilities are also essential to initiate and support this transformation. Technology develops rapidly, fascinating new tools have appeared, but adaptation depends on farmers and managers. This column is part of a continuing series of opinion columns from experts at the CEU Business School in Budapest. The opinions stated here do not necessarily reflect those of the Budapest Business Journal.

Balog: State will sell MKB Bank for HUF 37 bln

Questions have arisen about one of the firms in the consortium of buyers. CHRISTIAN KESZTHELYI

The sale of MKB Bank from the state to a consortium of three companies is scheduled to be wound up by June 30, the bank’s Chairman-CEO Ádám Balog told a Budapest press conference on April 6. The troubled bank, which was purchased by the state last year, is to be sold for HUF 37 billion, which Balog acknowledged is below what the market price might be, but the CEO noted that the institution is currently undergoing financial reorganization. The buyers are Blue Robin Investments, purchasing 45%; METIS Private Capital Fund, purchasing 45%; and Pannónia Pension Fund, purchasing 10%. News reports at the end of March, when the National Bank of Hungary (MNB) announced the sale, suggested

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Less than market price: A branch of the bank in Budapest’s Árkád shopping center. that Singapore-based Blue Robin Investments has a non-transparent background. But answering questions at the press conference Balog said that the central bank will thoroughly investigate the background of the companies

during the financial closing, before the transaction is wound up. Balog declined to comment on allegations by Hungarian weekly Magyar Narancs that Blue Robin was not even a registered company when the consortium

placed its bid for the bank, saying that he is only the CEO stewarding the bank and that such questions should be aimed at the owners of companies involved in the sale. Following the press conference, the MNB issued a press announcement saying that “false information” published in the Hungarian press “could endanger the successful close of the sale of MKB Bank”. The central bank said that “the false information is suitable for inflicting damage by reducing the market value of the institution which is undergoing a bailout”, Hungarian news agency MTI reported. MNB stressed that the process of selling MKB Bank was in full compliance with the bailout act, as well as with European Union rules. “Claims to the contrary in the press have no standing in professional terms,” it added. Hungary’s central bank took control of MKB at the end of 2014, acting as a bailout manager, after the state purchased the bank from Germany’s BayernLB earlier that year. Distressed assets of the bank have been spun off and the European Commission last year approved of the restructuring.

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3Special Report BBJ

Telecoms

Local firms putting ‘things’ online

 14

Free Wi-Fi hotspots multiplying

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Upward trend

The past year has been a good one for Hungarian telecoms. This section looks at the industry as a whole, while also highlighting specific successes in the sector.

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2016. 04. 06. 21:27

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Budapest Business Journal | April 8 – April 21, 2016

Hungary’s telecoms enjoying h

A bank of smartphones for sale at a Magyar Telekom shop.

The growth in mobile subscriptions is justifying efforts to build up the country’s infrastructure, especially the 4G mobile internet networks that serve smartphones. ANIKO FENYVESI

Hungarians are becoming more connected than ever, and that is good news for the telecoms market, which grew at a healthy pace last year and is continuing the upward trend this year. The number of mobile phone subscriptions increased by 69,000 to reach 11.9 million by the end of 2015, according to a report published by Hungary’s Central Statistical Office at the end of March. Meanwhile, major developments were carried out by Magyar Telekom, whose outside 4G coverage reached 97.3% of the country by year’s end, in line with the firm’s projections. The state is also encouraging expansion of broadband connections with its Digital

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Hungary program, which promises to bring even the most remote areas of Hungary online. The healthy growth in the market, especially the competitive 4G mobile internet market, signals to the three big mobile network operators (MNOs) that it is worth investing in infrastructure in this country, and they are doing just that. Although 5G developments are still at a theoretical stage, speed improvement in the 4G arena is a very tangible development. “The evolution of 4G technology (LTE Advanced with theoretical 300 Mbit/sec download speed) is in the test phase in Hungary and will be introduced soon,” says Gábor Kőrösi, a member of the board of the ICT Association of Hungary (IVSZ) and director of the Regulatory and Governmental Affairs Department at Telenor Magyarország. The local market is dominated by three private MNOs: Magyar Telekom, Telenor, and Vodafone. While these firms also offer fixed-line, internet, cable TV and touchless payment solutions, their main focus remains on improving their position in the mobile market. The industry’s largest player, Magyar Telekom, with roughly a 46% market share, said it had 4,949,874 residential and 554,090 business mobile customers by the end of last year. It has also been

“Beside the dynamic expansion of the 4G network, resulting from the developments of Telekom, high-speed broadband internet became available to about 464,000 households by the end of 2015.” one of the most dynamic MNOs in Competition in the wings terms of its technological developments to better accommodate its rapidly Cable TV service provider DIGI’s role in growing customer base. The company the industry remains unclear, as some is continuously investing in quality had expected it to move into mobile upgrades of its network, which Magyar competition a couple of years ago. Telekom’s communications department DIGI has been sitting on a frequency says has an outstanding average speed it purchased in 2014, apparently not by global comparison, according to developing that resource. A Budapest data compiled by OpenSignal, an app Business Journal report in the fall of 2015, that monitors the industry through however, noted that Magyar Telecom had said DIGI’s frequency would not be crowdsourced data. “As of April 2015, Telekom has sufficient to provide nationwide mobile accelerated the new generation fixed service of a high enough quality, and network development in Hungary. as such it was not perceived as a threat Beside the dynamic expansion of to the market. Smaller players such as the 4G network, resulting from the Telenor, which has a 31% market share, developments of Telekom, high-speed or Vodafone, with 22%, are more likely to broadband internet became available feel the pinch if DIGI does, in fact, enter to about 464,000 households by the the market. end of 2015,” a statement from Magyar Always media-shy, DIGI declined Telecom says. “As a result of recently to comment for this article. Industry launched developments, Telekom’s insiders say the firm could engage in an high-speed fixed-line network coverage aggressive price war, which was how it increased from 1.8 million to 2.3 million gained a dominant position in its home market of Romania. DIGI could also be households in 2015.”

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g healthy growth

5G: Next generation network due here by 2020 Well beyond the capabilities of 4G, the new networks promise hyper-fast data transfer, more efficient bandwidths and a complex web of machine-to-machine communication and automation that is expected to meet the demands of both businesses and consumers by 2020. ANIKO FENYVESI

One of Antenna Hungáriaʼs towers looms over Pécs. waiting for the reduction of landline taxes prior to entering the market. Such a reduction would significantly impact costs incurred by DIGI through its cable TV business, thereby allowing it to push down consumer prices in other areas. Alternatively, DIGI could rent out its frequency to a Mobile Virtual Network Operator (MVNO). MVNOs, such as cable-operator UPC, which launched its mobile services on the market last year, are another potential source of competition. MVNOs are companies that have entered into agreements with major mobile network operators to provide wireless communications services without owning their own frequency or the necessary infrastructure. Vodafone provides the frequency for UPC, which only recently became a full-fledged MVNO but holds a dominant position in the cable television market. UPC’s overall position improved markedly in the past year, and according to Kőrösi this has resulted in the strengthening of its position in the MVNO market. This will also be impacted to a large extent by the country’s only other MVNO, Tesco Mobile, exiting the market this month after doing quite well for the past four years. Vodafone, which has a 50% stake in the company, is set to take over all Tesco Mobile clients by April 16.

State infrastructure initiatives State-owned MVM Net Zrt. entered the mobile network market earlier this year and its network reached 90% nationwide coverage by the end of March, according to a statement from the Ministry for National Development. If that network was used for commercial purposes, MVM Net could be a big commercial player, but the government says this is not the plan. MVM Net’s network is reportedly designed primarily to serve the

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telecommunication needs of the government, and part of the network has already reached operational status for some government applications. Once it is fully operational, public administration organizations, emergency services, educational institutions, state-owned companies as well as relevant segments of the commercial sector will use it, the ministry added. This is not entirely a new development, since the state has pursued telecommunications activities for government purposes through the National Telco Network (NTN) since 2012. These services have been extended to mobile with the cooperation of Chinese telecom equipment manufacturer Huawei, which was also involved in other Hungarian mobile market developments through Vodafone and Magyar Telekom. For the state initiative, Huawei is responsible for supplying the base stations while Antenna Hungária Zrt., a company that owns radio towers and was acquired by the state last year, was responsible for carrying out the work. Another large development by the state that has kept local mobile providers busy is the “Digital Hungary Agenda”, which promises high-speed broadband connections in every household in Hungary by 2018. It is estimated that 883,000 homes in Hungary are still without broadband. Under a cooperation agreement with the ministry, 53 providers will develop their broadband networks using their own resources, with most of the voluntary commitments coming from Magyar Telekom, the ministry added. HUF 68 billion has been earmarked for the project, supplemented by an additional HUF 45.6 bln in preferential project loans, with successful applicants to begin installation of the superfast networks in the second half of 2018, the ministry said.

Budapest Business Journal | April 8 – April 21, 2016

Ready or not, the fifth generation of connectivity is on its way to Hungary. So-called 5G networks, which offer the kind of dependable, high-speed connection that permits a true “internet of things” (IoT), are expected to arrive in this country by 2020. Mobile technology in Hungary has come a long way since 1G analog networks were first launched in 1990. Actually, Hungary was the first country in the region to introduce the use of mobile telephony. Twenty-five years on, some providers have nearly 100% 4G coverage, offering ultra-broadband internet access to even the most remote areas of the country. Enter the 5G network. Designed for industrial internet applications, in which machines are intended to communicate with one another, 5G enables wireless connectivity for new uses, including wearables, smart homes, traffic safety, critical infrastructure and industry applications, as well as very-high-speed media delivery. Within machine-to-machine communications there are two sub-categories: Massive machine-type communication that connects large numbers of low-cost and low-energy devices in the context of the IoT; and mission-critical machinetype communication that enables realtime control and automation of dynamic processes in various fields, from industrial process automation and manufacturing, to energy distribution and intelligent transport systems. In order for such infrastructures to work, experts say, new air interfaces operating at frequencies above the current cellular network need to be explored to accommodate the increased burden on existing bandwidths and to avoid an overlap with other wireless transmissions.

Incubator established As part of the 5G for Hungary program (a regional extension of the “5G for Europe” program) Ericsson Hungary set up an

The Ericsson Garage opens in Budapest. incubator “garage” late last year to provide a space for enterprises, operators, startups, universities and end users to develop innovative 5G solutions in all applicable areas from the IoT, to energy and utilities, safety and security, public infrastructure and retail, according to a press release issued by Ericsson late last year. The aim of the program is to bring together key players to jointly devise innovative 5G projects and create prototypes and functional solutions, which can then be shown to operators and enterprises that will eventually employ these developments to help digitalize their own systems, the press release noted. Ericsson is also one of the main drivers behind the “5G Exchange” (5GEx) project, the aim of which is to establish mechanisms for automated and fast provisioning of infrastructure services between 5G operators across countries, to reduce market fragmentation, enable collaboration and create a unified platform for networks, clouds and other services, according to reports. The project is to be carried out over the next two-and-a-half years. Magyar Telekom, a subsidiary of German telecom giant Deutsche Telekom, is ahead of the pack with its 5G developments and the firm hopes to be the first in Hungary to launch the new technologies, according to a statement sent to the Budapest Business Journal by Magyar Telekom’s communications department. The company’s key focus remains developing the coverage and upgrading the existing 4G network in Hungary, the statement said, but added, “Deutsche Telekom Group is completely on track with its 5G and is continuing to actively push standardization and development forward so that it can begin in 2020 – or even earlier.” Beyond offering more services, Deutsche Telekom Group says its goal with the 5G network is to address customer requirements on a more individual basis. “While one person may primarily require high data transfer rates, another might favor minimal latency or low-energy mass applications,” Magyar Telekom said, adding that its German parent company recently raised data throughput on a prototype smartphone to more than 1.5 gigabits per second. It is these kinds of speeds that are required to carry TV and virtual reality applications and the expanded bandwidth will allow thousands of connections to be made via the narrowband IoT, Magyar Telekom’s communications department added.

2016. 04. 06. 21:27

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Budapest Business Journal | April 8 – April 21, 2016

Local firms happy to put ‘things’ online As the Internet of Things expands, local players are jumping in with a vast array of solutions, but those in the industry say that recognition from local governments and foreign investors is needed to help them compete. LEVENTE HÖRÖMPÖLI-TÓTH

If you think there are a lot of people online, imagine what happens when more of our refrigerators, cars, bicycle bells and myriad other devices start to log on. According to a Cisco Systems forecast, by 2020 more than five billion people and 50 billion devices will be hooked up to the worldwide web, and Hungarian firms are trying to figure out how to cash in on this trend. “Companies are experimenting with what could be the next big thing, but one thing they know for sure; they want a piece of the growing pie,” engineering manager Péter Herbel tells the Budapest Business Journal. The Internet of Things (IoT), which connects consumer objects and industrial equipment to the network, offers an everlower point of entry for players. Hardware is getting smaller in size and it is cheaply Images of the Túrám app in action. available, explains Herbel, who works with a startup called Chimein. As the number of IoT companies here grows, so does the expertise. The Hungarian landscape is shaped a great deal by such things as the IoT Workshop, a regular event organized by Herbel and his partners, Péter Takács and György Balássy. A devoted group of engineers attend the meetings in Budapest in order to exchange information on trends. “It is agreed that hardware is only a start, services are needed to give the ultimate push upwards. Data by itself won’t do, value must be generated from Péter Kovács of Smart Raab Digital Managing it,” Herbel points out. Home Magyarország. Director János Varanka.

Navigating indoors with IoT Service and hardware combine in Hungarian firm Raab Digital’s new product called ‘Túrám’, which means ‘My Tour’, but is marketed globally under the name ‘Trackatour’. The app can dramatically increase the ability of a mobile phone tour to locate its users. “Its real novelty is that GPS-based and indoor navigation is integrated within one single mobile app, not to mention a multimedia tour guide and an interactive map,” says Raab Digital managing director János Varanka. “Hikers have had apps to guide them in the woods before, sightseeing tourists have been spoiled by relevant solutions as well, but now users get an additional tool to navigate inside buildings where accuracy is lifted to a whole new level.” The device means that visitors to

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museums and exhibitions can see at all times where exactly they are, how to get to the next stop on the tour, what they will see at that moment and what they need to know about it. These sophisticated indoor features are made possible by Bluetooth-based iBeacon devices that are set up all around a museum or exhibition site. “These gadgets serve the same function for your mobile phone that satellites do for GPS equipment,” Varanka says. In Hungary, the National Gallery and the National Museum have already indicated their intention to embrace the product. The benefit for these and other potential customers is that they can save time and money by having a Túram tour custom-produced for them, Varanka explains. “On top of that, providers get a

of the field. Its public road management solutions, which allow for automated management of highways, are already popular with public administrators. “A great number of devices of critical importance need to be remotely controlled and monitored. Road meteorology stations, surveillance cameras, traffic counting equipment and traffic light control panels rely on our industrial mobile routers,” says Péter Bátorfi, managing director of Intelliport Solutions. He adds that firms like his that facilitate smart governance will thrive once local authorities realize the benefits in costs and efficiency. “If the government committed itself in this direction, this could give a huge impetus to the entire industry,” Bátorfi says. His company is equally active in smart metering in the public utilities sector. “Smart metering is still in its pilot phase in Hungary, but there’s large demand for industrial and institutional energy monitoring already,” Bátorfi insists. He points out, however, that although services attached to IoT solutions are bound to pay back big soon, there aren’t that many successful role models around yet. “We are preparing to enter this services market with so-called tracker solutions. We’re talking about packages: children, bikes, dogs or even grandmothers who can be tracked,” Bátorfi says.

Making smart homes more secure

In the case of smart home systems, one of the better-known fields of IoT use, service packages require a special approach, since household “things”, such as light switches, are part of the electric system of buildings and are owned by the customer. Hungarian firms are already providing services in this area, including turning off lights when they are not needed, and opening and closing blinds to use sunlight or shade for heating or cooling. But customers are looking for more, according to Péter Kovács, chief technology officer of Smart Home Magyarország. “Apart from the now regular heating, blinds and lighting control, as well as burglar alarm systems, such stepped-up functions as voice recognition, license IoT expert plate recognition and finger print reading Péter Herbel. are also being sought after,” Kovács says. “For an annual fee, we are happy to marketing tool pack and a set of CRM maintain the systems installed by us or, features, while they can impress visitors on request, add extra functions to them.” One type of maintenance needed in with enhanced experience,” he adds. Despite the interest in his product, smart homes involves improving the way Varanka says that real growth will the system recognizes fingerprints, voice happen when firms like his are able signatures or other security cues, so that to compete on an equal footing with only the owner of a home can control it. companies that are already known “Transferring data from gadgets in a internationally. “It would be of secure way poses another globally present immense help if mentoring and trading challenge. You don’t want your neighbor companies showed up around here that to control your thermostat, after all,” notes could support the launch of market- Chimein’s Herbel. He says the solutions ready products abroad,” he says. “Big being developed for this involve artificial development projects cannot be financed intelligence (AI), which helps your “things” know when to follow commands. from the small domestic market.” “AI functions will set the blinds in motion automatically when the sun is too Roads are ‘things’ too hot and heating will be turned on if your Even before the term IoT existed, the GPS coordinates hint you are on your way Debrecen-based firm Intelliport Solutions home at wintertime,” Herbel says. “This was making forays into industrial aspects is where we are headed.”

2016. 04. 06. 21:27

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Budapest Business Journal | April 8 – April 21, 2016

Telenor tries to transcend typical telcos The second largest telecom in Hungary, with roughly one-third of the market, Telenor Hungary is a leader in many areas, such as mobile wallet services. When it comes to standing out in Hungary’s competitive scene, Telenor Hungary CEO Christopher Laska says the people who work for the firm are the most important factor. He spoke with the Budapest Business Journal about his company’s current activities and future plans. BBJ STAFF

heating controls – to name only the privately used devices. Besides these smart home appliances, the industrial use of connected devices will also be widespread. Our lives will become safer and more convenient, and our productivity will increase thanks to the connected devices that the new technology will enable. With networks such as Hipernet, Hungary is wellpositioned to be a leader with respect to future generation networks as well.

Telenor Hungary CEO Christopher Laska. forefront of the mobile broadband speed contest. However, we would not like to stop here and are now gradually introducing an even faster version of Hipernet (in tech language, LTE Advanced) in certain areas of Budapest and some major cities to improve deep indoor coverage and become a real alternative to fixed-line connections.

Would you say your firm’s main activities in Hungary are in the area of phone services and internet subscriptions? A: If you look at our recent activities and communications, you will realize that Telenor Hungary has gone beyond the traditional telco roles. Yes, we do provide mobile internet and we do transmit voice What other types of calls, but a large part of our operations activities are you involved in here in Hungary? today are connected to digital services. We were the first to introduce media content A: We are continuously developing services in the music segment (Deezer) digital services for our customers and in TV streaming (MyTV) and also with our partners. I would highlight play a pioneering role in mobile finance MyTV, which is a locally developed through our Wallet application, and we service combining the advantages of were the first mobile company globally to TV streaming and video-on-demand: launch MasterPass. Like our customers, as a subscriber of this service you can we are very much on a digital path and watch live or catch up to 51 TV channels offer and develop services matching the and have access to thousands of films expectations of the digital natives. anytime, anywhere on any of your smart devices and TV. What level of penetration does the Telenor 4G Are there any particular internet network have in partnerships or case Hungary? Are you seeking to expand studies you would like that network? How is that going? to highlight? A: Our customers do not distinguish A: One of our recent B2B customer wins between 3G and 4G, and thus we decided was based on the fact that we could to refrain from talking about technology: offer cloud services and thus a complex our claim is that Hipernet is superfast service package to a large corporate and provides for seamless customer client. We are very proud that, with the experience – whatever the technology right partners, such as Microsoft, we behind it. Hipernet covers today 97% can now offer services distinguishing of the Hungarian population allowing us from the competition and allowing for download speeds of up to 150Mbps. for solutions going far beyond the This is an internationally exceptional traditional mobile telephony role. result: according to a recent independent analysis conducted by OpenSignal, Telenor was a pioneer in Hipernet is among the fastest networks the MasterCard-enabled in the world putting Hungary at the mobile wallet. What are

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How would you characterize the telecoms market in Hungary? Developing? Competitive? A: Hungary is a unique market in the sense that you have three global players competing with each other, thus Hungarian customers can benefit from the know-how of international companies, i.e. innovative services backed by strong brands. In recent years, further global players entered this market, offering OTT services for communications or media content, which inspire us to be even more innovative and simpler to be able to compete with these services. There are two further features of the Hungarian mobile market: first, the special taxes levied on calls and text messages that you do not find anywhere else in the EU; and second, the large number of corporate or organized fleets who have substantial bargaining power and make pricing more challenging.

the possibilities for that system here? How big is your mobile wallet business in Hungary? What makes Telenor stand A: Mobile payment services are very out in the telecoms market popular in Hungary when it comes in Hungary? What are to paying parking tickets or buying your firm’s unique features and motorway stickers. We encourage our special strengths? customers to go beyond the traditional A: Our people and their mindset. First SMS-based payment and try our mobile and foremost we hire for attitude, and payment application, Telenor Wallet. We put integrity first. We take an active have now over 52,000 customers who stance against corruption, and have use this app for various payments and several layers of training, as well as transactions. Recently, we were the first a compliance function that reports mobile company in the world to launch directly to me. We are very proud to MasterPass, a safe online payment have hundreds of innovative, customer solution. This service is very easy to centric colleagues with a can-do attitude. use and provides excellent security: They developed our unique, completely Registered customers only have to type customizable tariff plan, MyTariff, in their phone number when paying and they developed customer centric online and then they can approve the solutions such as the “device freedom” transaction on their mobile. No credit scheme under which customers can card credentials will ever appear on upgrade their phones even within the computer or will get to the retailer, the loyalty period. When it comes to and the phones themselves are only the development of tailor-made B2B storing parts of the credit card details – solutions, this type of innovation is the missing parts are stored on remote even more important. Our steady growth and customer feedback are the servers and encrypted. proofs that we are on the right track. Where is Telenor regarding development of What are the future plans a 5G network, in Europe in for Telenor’s activities general and in Hungary in particular? in Hungary? A: As I said, most people do not really A: More innovative digital services care about the tech terms, so I would are in the pipeline, whether we will put an emphasis not on the technology, launch them on our own or with the but on the quality of life that it enables. involvement of some talented local Further network development will allow startup companies. As you can see, the for more connected devices and higher Telenor Group has recently made some download speeds: Not only people significant acquisitions in the field of and companies will be connected, but digital services, which inspires us to all sorts of devices, such as home work more closely with global and local security cameras, smoke, moisture or digital partners to develop the services carbon monoxide sensors, intelligent that our customers will need tomorrow.

2016. 04. 06. 21:27

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Budapest Business Journal | April 8 – April 21, 2016

BBJ EXPERT PARTNER

MASTERCARD MEANS BUSINESS IN DIGITAL PAYMENT RACE So far more than 200 domestic e-stores have signed up, but worldwide you can enjoy the benefit of this function in 250,000 online shops. This is of huge advantage, because you need to enter your bank card details only once, and from then on you can pay by clicking on the MasterPass button in a comfortable way on all those websites. We are also trying to focus on websites where repeat customers are frequent, say, in the case of food delivery services. This is where such convenience is appreciated the most.

There’s a lot happening on the e-payment market, where MasterCard is busy taking the lead with a host of innovative solutions, such as pre-paid cards, mobile wallets or a new instalment payment solution – to name a few. The next turnto-cashless segment may be vending machines, Endre Eölyüs, Country Manager for Hungary and Slovenia says in this interview with the Budapest Business Journal.

Are users actually confident about the security issue in the case of MasterPass? You always need to use your own code to verify the transaction. The point is that you don’t leave your bank card details with an e-commerce retailer where you wouldn’t know what they might want to use them for. Those details are instead left with MasterCard, by which the required data is sent to the retailer on a case-by-case basis without giving the option for storage.

LEVENTE HÖRÖMPÖLI-TÓTH

The MasterCard instalment payment solution is soon to have its debut on the domestic market, and it should sound attractive to customers wishing to settle their higher bills in more than one go. Is this going to be a win-win situation for every participant of the transaction? Consumers in Hungary tend to be not entirely comfortable with using credit cards as the terms of use are often not clear enough to them. Our solution, creates flexibility, control and transparency, whereby users can see exactly how much money there will be due and how many equal instalments are to be expected. Banks may charge an extra fee, but in return they can offer a product with a clearly predictable payment scheme that can be communicated with simple messages. Retailers are bound to win as well, since this structure opens up new channels for a product loan of a sort that will boost their revenues. According to MasterCard’s 2012 data, pre-paid cards represent the fastest spreading payment method worldwide. Global transactions made by “open loop” type cards will hit $822 billion by 2017, a growth of 22%. Surveys conducted in Hungary show that 61% of respondents look forward to the product. Why do you expect pre-paid cards to gain popularity in Hungary in the near future? As a result of new legislation, pre-paid cards can no longer be requested only at banks, and customer identification rules have also become less stringent. You actually need to file identification papers in person only if you use reloadable prepaid cards with a value of more than HUF 650,000. This simplifies procedure and revs up use. What situations are ideal for using prepaid cards? Parents can give pocket money to their children in this fashion and thus keep

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CV Endre Eölyüs (40) has been Country Manager for Hungary and Slovenia at MasterCard since 2013. Prior to his appointment, he worked as a director of Zuno Bank Hungary and also fulfilled various roles in management positions at Budapest Bank (GE). He graduated from CEU and Szent István University (Gödöllő). control of their spending. Others who still lack confidence in online payment security prefer pre-paid cards to their debit or credit cards. This way they minimize risk to the amount of money the actual card carries. In Western Europe insurance companies tend to use them for settling damage payments, and allowances may be placed on them by municipalities. What about festivals? Are they an optimal venue for these cards as well? Absolutely. They give a lot more freedom than festival cards that can be used only at a particular event. Pre-paid cards allow you to spend any remaining amount afterwards at points of sale accepting MasterCard.

Mobile wallets are another hot topic these days. You have joined forces with Vodafone among others in this respect. There is a lot going on as far as mobile wallets are concerned. These are all about finding ways to insert our plastic bank card into our phones. NFC-based contactless payment is one path here. But think of online shopping too, where at check-out you are asked to approve payment on your mobile, sparing the hassle to enter your bank card details every single time you buy something on the internet. In such cases entering a personal code on the phone is sufficient. Apparently, however, there’s fierce competition out there to gain momentum on the mobile wallet front. A lot of projects are out there that will result in banks issuing mobile wallets where user-friendly payment itself is only one, but not such a crucial element of a value package. The success of mobile wallets will be subject to how banks can identify services and determine the right communication messages that make customers like, and start using them. Your involvement in developing mobile wallets fits well into global trends, as payment is becoming less and less physical and it’s gradually going digital. Another effort of MasterCard in this regard is MasterPass. This smart function has been available in Hungary since July 2015 and it makes shopping on the web a lot smoother. In what way does it provide added value?

MasterCard is a dedicated ambassador to promoting a cashless life, which also helps cut the weight of the black economy. What steps can you imagine would push into this direction? One current project on our agenda is targeting vending machines. The technology to go digital exists, but it’s always key to convince users that they do need that technology because it makes their life simpler. Now with vending machines, customers and operators alike encounter a lot of inconvenience because of cash. They would all be relieved without it. There’s a lot of potential in the 30,000 strong vending machine market where our ambition is to make most of them fully cashless. But will operators be partners in this? They still might want to stick to cash which gives them a way to do murky business if they please. It remains to be seen, but it’s also in their interest to play along, so we are confident. Again, it’s crucial to make the change in people’s heads so that it becomes automatic to go with cashless methods even if only small amounts of money are to be paid at a time. Apart from the vending machine segment, where do you see particular room for bank card penetration? In Hungary only about 20% of all retail transactions are made electronically, according to the research of Euromoney. Our purpose is to go after the remaining 80% covered by cash. It’s a viable strategy to reach out to people through simple life situations where they can experience that electronic payment is safe, fast and convenient.

2016. 04. 06. 21:27

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Budapest Business Journal | April 8 – April 21, 2016

Entering the new economy through the clouds Invitel’s allencompassing, integrated ICT services allow businesses to plug into the possibilities afforded by the ‘fourth industrial revolution’, according to the firm’s Deputy CEO Áron Javorniczky.

“Businesses need to completely reconsider their relationship to the IT sector, which has grown more challenging, but also offers new opportunities.”

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There is a significant trend, ICT convergence, which means fusion of telecommunication and the IT industry, driven by technical progress and innovation. But the current technological revolution is also an economic revolution, according to Áron Javorniczky, Invitel’s Deputy CEO of Corporate and Wholesale services. He explains that constant advances in information and communication technology (ICT) have not only changed the way companies do business, they have completely transformed the business environment itself – creating unique opportunities for those who can see the possibilities. In order to help its business clients unlock the full potential of the evolution in ICT, Invitel, as proven by its numbers, is taking a seemingly successful approach to its B2B services, according to Javorniczky. “The directions of our corporate and wholesale branches have been altered to meet the evolving new realities of the market,” he says. In other words, Invitel’s answer to the convergence is the transformation of the company to an integrated ICT provider. Firms that connect to Invitel’s cloud services can immediately access massive computing power and sophisticated solutions, according to Javorniczky, who adds that more and more companies find they cannot get by without this level of support. “Businesses need to completely reconsider their relationship to the IT sector, which has grown more challenging, but also offers new opportunities,” Javorniczky says. “Those who do not keep up the pace with the developments going on will lag behind. This is why outsourcing complex ICT needs to an external partner is becoming more and more valuable.” As he explains, ICT, which merges traditional communications with new technologies, has been going through spectacular development. “This development, which is sometimes referred to as the fourth industrial revolution or the digital economy, means that it is not enough for a company to offer different products and services,” according to Javorniczky, who adds that a provider must also assist and consult its business customers in taking advantage of new business models.

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Áron Javorniczky, Invitel’s Deputy CEO of Corporate and Wholesale services: a new approach is essential.

“The direction of our corporate and wholesale branches have been altered to meet the evolving new realities of the market.” Examples of the new kind of businesses made possible through ICT include online stores, or sharing economy businesses, like Uber and Airbnb, Javorniczky notes. He also mentioned a key Invitel customer, who uses “online data flow and real-time data processing to unify power plants around Hungary to create a ‘virtual plant’, capable of acting like a single production unit.”

A new kind of service provider In this rapidly developing setting, providing full-service cloud computing means offering creative and dependable answers to new challenges. “Instead of merely seeking to obtain servers, software and IT staff, companies are looking for complex and customized solutions. They need a service provider who is responsible for all the elements

of thorough planning and technical realization,” says Javorniczky. “With this kind of professional partner, companies are able to focus on their own core business.” Invitel offers the knowledge of an expert staff and the computing power of an IT park at a cost that is much less than what a company would pay if they tried to develop their own in-house IT, according to Javorniczky. “Whether it is a private, public or hybrid model having dedicated elements in it, cloud-based solutions are affordable and suitable for any size of company, and offer opportunities to easily expand and improve ICT operations,” Javorniczky notes. He adds that this is why appropriate cloud services are the future direction for corporate ICT operations.

Choosing the best Once firms understand that cloud computing solutions are right for them, they also need to choose the best provider of these services. According to Javorniczky, the ideal provider is one who understands the revolution in ICT and also understands the needs of their partners, so that they can work alongside a firm as the company’s needs change and grow.

“Service providers need to shape their whole organization and culture in a way that meets the requirements of a partner model instead of the traditional service provider-consumer model, and they need to offer new competencies,” Javorniczky says. To ensure that they can work as a true partner, Invitel employs nearly 150 engineers who are dedicated exclusively to providing IT services, Javorniczky says. Invitel considers its competence in this sphere to be its competitive edge, and the company is constantly working to set the industry standard in knowledge and support – based also on its state of the art data center - he says. Another requirement for an ICT service provider is the ability to put together a broad, complex portfolio – based on it’s datacenter competence – and to address needs such as IT security, the deputy CEO notes. “It is important to develop internal operations, but also to acquire professional certificates and qualifications that show the provider’s abilities are recognized by, and compatible with, the industry as a whole,” Javorniczky says. “Invitel was able to acquire the Cisco Cloud and Managed Services Advanced Partner certificate, and its cloud service was awarded Cisco Powered IaaS qualification.” The firm has also earned other important recognition from the industry. “In 2015, Invitel became the first company in Hungary to receive Cloud OS Network Silver Partner, and then Gold Hosting Partner status, from Microsoft,” according to Javorniczky. “This is a unique achievement not only in Hungary but in Europe as a whole. The company was also awarded an ISO 20.000:1 certificate, which is an acknowledgement of Invitel’s IT services management systems, HelpDesk and server hosting, as well as infrastructure operations. Invitel’s abilities are also ensured through its professional partnerships with firms like Novell, VMWware, IBM or others, he adds. As an agile ICT partner, the deputy CEO says, Invitel can help negotiate the changing technological environment, but they also understand the value of the basics: A high-speed network with wide coverage, state of the art datacenter services and a wide range of other IT solutions. “It is not a coincidence that in the field of ICT, the most ambitious companies keep investing big resources in these infrastructures,” says Javorniczky. “Invitel is already a leader in these areas, and we are constantly working to stay ahead of the competition, and the latest developments.”

2016. 04. 06. 21:27

www.bbj.hu

Budapest Business Journal | April 8 – April 21, 2016

Smaller firms help keep all of Hungary wired The hundreds of local SMEs that provide landline internet connections to otherwise isolated regions of the country have a strong competitive edge against their multinational counterparts. LEVENTE HÖRÖMPÖLI-TÓTH

It is nearly always incumbent corporate giants that hit the headlines when the Hungarian broadband market is discussed. But they are not alone. Some 17.8% of the 2.5 million broadband subscribers are served through landline services from hundreds of local small- and medium-sized enterprises, according to the latest statistics of the National Media and Infocommunications Authority (NMHH). These SMEs are important providers in various patches of Hungary that do not receive landline services from the largest telecoms, and it would be a mistake to ignore their current importance, or their potential future impact. As Gergely Zelena, managing director of AccessPoint Kft. and an expert on the subject, points out, smaller Hungarianowned broadband providers enter the competition with an edge in many respects compared to their multinational rivals. “Thanks to their size and the number of their staff, they are able to respond to customers’ inquiries in a faster and more flexible manner than larger entities. As regional providers, they also have deeper knowledge of local needs and they get involved as consultants in the preliminary phases of certain network-ICT projects,” he says. “And a big chunk of their revenues is used for network modernization, thus stepping up infrastructure quality.”

One of the biggest alternative operators, or provide free Wi-Fi in public areas,” Externet Nyrt., leads by example in this Zelena explains. However, clients don’t only come from regard. The firm is listed on the Budapest Stock Exchange and has gradually the retail segment. Municipalities, public widened its portfolio to the extent that it institutions, schools and public utility is now able to offer landline broadband companies often go local in their choice via DSL, cable and fiber optic cable. of internet providers. More importantly, SME providers serve remote areas on the digital periphery, mostly because larger Reaching out to the digital no man’s land companies simply are not interested in Alternative providers tend to be entering these niche markets at all. associated with smoother and more “Today, hundreds of thousands of personalized CRM services as well. households that get high-quality data and “Their engagement in community voice services would live their everyday activities is exemplary as they often lives in total isolation without these 400set up free internet access at events 500 Hungarian SMEs,” Zelena says. Moral

and financial support would be more than welcome for these service providers, the expert says, not least because their continued engagement can help the government meet its goal of having every household in the country connected to high-speed internet by 2018. If things go well, incentives are expected in the form of funds, for the government seems to have realized the efforts these SMEs make, and has committed itself to ensure that they can successfully apply for grants. The public money would be well spent, no doubt, since this sector is in desperate need of continuous development.

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Hungarian the November, In plans to expand tills to government announced use of electronic the mandatory taxis, laundries ANIKO FENYVESI include auto mechanics,offices. had and currency exchange end of 2014, NAV with their taxes on earnings Already by the of cases As companies file most should find that encountered thousands companies in the made last year, fined several huge differences shortfalls and following a series there are not the new regulations, for failing to complyNAV also noted a by amount owed under experts interviewed of targeted audits. in VAT revenue of according to tax tabs on trucks. Journal. of the subsequent increase authorities keep the Budapest Business billion by the end regulations help enforcement measures come nearly HUF 200 according more EKAER Still, stricter in the years to tills’ operation, some firms pay most to have higher burdenslose their tax losses first year of the may mean that that the measure previous tax before. And they will to reports. It appears of tax losses in Minister Mihály this because than they did explains Antretter. probably already great deal to benefit from what Economy from previous years,” that are able reduce amount periods would be able “shadow economy” companies have was changed calls Hungary’s increase in the Conversely, companies experienced an involved in reporting measure, but the legislation Antretter of of the new gross Varga success. Erzsébet to take advantage lower income tax is a resounding of administration the right amount on last year,” explains will have Hungary. difficult tax consultants Accacesystems, Hungary tax credits year, Antretter adds. The income and paying with the more tax electronic monitoring burdens this tax credit idea, time. Complying Like many other to carry forward downside is that the grosswith before- Increased burden is a good pay administrative allows businesses to businesses declarations of elsewhere as those who missed VAT several losses by postponing expectation that only applies exceeding that of previous While experts say that the experts say, punctually for the majority on the tax profit far will not have to still represent accurately and benefits. those losses, further profitable in coming years. “Such companies on the portion payments can enjoy some this could be hardwould be more from years in a row income tax of unpaid taxes, proposed interviewed are about they The firm could deduct a loss the The experts through filing pay corporate times higher than reduced years. invoicing generalizations on its current profit that is five pressed to make should expect to pay several years ago year, to reduce their of the Antretter explains, introduction of online corporate measure in previous years,” in fast growing linked directly to NAV. This to follow whether companies for a very profitable that companies to income. the authority more or less. to five adding are the most likely would allow business. For example taxable as it does with limitations – down will sectors, such as IT, “It depends on the benefit from tax loss in real time, just “Now there are growth. – so companies to for invoicing see such exponential had a tax years from 2015 if someone used tills. be advantageous yet companies that “Changes may for example freight electronic on the measure have not of carry forward, Details in other forms specific sectors, confirmed, but tax companies operating in VAT been electronic monitoring by the forwarders or by a decrease closer place. sectors affected ADVERTISEMENT Lunczer of VGD authorities are already in might rates,” notes Katalin 1, the tax authority Kft. “Companies As of January software Ferencz & Partner new tax base and taxnew invoicing introduced a the government benefit from the income tax items, requirement that will help more credits reducing corporate a business’ activityadd-on donations and tax and scrutinize software including easier cultural purposes local closely. The new to as for sport and function referred as a growth as well includes a built-in audit, tax & for tax inspection” tax credits for includes tax allowances the “supplying of data installed by all accountancy be business tax that feature that must with a VAT number. on R&D costs.” of electronicbusiness all more Hungarianon the new requirement, Given the introduction requirements, a “Based Partner should have tills, new software additional VGD Ferencz & partner returns, and invoicing software that allows the frequent VAT believes that, even data export function your strategic to request is paperwork, Antretter tax authority nominal tax burden query if a taxpayer’s less than Hungarian to perform a data even slightly up taxpayers invoicing-related information no higher or they will end says VAT Kuntner Andrea on their concerning Thurn Erik in previous years, Adótanácsadás data structure,” Ferencz Gyöngyi income or profit Könyvelés, könyvvizsgálat in a pre-defined Vékási. “If M&A Könyvvizsgálat, including more their payable taxes expert and EY Partner Tamás returns and therefore www.vgd.eu are likely to increase.

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2016. 04. 06. 21:27

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Budapest Business Journal | April 8 – April 21, 2016

For Vodafone, success is a matter of perception As of April 1, Vodafone scrapped roaming charges for the entire spectrum of its packages. Meanwhile, the size of the monthly data bundles given to users has ballooned and customer satisfaction rates are hitting new highs. Alexandre Froment-Curtil, director of the consumer business unit, says that true success comes only if customers have the perception they are getting great value.

one movie per week free that has just been released on DVD. It’s called the Red premiere and it’s been received very positively. Under another unique Red service, up to five people may log in at a time to watch the same movie. This allows families or friends to enjoy films together, among others, by casting them on TV. The experience is enriched in this way. Alternatively, three different movies can be watched on three different devices at one time, to fulfill diverse needs.

Families constitute a key audience for you in other respects as well, but one that needs to be addressed in a carefully structured way. What’s your key to their heart? A: amilies are core elements of society. For one, we would like to address them as a community, but we also recognize that every individual is different. One straightforward benefit we emphasize is that, if you choose Vodafone, every member of the family can talk to each other free of charge. On the other hand, the more SIMs you have with us from within a family, the bigger the discount per SIM will be.

LEVENTE HÖRÖMPÖLI-TÓTH

You’ve been working for Vodafone Hungary for nearly three and a half years. You can hardly claim you have had an uneventful time! A: There’s been a lot going on, for certain, both in the industry and in the life of Vodafone. A new customer service center has been established in Miskolc with a roughly half a billion forint investment in order to provide premium assistance for Red customers. Now they get connected to a member of our own qualified staff within six seconds, which is a truly amazing figure. For our Alexandre Froment-Curtil, director of the consumer business unit at Vodafone Hungary. business customers we have launched real innovations such as ReadyPay, which provides a convenient and cost-effective Red assistant service is certainly also a Data bundles grew massively in parallel, so you mobile payment method for small key part of that high satisfaction. One are clearly reacting to users’ businesses. We have also gone paperless customer called nine times in a row to in our offices and in our shops on the check whether our advertisement was growing data appetite. for real, that we picked up the phone so A: People have more sophisticated road towards carbon neutrality. quickly... and then, finally, he concluded phones, the existing 4G networks are very strong, and so data usage is bound Vodafone’s unlimited that, yes, it’s really true! to go up. The largest, Red Extra EU+ package, RED, fascinated chat-loving crowds Among Hungarian package offers as much as 5GB, while in enormously as it was revolutionary at providers, Vodafone was the the Red EU Medium+ package the data the time of its launch. It unfolded on first to scrap roaming costs allowance will grow from 2GB to 3GB your watch and must have contributed within the European Union for Red EU per month. Even in the Red Basic EU+ to the fact that customer satisfaction customers. And now, as of April 1, all service package, the size of the available among Vodafone users is particularly postpaid package subscribers get the data bundle will double to 1GB and more high on the market. same treatment. basic plans like Go EU and Go+EU will A: All of our steps are intended to A: This has, again, to do with the fact see the same ‘doubling’ effect. On top of strengthen the perception that clients that our goal is to provide great value. that, the prices of new Red EU+ packages get unique services from us. For example, We have a deep belief that, if it’s good remain unchanged. the quality of the network experience is for the customers, it will be good for the exceptionally strong. Network and data business. Many Red customers who go Conventional television coverage are both super-high, with 98% abroad have become a ‘hotspot’ for family watching is out, and broadband coverage and the largest 4G and friends due to the abolishing of on-demand is in. Your Red network in Europe. Being on Red is also roaming charges and the strong network Mozi solution aims to respond to this a major driver of that satisfaction. RED in Europe. Now that we are abolishing trend. The exclusive release of the customers used 75 million minutes free roaming as such for all postpaid Hungarian Academy Award Winning when they were abroad this year. And we packages, that value gets elevated to a film, ‘The Son of Saul’ on April 1 is strive to solve customer problems better. whole new level. We have even launched evidently meant to ride this wave. Take our policy according to which an option for prepaid cards to also be A: One extra we pride ourselves on is to make available to our Red customers your handset is insured under Red. The exempt from roaming charges.

BBJ_2407_spec_report.indd 19

I have two children, seven and nine years old, respectively. How are the youngest encouraged to become devoted Vodafone fans? A: The package I am particularly proud of is Kid, which is supposed to be your child’s first SIM. No top-up obligation is attached to this pre-paid card; yet, in turn, the child can call the family for free. Once they grow a bit older, they should find our Young package appealing, where data is over-indexed.

Under your Digital School Program, Vodafone aims to improve the digital knowledge of socially disadvantaged pupils and promote the digital transformation of education in Hungary by providing state-of-theart devices for free. As many as 6,424 pupils and 690 teachers are involved in 25 schools all over the country. What has the feedback been like from users, and what is the future for this initiative? A: We encounter immense enthusiasm on the part of everybody. It’s always a great moment to go to a school and show the children how to use the devices. Phase one is to equip people. That’s what this program is about in the first place, but that’s when phase two kicks in, where we try to educate teachers to become more digitally savvy. Thirdly, through the Vodafone Hungary Foundation, we are working together with the Foundation for the Schoolchildren of Hejőkeresztúr, which is specialized in digital education. We want to influence the way that education as such is transformed digital. We firmly believe that this results in such general achievements as higher school attendance and lower dropout rates, because kids’ excitement is much higher. Vodafone has been in this country for 16 years and when we do such a great thing, on such a large scale, it really feels good.

2016. 04. 06. 21:27

20 3

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Budapest Business Journal | April 8 – April 21, 2016

Free Wi-Fi is spreading across Hungary In separate announcements, the Hungarian government and Magyar Telekom both said on April 5 that they would be joining UPC in setting up free hotspots around the country. LEVENTE HÖRÖMPÖLI-TÓTH

Industry estimates suggest that the number of public Wi-Fi hotspots worldwide will increase almost eightfold over the next four years, covering one out of every 20 people on the planet. Here in Hungary, both public and private initiatives are expected to improve access for all. The Ministry of National Development (NFM) said on April 5 that, after completing a survey of existing hotspots at state and local government institutions, it is planning to put at least one indoor and one outdoor hotspot with free Wi-Fi access in every community. The initiative is part of an effort to connect the estimated 883,000 homes in Hungary that still have no broadband access. Backed with HUF 68 billion in European Union grant money and HUF 10 bln in credit, the government should be able to put a lot more people online. But the government will have to plant a lot of hotspots to catch up with UPC, which, through its innovative Wi-Free service, is already providing broadband access to clients at 410,000 spots countrywide. Meanwhile, on the same day as the government’s announcement, Magyar Telekom said that it would launch its own free Wi-Fi service, which would put 100,000 hotspots in 2,000 communities around Hungary, through its Fon solution. Both the UPC and Magyar Telekom hotspots are aimed at existing customers: If you have a contract with UPC, you can go to their website and sign up for the password. Presumably Magyar Telekom will offer something similar. Those who have the password for the free hotspots can log on and use as much Wi-Fi as they want. Because they are password protected, the hotspots provided by telecoms are more secure than public hotspots. UPC’s decision to provide free hotspots a little more than one year ago was in reaction to the “growing need of customers wanting more unlimited internet access on multiple devices, even out of home”, Zoltán Császár, director of strategy, tells the Budapest Business Journal. “By the end of 2014, in the average ‘UPC household’, more than four devices were connected to our Wi-Fi and that number inevitably must have grown last year,” Császár says. Given the huge demand, he says, the number of UPC Wi-Free

BBJ_2407_spec_report.indd 20

“The whole market is experiencing a revolutionary change, as the LTE system can use existing Wi-Fi capacities for mobile internet downloading, individual LTE technologies appear in the Wi-Fi band and Voice over Wi-Fi (VoWi-Fi) solutions are gaining popularity.” obligation and have a very short – no more than 100 meter – effective range,” István Bartolits, head of the Technology Analysis Department of the National Media and Infocommunications Authority (NMHH), explains.

More bandwith and more demand A lot has happened since the first Wi-Fi standard was introduced back in 1999. We are already on the fourth generation, which certainly requires reaction on the part of the regulator. Take band and bandwidth. Whereas first generation devices were suitable to operate in the 2.45 band with the availability of 83.5 MHz, third generation gadgets needed the 5 GHz band with one 200 MHz and one 250 MHz bandwidth. “Demand has increased exponentially, István Bartolits, head of the Technology Analysis Department of NMHH. and even multiple Wi-Fi systems may now operate in a single home with separate channel needs. Since November 2015, electronic communication services may be offered in these bands, which further burdens these networks,” Bartolits points out. “Long-term relief to this situation is expected with short-range data transmission devices operating in the 60 GHz band, where 9 GHz of bandwidth will be available for this purpose. However, data traffic is also expected to expand in parallel with that.” The behavior of mobile providers is also about change, as further penetration of Wi-Fi will become an indispensable part of the public space. Bartolits says he expects providers to cover operating expenses from other sources, without making users pay directly for internet use. In fact, setting up a large number of hotspots is also in the best interest of mobile operators themselves, as in this way they can reduce the workload on their own networks. “The whole market is experiencing a revolutionary change, as the LTE system can use existing Wi-Fi capacities for UPCʼs web page promoting its Wi-Free service. mobile internet downloading, individual LTE technologies appear in the Wi-Fi hotspots should grow even more this year. financing and the stakeholders involved,” band and Voice over Wi-Fi (VoWi-Fi) solutions are gaining popularity,” While it may sound like they are giving he says. a lot away, Császár maintains that there If money is no obstacle, neither is Bartolits adds. “This, however, raises can be benefits for UPC in setting up so regulation. Under the current law, the question of whether such intensive many free hotspots. “We are aware of the short-range Wi-Fi transmitters are Wi-Fi use by service providers can peculiarities of these projects. However, not regulated as intensely as other peacefully coexist with traditional home I wouldn’t say that it is not possible to frequencies. Wi-Fi applications. This may very well make such programs profitable. It always “Wi-Fi systems operate in the band become a new regulatory dilemma in the depends on the structure of project exempt from the individual licensing future.”

2016. 04. 06. 21:27

www.bbj.hu

Budapest Business Journal | April 8 – April 21, 2016

UPC’s B2B segment enjoys double-digit growth Businesses are discovering UPC’s tailormade B2B services in record numbers. In this interview, Ildikó Bodon, VP of Business Services, says UPC can meet clients’ high expectations. LEVENTE HÖRÖMPÖLI-TÓTH

A: Our strategy is to seek such partnerships if it’s not about so-called connectivity services, but rather more complex issues. Wi-Fi, security surveillance or hosting tasks all require additional expertise. These partnerships are adding value to our superior network which is our main strength – not only in B2B, but in our consumer services too. UPCʼs VP of Business Services Ildikó Bodon. national service scope, but we’re ready to serve them on our footprint.

What is the product range that your SOHO-SME Many perceive UPC as a clients are attracted by? retail provider, but you also A: They have a lot of great services to have a strong corporate choose from. Apart from classic telco portfolio. Can you tell us about it? A: True enough, our retail cable television services, UPC Business prides itself on services come to mind first for many running special features such hotel TV, people. Our B2B packages are gaining security surveillance systems or Wi-Fi. It ground though at a neck-brake pace, helps that about a year ago UPC Business which is the achievement of systematic got upgraded to ‘quadruple player’ status building over five or six years. Now we meaning that, on top of broadband, TV and can ensure the technical conditions that telephone, mobile services are also covered meet the demands of potential business by us now. This boosts our reputation, customers. Our primary target group is which has translated into double-digit SOHO-SMEs, though not because our growth figures in the past few years. services could not satisfy the needs of larger corporations. It rather has to do How do you forge alliances with business partners with the fact that we don’t cover the whole to step up the customer country yet, and bigger entities prefer to work together with providers that have a experience in the corporate segment?

Would you say there is a difference between the treatment of retail customers and enterprises? A: The bottom line is to serve all of our clients at the highest level, of course. It is customer needs that differ. Private individuals use the web for entertainment mainly, so if there’s a system crash, it may be unpleasant, but nothing more. Should the internet not be available for businesses for a while, they face immediate losses. Enterprises are therefore offered options that protect them in such emergencies and that make their daily operation smoother. Higher guaranteed internet speed, shorter repair periods, and different domain services all address that purpose.

Are business customers’ considerations reflected in your customer service

protocol? A: Business clients enjoy priority anytime when they contact us, our qualified colleagues trained specifically for the task

await their calls in our call centers in order to get things done in a possibly quickest fashion.

There is a lot going on in the area of innovation. Does UPC Business help make better use of the latest ICT inventions? A: Larger companies that tend to have their own IT department specifically ask for the hottest solutions, no doubt. At the same time, keeping costs low remains a factor. Smaller firms, in turn, can use some guidance. If, say, a restaurant wants to upgrade its digital portfolio, we are happy to give them tips as to how they can get the most out of our products by signing up for premium sports channels or powerful Wi-Fi. The emphasis is on education here. This approach was promoted last year under our pilot ‘UPC Business Challenge’ program, where companies registered in Hungary were shown how telecommunications could be harnessed for better business achievements.

Such efforts and the experience of the recent past should surely make you hopeful about the future. A: We are absolutely confident that we need to continue to focus on surveying and fulfilling customers’ needs, and this is bound to lead to further dynamic growth in our business segment.

budget_bbj_print_hirdetes_252x158_160304_print.indd 1

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2016.03.04. 10:16:27

2016. 04. 06. 21:27

22 3

www.bbj.hu

Budapest Business Journal | April 8 – April 21, 2016

Telecom service providers OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

✓

Free ﬂoat (40.79) Deutsche Telekom AG (59.21)

Christopher Mattheisen János Szabó Mohamed Elsayad

1013 Budapest, Krisztina körút 55. (1) 458-0000 – –

✓

Telenor Hungary Szolgáltató Kft. (25.01) Telenor Mobil Communications AS (74.96), NYE Telenor Mobil Communications III AS (0.03)

Christopher Laska Nakul Sehgal Mike Michel

2045 Törökbálint, Pannon út 1. (1) 464-6000 (1) 464-6100 –

Diego Massidda David Garcia Alexandre Froment-Curtil

1095 Budapest, Lechner Ödön fasor 6. (1) 288-4288 (1) 288-3200 –

COMPANY PACKAGE(S)

QUADRUPLE PLAY (INTERNET, TV, LANDLINE PHONE, MOBILE)

PACKAGE TYPES SOLD

TRIPLE PLAY (INTERNET, TV, LANDLINE PHONE)

OTHER

ISDN

ANALOG CABLE NETWORK

ANALOG WIRE NETWORK

OPTICAL CABLE NETWORK

MOBILE NETWORK

OTHER

SATELLITE TV

INFRASTRUCTURE TYPES

VOIP

LEASED LINE

CABLE TV

IPTV

CABLE INTERNET

MOBILE INTERNET

XDSL

LANDLINE TRANSMISSION

MOBILE VOICE TRANSMISSION

SERVICES

NO. OF ACTIVE SUBSCRIBERS

COMPANY WEBSITE

TOTAL NET REVENUE IN 2015 (HUF MLN)

RANK

Ranked by total net revenue

MAGYAR TELEKOM NYRT. www.telekom.hu 1

656,342 5,503,964

(1)

✓

–

✓

–

✓

TELENOR HUNGARY ZRT. www.telenor.hu 2

VODAFONE MAGYARORSZÁG MOBIL TÁVKÖZLÉSI ZRT. www.vodafone.com

3.5 million 155,363 (approx.)

–

✓

–

✓

–

✓

–

www.upc.hu

www.invitel.hu

DIGI TÁVKÖZLÉSI ÉS SZOLGÁLTATÓ KFT. www.digi.hu

–

✓

–

✓

–

✓

–

✓

61,914

✓

–

✓

–

✓

Virtual mobile network

✓

–

✓

– Liberty Global plc. (100)

Magnus Ternsjö Ádám Jakabos Anita Carra

1092 Budapest, Kinizsi utca 30–36. (1) 456-2600 (1) 456-8899 info@upc.hu

–

Data center services, full-range ICT solutions, WiFi

✓

Invitel Technocom Kft. (0.007), municipalities (0.002) Magyar Telecom B.V. (99.991)

David Blunck – –

2040 Budaörs, Edison utca 4. (1) 801-1500 (1) 801-1501 info@invitel.co.hu

✓

Ungureanu – Florin, Ryszka RCS&RDS S.A. Sambor (100) – –

1134 Budapest, Váci út 35. (1) 707-1000 (1) 707-0009 ugyfelszolgalat@ hu.digi.tv

András Kápolnai Mihály Halász András Tóth

1119 Budapest, Petzvál József utca 31–33. (1) 464-2464 (1) 464-2525 antennah@ahrt.hu 2040 Budaörs, Ipartelep utca 13–15. (1) 814-4000 (1) 814-4047 info@gts.hu

44,463

39,426 (2014)

500,000

✓

–

✓

17,626

✓

–

✓

10,107 (2014)

✓

–

✓

–

✓

–

GTS HUNGARY KFT.

TARR KFT.

HUNGARO DIGITEL KFT.

NETFONE TELECOM KFT.

ACE TELECOM KFT.

976

3,363

✓

–

✓

–

✓

–

✓

DRÁVANET ZRT.

408

2,887

✓

–

✓

–

✓

www.tarr.hu

www.hdt.hu

www.netfone.hu

www.acetelecom.hu

www.dravanet.hu

–

Broadcasting, telecom, multimedia

www.gts.hu

✓

Ÿ ✓ ✓ Ÿ ✓ ✓ ✓ ✓

ANTENNA HUNGÁRIA ZRT. www.ahrt.hu

–

132,338(2)

INVITEL TÁVKÖZLÉSI ZRT. 5

–

– Vodafone Europe B.V. (100)

UPC MAGYARORSZÁG KFT. 4

–

7,830

✓

–

✓

–

✓

–

✓

Ÿ Ÿ Ÿ Ÿ

–

✓

–

✓

–

✓

2,416

–

983

8,292

✓

–

✓

–

✓

–

Virtual server solutions, Wiﬁ hotspot operation, server hosting

–

✓

–

✓

–

✓

–

✓

–

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

–

Hungarian state (100) –

✓

–

✓

Magyar Telekom Nyrt. (100) –

Gergely Árvai – –

✓

Individuals (100) –

János Tarr Katalin Ruzsinszky Bartáné Péter Kuczkó

Ÿ Ÿ Ÿ Ÿ Ÿ

Satellite data transmission

Microwave connection

–

✓

–

Antenna Hungária Zrt (55.38) PT Participações SGPS S.A. (44.62) Morando Zrt. (80), Zsolt Wilhelm (10) Scanwinavia AB (10)

António Felizardo Éva Illés Csíkné –

Satellite infrastructure

–

✓

–

✓

–

Digital landline, radio microwave

–

✓

Individuals (68), ThreeF Kft. (32) –

Attila Farmosi, Gábor Varga Gábor Varga Viktória Krall

–

✓

Pallas Ofﬁce Kft. (81), other (19) –

Zsombor Papp Rezső Dunay Csaba Csizmadia

–

Ÿ Ÿ Ÿ Ÿ Ÿ

Zsolt Wilhelm Zsolt Wilhelm Lajos Varga

7100 Szekszárd Kadarka utca 18. (74) 416-000 (74) 413-636 info@tarr.hu 2310 Szigetszentmiklós-Lakihegy, Komp utca 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, Zay utca 3. (1) 437-0590 (1) 437-0599 ofﬁce@ acetelecom.hu 7624 Pécs, Budai Nagy Antal utca 1. (40) 811-118 (1) 890-0891 info@dravanet.hu

NOTES: (1) Mobile customers: 5,503,964 (retail and business), voice customers: 1,398,220 (retail), 62,542 (business), broadband customers/access: 985,952 (retail), 8,676 (business), TV customers: 960,092, electricity points of delivery: 106,564, gas points of delivery: 7,427. (2) Business year of Apr. 1, 2014-March 31, 2015.

BBJ_2407_spec_report.indd 22

2016. 04. 06. 21:27

4Focus BBJ

Rustic getaways

Lush weekends

As the weather improves, our thoughts turn to countryside pampering. The Hertelendy KastĂŠly hotel in Kozmapuszta, shown here, is one of our favorite weekend getaways.

BBJ_2407_spec_report.indd 23

2016. 04. 06. 21:28

www.bbj.hu

24 4 Focus

Budapest Business Journal | April 8 – April 21, 2016

Luxury in the countryside The thousands of possibilities for great countryside getaways in Hungary include some top-end options. ANIKO FENYVESI

As the warm spring weather sets in, hardworking Budapesters turn their thoughts to the countryside, where Hungary boasts a wealth of excellent weekend getaways. Those ready to splash out for luxury can enjoy some of the country’s finer dining and lush spa treatments, in stunning rural settings. The following are some of fancier options around the Hungarian countryside.

Chateau Visz Lake Balaton is a popular summer destination but the nearby Somogy hills that surround the Chateau Visz hotel provide a great getaway any time of the year. In operation for nearly a decade, this fully refurbished chateau once served as the residence of a count by the name of Jankovich. Along with a host of luxuries, the hotel boasts the Chateau Visz restaurant, which is consistently rated one of the best in the country. Given the expansive green property surrounding the hotel, spring is the ideal time to visit, when you can witness the garden come into full bloom. The hotel is quite remote, which is all the more reason to never leave the premises since there is plenty to see and do within the property. Explore the 3.5 km private trail, indulge in a spa treatment or sample the restaurant’s renowned sevencourse meals in the glass-enclosed dining room. The menu, which changes monthly, is spiced up by the hotel’s own herb garden and inventive dishes range from French to Mediterranean to Hungarian, all beautifully presented. Befitting its fivestar surroundings, the service is also top notch. Post dinner digestifs can be enjoyed in the hotel’s reading room where a roaring fire provides the perfect backdrop for sampling from a fine selection of whisky and cognac and immersing in a good book. The hotel’s modern spa facilities feature a small gym, a spring-fed counter-flow pool, Finnish and infrared saunas, a steam room and a lounge area, as well as an on-staff masseuse. If you’d rather not drive, pickup service can be arranged from the nearby HévízBalaton airport at Sármellék. (chateau-visz.com.)

Hertelendy Kastély The Hertelendy Kastély hotel has all sorts of luxurious features from a private airstrip and helicopter landing pad to its own thermal spring, a luxurious spa and an exceptional restaurant, all of which

BBJ_2407_spec_report.indd 24

Fancy inside and out: Hertelendy Kastély hotel. can facilitate a perfect, self-contained getaway. In 2009, it became the first Hungarian hotel to join the prestigious Relais & Chateaux club. Since then, however, the investor has revised the hotel’s business strategy and those wishing to bed down here may only do so if they book a minimum of five rooms. All the more reason to gather the troops; you’re likely to have the whole place to yourself as a result. Located on the plains of Somogy county, about 40 km south of the western tip of Lake Balaton, the sumptuous villa was built in the 1920s by the Hertelendy family in the once thriving community of Kozmapuszta and was, at one point, a farmer’s cooperative during the communist period. It was converted to its current state about ten years ago through a HUF 5 billion investment. The hotel’s Albizzia restaurant has gained a reputation for its modernized Hungarian cuisine, fuelled by locally sourced ingredients such as game and freshwater fish. Indulge in a multiplecourse menu, served in an elegant dining room that opens onto a stunning garden terrace. Spectacular desserts will be your reward for surviving the multiple courses. Along with the restaurant, the spa is one of the hotel’s strong suits and features a whirlpool bath, saunas and steam bath as well as an outdoor pool fed by a thermal spring adjacent to an authentic Finnish wood-burning sauna. It’s far away enough from the action though to provide a bit of privacy. Other activities include horseback riding, tennis, skeet shooting and hunting as well as a scenic trip in one of the hotel’s small passenger planes. The hotel has 14 luxury rooms and suites and a separate hunters’ lodge with six apartments that can accommodate canine family members. (hotel-hertelendy.hu.)

Soaking in Hévíz The gorgeous outdoor thermal lake of Hévíz is warm enough to swim in all year round, and this natural wonder has turned that area, just west of Lake Balaton, into a magnet for tourists seeking wellness packages. The fancier offerings in the eponymous town of Hévíz include the five-star Lotus Therme (lotustherme. accenthotels.com) and the “four-star superior” Hotel Europa Fit (www. europafit.hu). Both offer such extensive sauna and swimming facilities that you may never feel the need to venture out toward the lake that made this town a destination to begin with. Both also tempt guests to stay in-house with fancy dining offered through inclusive meal packages.

Other attractive countryside hotels Although more humble than the aforementioned hotels, the country getaways listed below have all the necessary features for a wonderful weekend away.

The Káli Art Inn located in the romantic rolling hills of the Káli Basin in Köveskál, provides simple elegance away from the busy shores of Lake Balaton. This rustic countryside hotel also features one of the region’s best restaurants, stocked with some of the best locally produced wines. (kaliartinn.hu) Although Villa Tolnay is a modern facility it has a charm reminiscent of another era. The service provided by the family that produces the wines of the same name is outstanding, as is much of their wine. The restaurant offers full breakfasts and cold plates and the sunny terrace with a view onto the rolling vineyards is a great place to soak in the bucolic atmosphere of the Káli Basin. (villatolnay.hu) The Kosbor Panzió is a simple country affair next to Hungary’s border with Austria in the quiet town of Magyarszombatfa. At the inn’s center is a lovely garden full of large old trees and for those keen on thermal waters, the nearby spring and strand at Alsomarác can provide more family-centric activities. (kosborpanzio.hu)

2016. 04. 06. 21:28

www.bbj.hu

4 Focus

Budapest Business Journal | April 8 – April 21, 2016

Four-/Five-star hotels outside Budapest

✓

Danubius health spa ResoRt aqua / danubius Hotels zrt.

224 6 1

saliRis ResoRt spa & confeRence hotel / szalók Holding zrt. Danubius health spa resort Hévíz / danubius Hotels zrt. www.danubiushotels.com/ heviz

3,006 (2014)

110–150 110–150

Four-star

204 10 6

90–150 90–150

Four-star superior

203 7 7

3,006 (2014)

100–150 100–150

Four-star superior

paRk inn by RaDisson sáRváR ResoRt & spa / p.s. hotel kft.

201 22 5

113–135 144–166

Danubius health spa ResoRt bÜk / danubius Hotels zrt.

200 – 3

3,006 (2014)

90 154

hotel silveR / geotHerm ÜdÜlő kft.

196 6 8

Four-star

zsuzsa pápai – –

8380 Hévíz, Attila utca 1. (83) 501-500 (83) 340-468 hotel@carbona.hu

–

1984 2015

Danubius Hotels Zrt. (100) –

péter mácsai – –

8380 Hévíz, Kossuth Lajos utca 13–15. (83) 889-500 (83) 889-402 aqua.reservation@ danubiushotels.com

–

2005 –

Nemzeti Reorganizációs Nonprofit Kft. (100) –

péter schmidl – –

3394 Egerszalók, Forrás utca 4. (36) 688-688 (36) 688-689 sales@salirisresort.hu

✓

Bike rental, gift shop

1976 2015

Danubius Hotels Zrt. (100) –

péter mácsai – –

8380 Hévíz, Kossuth Lajos utca 9–11. (83) 889-400 (83) 889-402 heviz.reservation@ danubiushotels.com

–

Currency exchange, gift shop

2006 –

P.S. Hotel Kft. (100) –

bálint tölli Mariann Lukács Krisztina Hamar

Massage

1986 2014

Danubius Hotels Nyrt. (100) –

péter katz Viktória Németh István Henrik

lászlóné maklári Tamás Szabó Péter Molnár

✓

–

✓

–

✓

–

✓

–

2012 –

VRS Part HOTEL Kft. (100) –

péter bársony – –

2481 Velence, Béke utca (22) 589-900 (22) 589-901 reservation@ velencespa.com

✓

Massage

1998 2008

Lajos Tóth (100) –

lajos tóth Sándor Balogh Andrea Gurzó

4200 Hajdúszoboszló, Mátyás király sétány 25. (52) 363-811 (52) 362-639 info@hotelsilver.hu

✓

Massage

2008 2013

Divinus Hotel Üzemeltető Kft. (100) –

János szűcs – –

4032 Debrecen, Nagyerdei körút 1. (52) 510-900 (52) 510-901 info@hoteldivinus.hu

✓

Massage

2000 2016

DBI Ingatlanhasznosító Kft. (100) –

gábor nádas Tímea Kertész Zsófia Nagy-Bándli

2025 Visegrád, Lepence-völgy hrsz. 1213 (26) 801-900 (26) 801-918 www.thv.hu

✓

–

Massage, bowling, snooker

1971 2015

Árpád Lantos (50), István Kárász (50) –

árpád lantos Attiláné Strobl Anett Balogh-Thoma

2025 Visegrád, Fekete-hegy (26) 398-311 (26) 597-518 info@hotelsilvanus.hu

–

2005 –

Exter-Immo Zrt. (100) –

andrás főnyedi – –

9400 Sopron, Ojtózi fasor 3. (99) 515-000 (99) 515-001 info@fagushotelsopron.hu

✓

–

www.hotelsilver.hu

170 1 7

702

39 146

Four-star superior

–

✓

–

✓

–

✓

hotel Divinus / Divinus hotel Üzemetető kft.

169 9 4

110 130

Five-star

✓

–

✓

theRmal hotel visegRáD / theRmal hotel visegrád zrt.

164 10 10

1,600

103 159

Four-star superior

✓

–

✓

silvanus confeRence anD spoRt hotel / silvanus hotel kft.

155 8 9

945

117 169

Four-star

–

✓

–

✓

–

✓

–

✓

hotel fagus sopRon cReative hotel / consulting kft.

143 2 6

75–150 75–150

✓

6726 Szeged, Szent-Györgyi Albert utca 16-24. (62) 566-466 (62) 566-468 hotelforras@ hunguesthotels.hu

Sauna park, massage, baby swimming

–

✓

9740 Bükfürdő, Európa út 1. (94) 889-400 (94) 889-413 buk.reservation@ danubiushotels.com

1987 2010

✓

9600 Sárvár, Vadkert körút 4. (95) 530-100 (95) 530-101 info.sarvar@ rezidorparkinn.com

Massage

✓

aDDRess phone fax email

✓

–

✓

top local executive cfo maRketing DiRectoR

Hunguest Hotels Zrt. (100) –

–

BBJ_2407_spec_report.indd 25

Budainvest Kft. (84.41), Bakonyi Erőmű Zrt. (5), other (10.59) –

✓

Four-star

1997 2015

✓

Four-star superior

www.fagushotelsopron.hu

–

✓

80–150 110–260

www.hotelsilvanus.hu

✓

179 4 7

info@thv.hu

9600 Sárvár, Vadkert körút 5. (95) 889-500 (95) 889-510 info@spirithotel.hu

✓

Four-star superior

www.hoteldivinus.hu

andrás kaisinger András Kósi Krisztina Kovács

✓

108 144

www.velencespa.com

–

(100) –

✓

12,762 (2014)

www.hotelforras.hunguesthotels.hu

✓

2008 –

✓

otheR

✓

8749 Zalakaros, Alma utca 1. (93) 542-550 (93) 542-501 sales@karos-spa.hu

theRapy

–

botond Üsztöke Margit Horváth Éva Szekeres

pools

–

Karosinvest Zrt. (100) –

events

Four-star superior

160–210 160–210

–

2004 2016

caR Rental

✓

8237 Tihany–Révfülöp, Rév út 3. (87) 538-500 (87) 538-516 reserv@clubtihany.hu

inteRnet in Rooms

✓

tamás károly Józsefné Papp Beáta Csizmadia

gaRage

–

(86) (14)

family-fRienDly

✓

1985 2015

beauty salon

–

Open-air bath, sports center, animation, conference venue

Wellness

✓

oWneRship (%) hungaRian non-hungaRian

business coRneR

✓

velence ResoRt&spa / vRs paRt hotel kft.

✓

250 5 3

✓

natuRmeD hotel caRbona / Hotel Carbona zrt.

hunguest hotel foRRás / Hunguest Hotels zrt.

Five-star

www.danubiushotels.hu/buk

Four-star superior

127 227

www.parkinnsarvar.hu

1,449

83 173

271 18 5

www.salirisresort.hu

Four-star

spiRit hotel theRmal spa sáRváR / spiRit hotel kft.

www.danubiushotels.hu/aqua

65-105 110-180

www.karos-spa.hu

www.carbona.hu

902

298 8 4

www.spirithotel.hu

300 30 7

yeaR establisheD yeaR last RenovateD

hotel kaRos spa / karosinvest zrt.