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BUDAPEST

BUSINESS JOURNAL

VOL. 25. NUMBER 19

OCTOBER 20 – NOVEMBER 2, 2017

SPECIAL REPORT

Telecoms Journal bbj.hu www. t Business

| Octobe

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s Finding Companie lop: Telco 15 and Deve Coalition Compete ary’s 5G Grow?14 r: Hung ite Ways to ion Desp r the Bette The Faste ing Market Posit DIGI Build Cards Close16 Keeping

are ’s telcos amid Hungary hard to grow all fighting fit margins, yet tight pro investing in the ile the wh 5G future superfast

Humans are not Horses SS BUSINE

SOCIALITE

Over-ordering Authenticity in Budapest

David Holzer uses his nose to track down a highly recommended (and very Hungarian) restaurant, and along the way stumbles across the mystery of a statue of TV detective Columbo and a loyal Basset Hound. Oh, and just one more thing…. 21

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Futurist Gerd Leonard, one of the top 100 influencers in Europe, tells a Budapest audience mankind must embrace technology, but place human values above it, BUSINESS to make the most of what Businesses Must Help the future has to Fight Corruption NEWS offer. 9 The legal framework is getting tougher regarding anti-corruption worldwide, but it is also up to businesses themselves to make a difference at promoting fair and open markets by strictly complying with those rules.8

Banks More Disposed to Lend for Real Estate

Hungarian banks are increasingly favorably disposed to providing finance for real estate developments and acquisitions, with the loan to value ratio rising, reflecting confidence in the Hungarian markets, according to research from KPMG. 4

2017. 10. 18. 19:14

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Budapest Business Journal | October 20 – November 2, 2017

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THE EDITOR SAYS

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OF MEN AND HORSES: WELCOME TO THE FUTURE

Y

ou don’t have to be a fan of Fritz Lang’s iconic 1927 movie “Metropolis” to realize that the role machines will play in our future has had the capacity to fill us with fear and fascination in almost equal measure for coming up on a century now.

We hear so much about Artificial Intelligence and cognitive computing, let alone jobs that will be automated and careers that will die out, that it seems just a short step from here to a dark and dystopian vision of our future.

All of which made the presentation at the tenth anniversary event of the Business Council for Sustainable Development in Hungary by futurist Gerd Leonhard so refreshing for its optimism. Leonard was speaking via a skype link (he was in Frankfurt, on his way to India), but as a metaphor for how technology can help, that was a pretty good start.

Not that Leonhard is in any way naive about what lies ahead. As he puts it: “It is important to use these tools [technology] carefully… if not, things will not end well for us.”

We need to adopt a global way of thinking and a global set of ethical principles he said. Perhaps the most concerning thing he said was that most governments “are ten years behind the curve on these issues, and this is all coming in the next five years”. I generally prefer not to put too much faith in governments, let alone exponential faith.

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But Leonhard even had an answer for that most disturbing of thoughts: are we the horses of the digital age? If, as he says, most of the jobs in the next 10 years have not even been invented yet, what should we, what should our children, study? The answer is the one thing that sets us apart from machines; our emotional intelligence, our humanity.

Creativity, imagination, and playfulness are all beyond machines. “The future is better than we think; we do have to give people more credit,” he said.

Two final thoughts about the BCSDH anniversary, as we did not have room elsewhere in the paper. Firstly, as it does each year, the council has produced a set of guidelines to help companies meet both the U.N.’s Sustainable Development Goals and its own Action 2020 program.

This year the focus is on sustainable employment. “The labor market has been changing at an accelerating pace, and there is no company in Hungary which is not affected by these changes,” said Attila Chikán Jr., chairman of the organization. The recommendations are three-fold: 1) Create employment systems which fit the life status of individuals; 2) Promote lifelong development; and 3) Support the career paths of women.

Secondly, the BCSDH really does follow through on its own manifesto. The leftovers from the lunch were collected by the Budapest Bike Maffia (sic) for distribution to the homeless. Better yet, at the reception desk, guests were asked where they had come from and by what mode of transport. The event was planned to be carbon neutral, which means trees are to be planted to offset its footprint.

As Irén Márta, BCSDH managing director explained, more than 40 Hungarian fruit trees are to be planted at local schools, thus providing food, shelter and clean air for years to come.

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An old companion for the long run

2017.04.10. 14:09:37

2017. 10. 18. 19:14

1

1 News | 3

News

///macroscope

Construction Boom Finally Visible

Several important pieces of macro data were published in the previous weeks, of which several surprised analysts. For one, the Hungarian construction sector can boast an eightyear record in production.

Both domestic and emerging market analysts in London had expected the inflation rate to pick up to 2.7% in the last month of the summer.

Food prices rose by 3.1%, with the highest price rise of 6% on average was recorded for alcoholic beverages and tobacco.

Seasonally adjusted core inflation, which excludes volatile fuel and food prices, accelerated further in September, to 2.9%, the highest rate recorded since January 2014. In September 2017 compared to the previous month, consumer prices increased by 0.1% on average.

The surprise was caused by the further increase of the price of tobacco products, while the rest of the product groups behaved according to expectations, Takarékbank analyst Gergely Suppan, said. As for the rest of the year, the analyst expects inflation rate to hover around the current level, and it could even fall back to below 2.5% by the end of the year, due to the high base of fuel prices. On average, Suppan thinks consumer prices will increase 2.4% in 2017.

The KSH has also published a second reading of August’s industrial output, which is basically in accordance with the first reading, and shows that the volume of industrial output was 6.8% higher than a year earlier based on both working day-adjusted and non-adjusted indices. Output of the automotive sector grew 5% year-on-year in August after two months of decline.

This reading of the data proved previous assumptions that the poor figures of the past month were mainly caused by the summer stoppage falling in a different period than in the base year.

ZSÓFIA CZIFRA

The volume of construction output grew 36.8% in August from the same period a year ago, the Central Statistical Office (KSH) reported. Output increased in both main groups of the area: by 46.8% in the construction of buildings and by 24.1% in that of civil engineering works.

Compared to the previous month, and based on seasonally and working day adjusted indices, construction output grew by 9.8% in August.

Growth in the construction of buildings was primarily the result of industrial and warehouse buildings and, to a lesser extent, sports facilities, as well as educational and residential building. In the case of civil engineering works, the production grew from a low base, and as a result of road, railway and utility construction works.

Good news for the future is that the volume of new contracts increased by

46% compared

to the same period of the previous year. Within this, the volume of new contracts concluded grew by 95.4% for the construction of buildings, and by 18.9% for civil engineering works. New contracts were concluded mainly for the construction of industrial buildings and, to a lesser extent, housing and hotel buildings.

Growth in civil engineering works was the result of contracts signed for railway development as well as utility and road construction.

Exceeding Expectations The performance of the sector exceeded expert predictions. Takarékbank

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analyst András Horváth noted that the better-than-expected data indicates a significant, 28% increase for the full year for the sector, but in the light of already announced developments and the high number of building permits, the growth could go even higher. In comparison, the construction sector contracted by more than 18% in 2016.

The sector may continue to expand at a robust pace, Minister for National Economy Mihály Varga said in reaction to the data revealed by the KSH. The sector’s growth is being increasingly underpinned by the government’s family housing allowance scheme; the number of newly built homes was up 46% and the number of building permits increased more than 40% year-on-year in the observed period, he added.

The pace of growth was outstanding in August, and not only in historical terms, but also when compared to data from the V4 countries, and it is likely

to place Hungary on top of the EU ranking when comparable data becomes available, Varga noted. Since 2010, output of the Hungarian construction sector has increased by more than 20%.

However, the rosy outlook for the sector is somewhat overshadowed by the lack of available workforce, analysts have pointed out. On the other hand, the number of people working in construction has increased lately, and is

now at

298,000.

Before the financial crisis, the sector employed 330,000 people.

CPI Surprise The latest consumer price index was also something of a surprise to some analysts: inflation rose 2.5% year-onyear in September, slowing somewhat from a 2.6% increase in the previous month, according to KSH data.

Numbers to watch in the coming weeks The KSH will publish the second reading of retail trade data for August on October 24, after it reported a 4.6% year-on-year increase in the first reading. A few days later, the latest employment and unemployment figures will be released for the July-September period. In June-August, the unemployment rate was a record low of 4.2%, with 4.4 million people in employment.

On November 3, KSH will come out with the number of construction permits in the first three quarters of the year.

2017. 10. 18. 19:14

4 | 1 News

REAL ESTATE NEWS

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Budapest Business Journal | October 20 – November 2, 2017

Banks More Disposed to Lend for Real Estate Hungarian banks are increasingly favorably disposed to providing finance for real estate developments and acquisitions, with the loan to value ratio rising, reflecting confidence in the Hungarian markets, according to research from KPMG. GARY J. MORRELL

Office development is the most favored sector, which bucks the trend in CEE and wider Europe, where residential development is the prime target for lenders. In Hungary, office is followed by residential project financing, then industrial, and then retail.

In general, European banks are well disposed in their lending policies to all the

The survey concludes that, in comparison to only three years ago, the real estate sector in Hungary “has significantly strengthened and banks are therefore more willing to finance market players.”

Although average annual GDP

growth of

3.07%

Campona shopping center, purchased by investors and planned to be redeveloped.

classic property market sectors – retail, logistics, residential, office and hotel.

Lending conditions on offer for Hungary are increasingly favorable as has been the trend for other European countries.

KPMG’s “Property Lending Barometer 2017”, its eighth annual survey, is based on interviews with representatives from around 100 European banks in 17 European countries, including Hungary, Austria, Croatia, Czech Republic, Germany, Poland, Romania, Serbia, Slovakia, and the United Kingdom, conducted in May. “The positive tendency of increased lending activity in Europe is likely to continue as [it has] in 2017, supported by eased lending conditions and sustained demand across all loan categories,” said Andrea Sartori, head of CEE real estate at KPMG.

is forecast for Hungary for 2017-2019, according to the Economist Intelligence Unit, a steep drop in construction activity was mainly responsible for the slowdown in economic activity in 2016.

Accelerate Sharply “GDP is expected to accelerate sharply by 3.6% in 2017, as increased consumer spending and more EU-funded construction projects – backed by government spending – will help support economic activity. Unemployment dropped to a historic low of 5.1% in 2016, the fifth lowest within the EU, and is anticipated to further decrease to 4.4% in 2017.”

However, similarly to other CEE countries, Hungary suffers from a labor shortage in many sections and professions due to emigration to Western Europe, which has been driving up wages and making it difficult to recruit.

Hungarian banks are more open to both new developments and income generating projects, with a slight preference towards

the latter according to Sartori. “In comparing the total volume of real estate loans during the last 12-15 months, there are marginally more income generating projects financed by banks than new development projects,” he said.

Despite the more favorable lending conditions for Hungary, it still lags behind Czech Republic and Poland with regard to commercial property investment acquisitions. CEE investment transaction volume (excluding Russia) saw an investment transaction volume of EUR 5.6 billion, which is less than 5% of the aggregate European volume.

However, the region is continuing to attract investors, reflected by a 10% yearon-year rise compared to the same period of last year. This year, Czech Republic has been the top investment target with EUR 2 bln in deals concluded in H1, followed

by Poland with EUR 1.6 bln. Hungary came third with circa EUR 750 million.

The major transaction was the Hungarian component of the purchase of the CBRE GI retail fund by CPI with a volume of circa EUR 180 mln.

Banks surveyed by KPMG see nonlocal commercial banks as their biggest competitors, followed by private equity/ debt funds and insurer/pension funds.

Average loans were in the EUR 16 mln-23 mln range, while the preferred volume by lenders was EUR 18-25 million.

All Hungarian respondents to the survey foresee an increase in the size of their real estate loan portfolios.

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2017. 10. 18. 19:15

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Budapest Business Journal | October 20 – November 2, 2017

REAL ESTATE NEWS

1 News | 5

DHL Establishes new Airport Logistics Center

DHL Express has occupied its new built-to-suit 6,000 sqm warehouse facility in the vicinity of the Ferenc Liszt International Airport, built by Market Építő with CBRE providing construction management services.

GARY J. MORRELL

The move will further streamline the operations of DHL in Budapest and develop the airport area as a logistics hub.

In the first quarter of the year, the airport handled more than 30,000 tonnes of cargo.

“DHL Express has already been present in Hungary for more than 25 years. The new lease agreement between Budapest Airport and DHL Express for another 15 years clearly reflects the commitment of

DHL’s airport warehoue facility.

Deutsche Post DHL Group to Hungary and the airport,” said Zoltán Bándli, managing director of DHL Express Hungary.

“The new warehouse capacity will give DHL space to accommodate the volume growth of our business, with the new state-of-the-art sorting technology, which includes fully automatic shipment processing, allowing us to process more than

6,000 pieces

per hour, three times our former capacity.”

There will be more than 200 employees

employed at the 2,400 sqm of offices at the complex.In developing the project, airport operator Budapest Airport cleared the plot of the outdated ex-Malév Cargo warehouse in order to build what it describes as a modern integrator facility for DHL Express and TNT. It is in close proximity to Terminal 1 of Ferenc Liszt Airport with direct access to the cargo apron.

The operator is also developing the circa 20,000 sqm Cargo City, which will be aimed at tenants specializing in cargo handling. The complex will have a capacity of 150,000 tonnes per year.

The logistics developments form part of

Budapest Airport’s plans to invest EUR 160 million on airport developments by 2020. Other elements include the EUR 17 million Pier B that will deliver 27 new boarding gates and 10 new bridges on a 10,000 sqm area, with a proposed completion date of fall 2018. Alongside that, Terminal 2C has a proposed delivery of 2020-2021.

“Our goal is to create an efficient infrastructure and an ideal platform for cargo distribution, which will be inviting for cargo partners, new airlines and forwarders,” commented József Kossuth, cargo manager at Budapest Airport.

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2017. 10. 18. 19:15

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Business

Business

Foster and Partners to Design MOL Campus

Whatever you think of high rise buildings, the appointment of architects Foster and Partners to design the new MOL headquarters (to be known as the MOL Campus) on the banks of the Danube, guarantees it will be dramatic.

ROBIN MARSHALL

The award-winning British architectural firm has an enviable back catalogue, including being responsible for one of modern Londonʼs most iconic buildings, 30 St Mary Axe, better known as the Gherkin. For the MOL project, it will work with the well regarded local company Finta és Társai Építész Stúdió Kft. The skyscraper will rise 28 stories to 120 meters high, the tallest maximum height for a building in Budapest (Parliament and St. Stephen’s Basilica, are both 96 meters high), and will be topped by a panoramic terrace open to the public. The campus will function as the HQ for MOL units currently

operating in 11 separate buildings, with the company scheduled to move in by 2021. It is arguably the most controversial element of the BudaPart project at Kopaszi gát (dam) near Lágymányos Bay. BudaPart is a phased development project scheduled to take ten years to fully realize, by which time 6,000 people are expected to be living there, with 24,000 working in its offices. The first two residential buildings, which will have a total of 265 apartments, and BudaPart Gate, an 18,000 sqm class “A” office unit are currently under construction. Sales have just been opened for two more residential buildings offering another 390 units.

Artist’s rendering of the MOL Campus.

The Right Partners “We are indeed very excited that MOL has chosen Foster and Partners as design architects for the MOL Campus,” Gergely Árendás, managing director of Property Market Ingatlanfejlesztő Kft., the owner and developer of BudaPart, told the Budapest Business Journal. “We have taken part in the architectural selection process and firmly believe that they are the right partners for MOL and for this project. It will be a truly state of the art building at a building quality as yet unseen in Budapest.”

Asked if the builder in him was not a

little sorry that Property Market would not now build the high-rise, Árendás said he had no regrets. “A truly unique HQ building is only possible to do if the occupier owns it, so we are therefore confident that this is the right way to implement this project.”

Not everyone has been so welcoming of the planned skyscraper, however, a fact Árendás admitted was almost inevitable in an earlier interview with the BBJ when he said “High rise buildings are always the subject of public debate.”

Most recently István Scheller, a former principal architect of Budapest, waded into the debate when he wrote a letter to express his concerns about the building, according to 24.hu. Scheller said highrise buildings is no longer the dominant trend in the world, there should have been a debate on the issue.

He argued that other recent large buildings in priority areas along the Danube, such as the Duna Arena, the National Theater, and the Palace of Arts have all failed to become popular. He also said the building does not fit into the landscape, neither regarding the Buda hills, nor the historical character of the town.

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2017. 10. 18. 19:04

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Business

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Budapest Business Journal | October 20 – November 2, 2017

Businesses Must Play Role in Fighting Corruption The legal framework is getting tougher regarding anti-corruption worldwide, but it is also up to businesses themselves to make a difference at promoting fair and open markets by strictly complying with those rules − that was one of the main messages of a conference on the corporate compliance challenge hosted by AmCham.

LEVENTE HÖRÖMPÖLI-TÓTH

Hungary is an attractive investment target thanks to a skilled workforce and a great location, among other things, noted David Kostelancik, Chargé’d Affaires of the U.S. Embassy in Budapest in his opening remarks at “The Corporate Compliance Challenge: Crisis Prevention and Threat Management” event. No matter how much of a pro-business approach the country has, though, corners cannot be cut when it comes to compliance and corruption.

And yet, Hungary is gaining a reputation for cronyism and favoritism, in particular in the strategic fields of banking, media and

Fabien Ganivet, partner at DLA Pipier.

Photo by AmCham/Lázár Todoroff.

energy, and it ranks very low according to the corruption perception index of Transparency International, Kostelancik said.

European Union development funds are also widely viewed as magnets for corrupt activities. Widespread bribery is bad for business, as many international companies seated in Hungary complain that their competitiveness is hurt because they are not ready to participate in irregular practices, Kostelancik added.

The negative impact on the talent pool takes its toll, too; an alarming percentage of the young believe you need to be engaged in corruption to get ahead in Hungary, and so, instead, they leave the country.

“At every company, corruption should be put on the top of the priority list,” Kostelancik said. “You have a powerful voice; you can make a difference promoting fair and open markets which will trigger more investments and growth.”

Negotiated Settlements In his keynote speech, Fabien Ganivet, partner at DLA Piper and former advisor to the cabinet of Homeland Security and the French minister of defense, highlighted that negotiated settlements are increasingly used rather than prosecution in foreign bribery charges by the United States, United

Kingdom and other national authorities.

International anti-corruption standards have a common thread that finds its roots in the U.S. Foreign Corrupt Practices Act of 1977.

The U.K. Bribery Act of 2010 took the fight to the next level, becoming the toughest anticorruption legislation in the world.

The ISO 37001 standard, in turn, works as a sort of “soft law” that applies to all public bodies, large companies, SMEs and NGOs, and specifies policies, procedures, and controls reasonable and proportionate to the risks faced by any given organization.

Ganivet elaborated on the new French legal framework known as Sapin II, the main provisions of which he hopes will raise France to the highest standards in the fight against corruption. A new governmental agency, lʼAgence française anticorruption (AFA), has been set up and entrusted with investigative and reporting responsibilities as well as the duty of assessment and recommendation.

The French criminal code was already quite strict, punishing corrupt practices by up to ten years imprisonment, with fines of up to EUR 1 million and EUR 5 mln applied to private individuals and legal entities, respectively.

But the new law strengthens the existing French sanctions arsenal even further. Even foreign companies belonging to a French corporate group are under the scope of the legislation if certain thresholds are met.

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Budapest Business Journal | October 20 – November 2, 2017

Business

|9

The Future is Bright, the Future is Human For all the concerns prompted by the rise of artificial intelligence (AI) and the moral maze that seems to surround it, futurist Gerd Leonhard says he is optimistic about the future, provided mankind concentrates on its great advantage over machines; humanity itself, and emotional intelligence.

ROBIN MARSHALL

Leonard, one of the top 100 influencers in Europe, was the keynote speaker (via a Skype connection) at a jubilee event marking ten years of the Business Council for Sustainable Development in Hungary (BCSDH). The immediate future would bring “huge ethical challenges, but also huge opportunities”, he said.

The exponential growth of machines and machine learning is undoubtedly dramatic. It is also impossible for humankind to match, Leonard told delegates at the ÖbölHáz at Kopaszi gát on October 12. “We are inefficient ‘machines’. Technology is exponential, humans are not, and we should keep it that way.”

In a presentation littered with startling statistics, Leonard said that if the 1971 VW Beetle had developed at the same pace as computer processing, it would travel at 300,000 mph today. “We are now at the take off point of exponential change,” he said.

There are dangers, and perhaps the biggest is what we will allow ourselves to do with machines, hence the need for what he calls a “Digital Ethics Council”. Warning that “humanity will change more in the next

Winners and jury members for the first “For a Sustainable Future Prize”.

20 years

than in the last 300”, he posed a key question: “Who is going to decide what is right and what is wrong, because machines will make anything possible. […] Technology has no ethics; it never has, and it probably never will. It is ethically neutral.”

Narrow Intelligence While he believes medical advances might well extend our lives to around 150 years, it is our most intangible asset that is our greatest, he said. “Machines do not think like we do. They think like machines, and they are very good at it, but it is a narrow intelligence,” Leonard explained. “Anything that can be digitalized will be. That is not going to make us useless humans. Anything that cannot be digitalized becomes extremely powerful. […] Algorithms are not good at dealing with emotions,

Robots Produce Wall Paint in Bócsa

90%

of what we do is emotions.”

That key difference between man and machine was a point he kept coming back to. Noting that “data is the new oil, and AI is the new electricity”, he said technology and cognitive computing will make for an extremely powerful combination. They could, for example, simply make the top 1% even richer or, if the will is there, be used to help bridge poverty and socio-economic divides. “It is important to use these tools carefully.

Clearly, if we do not, then things will not end well for us.”

Insisting that: “All technologies should be designed with human values”,

Marking the tenth anniversary of the founding of the BCSDH, a new annual award was presented for the first time. The “For a Sustainable Future Prize”, was presented in three categories. established on the occasion of the 10th anniversary of BCSDH, was held. The winners of the Change Leader prize were: László Károlyi (Legrand) and Károly Kovács (environmental consulting firm BDL Kft.) Winners of the Leading Woman prize were: Kamilla Csomai (MAVIR), Andrea Istenesné Solti (Shell Hungary), Márta Pálfalvi (Heineken Hungary), and Mónika Vörös (Unilever Hungary). The best Business Solution prize was awarded to TESCO Globál Áruházak Zrt. for its “Not a single bite of food can be wasted” program, which is designed to reduce the amount of food waste.

and playfulness at its heart. “We have to focus on creativity, but not ban technology.” There is a long way to go, he said.

“Most governments are ten years behind the curve on these issues, and this is all coming up in the next five years. There are a lot of positive things here, but we need to create balance. […]

Tech will make the world a better place if we govern it properly. […] The future is better than we think; we have to give people more credit. We need to focus on that, and impacting politicians to make these decisions.”

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and

For a Sustainable Future Prize

BBJ_2519_bus.indd 9

he said humanity should always be valued above technology. “We should invest at least as much energy in people, in ourselves, as we do in technology. It will make us successful both in terms of personal and economic factors.” Of course, mankind must also invest heavily in technology, he said, but warned, “We should embrace technology, but not become it.”

Suggesting that “70% of our jobs in ten years’ time have not been invented yet”, he said the right kind of education would be vital, with emotional intelligence, intuition, imagination

Mihály Varga Minister for National Economy and Antal Szabó CEO of Poli-Farbe Vegyipari Kft. The small settlement of Bócsa (Bács-Kiskun county) saw the implementation of new modular paint production technology using HUF 926,190,000 granted under the Economic Development and Innovation Operational Program. The EU’s European Development Fund, and the Hungarian government provided funding in excess of HUF 445 million.

The main advantage of the industry 4.0 compliant development of Poli-Farbe Vegyipari Kft. (Poli-Farbe Chemicals Ltd.) is that it enables the production of larger volumes of wall paint in a shorter period, using less electric power while also reducing labor intensity per ton of paint produced, and increasing production volumes.

Some 30,000 tons of paint may be produced in one shift in the new production unit, which equals double the company’s pre-upgrade white paint capacity. The production hall housing the new robot technology, and the production line was built in late 2013, also using EU funding, this time of more than HUF 208 mln. The total value

of the investment thus exceeds HUF 1.13 billion.

Relying on its new capacities, Poli-Farbe can now also expand its exports. So far, the company has mostly sold its high quality Hungarian paint to neighboring countries like Romania, Serbia, and Slovakia where it has already built a reputation, but by upgrading the operation, Austria, Germany, and even Switzerland become realistic target markets.

In increasing its capacities, the aim of PoliFarbe is not simply to achieve market leadership in the domestic decorative paint market of about HUF 30-35 bln; it also plans to become a regional actor supplying the international markets. The investment will improve the competitiveness of high quality Hungarian paints in the world market.

Over the past three years exports have amounted to 4-5% of the annual sales of PoliFarbe. The company expects to boost growth by 20% over the next three years in the white, interior dispersion wall paint segment, given that the new modular wall paint plant is ideally equipped to produce custom made paints in line with quality standards in foreign markets.

Poli-Farbe currently employs 282 staff, and had a net turnover of HUF 10.232 bln in 2016, up on HUF 10.196 bln a year earlier. Operating profit amounted to HUF 781,218,000. In the last business year, Poli-Farbe produced 42,770 tons of paint for sale in the markets of Hungary, and six other European countries.

With their constantly improving sales statistics, white interior dispersion wall paints are a key factor in the company’s dynamic growth. About 20% of Poli-Farbe’s sales come from products relating to thermal insulation of façades.

2017. 10. 18. 19:04

10 | 2

Business

WHO’S NEWS

www.bbj.hu

Budapest Business Journal | October 20 – November 2, 2017

Do you know someone on the move? /// Send information to news@bbj.hu

LeasePlan Gains Commercial Director

László Rónai-Horst became the commercial director of LeasePlan’s Hungarian subsidiary this summer, taking up the post left vacant

by CEO Tímea Pesti when she was promoted in the spring.

He spent his childhood in Athens, and gained his college degree from the Budapest Business School and the University of Le Havre. He speaks English, French and Russian, in addition to Hungarian. Ten years of an active tennis career laid the foundations of a competitive spirit and ambitious attitude to new challenges.

Rónai-Horst believes that cars have an emotional charge for people, so it is important for the fleet management company to foster human relations, even with things as simple as handing over vehicles in person.

LeasePlan, one of the world’s largest fleet managers, recently signed a declaration stating that the entire fleet used by the company employees would be replaced with electric vehicles by 2021. LeasePlan employs 7200 people in 32 countries, and is responsible for the fleet management of 1.7 million vehicles.

HR Leader Joins PwC Hungary

Éva Bresztyenszky has returned from full-time parenting to lead PwC Hungary HR. She spent nearly ten years in various HR leadership roles at Morgan Stanley’s Budapest office.

During her tenure, the company experienced significant growth thanks to, among other things, developing relations with higher education institutions, optimizing selection processes, developing leaders, and improving employee satisfaction.

Before Morgan Stanley, Bresztyenszky (40) worked at Citibank’s HR department, including one year spent at the bank’s Milan branch. She considers launching Citibank’s Service Center as one of her major successes. She has been active in talent recruitment and development, as well as equal opportunity and diversity, and hopes to capitalize on her experience in these fields in her new role.

Bresztyenszky holds a bachelor’s degree in Tourism and Hotel Management from the College of Commerce, Catering and Tourism, and a master’s degree in Business Psychology from the Budapest University of Economic Sciences and Public Administration.

Hotel Manager Joins The Ritz-Carlton, Budapest The Ritz-Carlton, Budapest has announced the appointment of new hotel manager Kinga Engelbrecht, who will also fill the position of acting general manager until the GM’s

position is filled.

She will be responsible for strengthening The Ritz-Carlton brand in Hungary and also for making The Ritz-Carlton, Budapest the most attractive destination for international business and leisure travelers that attracts local audience as well, according to a press release sent to the Budapest Business Journal.

Engelbrecht has more than 15 years of experience in the hospitality industry, joining The Ritz Carlton, Budapest from The Loren at Pink Beach Resort, Bermuda, where she acted as GM. She has previously won the title of “Hotelier of the Year” and “Young Hotelier of the Year” in Hungary.

She has worked for market leading hotels, such as the New York Palace, Boscolo Budapest – Boscolo Residence (Marriott International, Autograph Collection) as GM, and was regional director and GM at the Mamaison Andrássy Hotel - Mamaison Residence Izabella (Mamaison Hotels & Residences).

“I feel honored to join The Ritz-Carlton, Budapest, it is such an exciting next step in my career to be part of the legendary customer service of the hotel,” Engelbrecht said.

“Budapest is such a vibrant city with unique possibilities, and I would like to bring light to that everywhere in the world, and work on that certain plus that The Ritz-Carlton brand represents in luxury hospitality,” she added.

CCCH Names Sales and Marketing Manager As of 2 October, Gabriella Szilágyi is the new sales and marketing manager of the Canadian Chamber of Commerce in Hungary.

Szilágyi has experience in event and client management from the hospitality industry. In the past 15 years, she has been working in various positions for Accor Hotels, Corinthia Hotels and also for countryside hotels like the Spirit Hotel Thermal Spa. In her new role, she is responsible for membership relations, also for the marketing and events activities of the CCCH.

ADVERTISEMENT

Continental Aims to Keep Motorists Rolling As we move toward the switch to winter tires, Continental Hungaria Kft. CEO Dániel Rábai looks at some of the issues around tire choice.

When it comes to tire choice, people often settle for the cheapest option.

Why might this be a bad idea?

Car owners often look at purchasing tires only as a necessary investment, but what they usually forget is that their decision has an impact on a surface with a size of four palms, where the wheels make contact with the asphalt. So, they must take into account other features as well, apart from the price.

The so called “cheapest option” today means buying imported tires from the Far East. It could also mean grey imported tires bought via the internet from unknown sources.

In the light of this, we recommend drivers focus on safety first, instead of worrying about their wallet. That means choosing tires with excellent grip and braking performance, but low rolling resistance is also an important feature. Car owners should not forget that with a good choice they ensure the safety of their loved ones.

According to the Vision Zero Initiative of

BBJ_2519_bus.indd 10

If we look at the trends we see that alternative powertrains might change the expectations of car producers regarding tires. For example, electric vehicles might need tires with a narrow tread width, while zero-emission cars must have tires with extreme low rolling resistance. We also know that tires for electric-powered vehicles will have a higher diameter.

Strong demand to develop intelligent tires represents a significant trend today. This means that the driver can receive actual information inside the car about the tire’s tread depth or temperature. At the IAA Frankfurt Motor Show, Continental introduced two technology concepts, ContiSense and ContiAdapt.

Dániel Rábai, CEO, Continental Hungaria Kft. Continental, we would like to decrease the number of fatal accidents on public roads to zero; we therefore consider car owners as our partners in reaching this target.

Is it possible to source sustainable tires?

Sustainable tires pose an important question at the moment. A lot of components can be recycled – for example, nowadays playgrounds are built on rubber sheets which are made from recycled tires.

This is one example of how used tires can start a second life. Another example is when granulates made from used tires are recycled into new tires (e.g., industrial or agricultural tires).

Beside this, Continental is working on sustainable tires under the Taraxagum project. Many years ago, our engineers discovered that rubber could be replaced with dandelion residue. We have produced the first test tires made from dandelion and they are still under endurance testing. The so-called Taraxagum tires might change the future of the tire segment, because tires could be produced without rubber from the rubber tree. In this way, the sector could save a huge amount in transport costs.

When it comes to tire development, what are the latest technologies and trends?

Drivers will soon have to consider switching to their winter tires. What should they look out for?

The best solution in winter conditions is the use of winter tires. When the external temperature permanently falls under 7ºC (45ºF), summer tires should be changed for winter tires. Within these conditions, roads can be icy and slippery; winter tires provide better grip and braking performance. Also, the rubber in the summer tires can become more rigid at lower temperatures.

In Hungary, due to the climate conditions, it is recommended to choose tires that perform excellently on wet and icy road surfaces. It is also a significant aspect that drivers should choose tires according to the performance of their car. Usually it is recommended to buy a slightly better tire than how the car performs in terms of speed and other attributes.

2017. 10. 18. 19:04

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

1st District

3rD District

4th District

7th District

13th District

15th District

50 sqm – 2 rooms, márvány street

50 sqm – 2 rooms, szél street

73 sqm – 3 rooms + HAll, szilAspAtAK line

100 sqm – 4 rooms, rottenbiller street

31 sqm – 1 room, visegrádi street

225 sqm – 7 rooms, pestújHely

This completely renovated, quiet apartment has private gas heating and it is situated within a nice period building, close to the MOM Park shopping centre.

In a quiet street, this park facing apartment, that needs renovation, benefits of separate rooms and bright kitchen. It is situated within a well maintained building.

In a new built building, this very well divided, sunny apartment has separate rooms and balcony. It is situated in the garden suburb area of the district.

This renovated, street facing apartment has separate rooms, sleeping gallery and private gas heating. It is situated within a building with renovated facade, close to the Rózsák Square.

This very bright, quiet apartment in good condition is situated within an elegant period building, close to the St. István Circuit.

This two storey family house, that needs renovation, built on 709 sqm of lot, has 2 bathrooms, 20 sqm of closed terrace and parking space in the courtyard. It is located in a quiet street.

34.900.000 HUF

20.900.000 HUF

32.500.000 HUF

42.900.000 HUF

21.900.000 HUF

57.900.000 HUF

+36.1.201.0403

1st District

+36.1.430.1403

3rD District

+36.1.782.7275

4th District

+36.1.351.0446

7th District

+36.1.788.1435

13th District

+36.70.398.8754

15th District

151 sqm – 5 rooms, AlAdár street

53 sqm – 2 ApArtments, ezüstHegy str.

107 sqm – 5 rooms, józseF AttilA str.

101 sqm – 2 rooms, doHány street

52 sqm – 2 rooms, visegrádi street

172 sqm – 5 rooms, ráKospAlotA

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

These two, completely renovated, very bright mansard apartments has room with open kitchen and sleeping gallery. It is situated within a building with common garden.

Next to the Újpest Synagogue, in a new building, this bright, duplex apartment has two bathrooms, balcony and private gas heating.

In the heart of the city, this very sunny and spacious apartment has balcony and it is situated within a nice period building.

This very sunny, garden facing apartment has private gas heating and it is situated within a renovated building with nice common garden.

This new built, two storey family house has 679 sqm of lot, two bathrooms, terrace, sauna, jacuzzi, 2 car garage and nice garden.

109.000.000 HUF

25.900.000 HUF

40.990.000 HUF

42.900.000 HUF

26.900.000 HUF

69.500.000 HUF

+36.1.201.0403

2nD District

+36.1.379.0506

3rD District

+36.1.782.7275

5th District

+36.70.3156.087

10th District

+36.1.788.1435

13th District

+36.70.398.8754

22nD District

140 sqm – 4 rooms, szemlőHegy street

48 sqm – 2 rooms, plAtán-liget sUbdivision

57 sqm – 2 rooms, molnár street

43 sqm – 2 rooms, HAlom lAne

46 sqm – 2 rooms, csAtA street

160 sqm – 4 rooms, lomnici street

Panorama over the Buda Hills, this renovated apartment has 2 entrances, 2 living rooms, 3 separate bedrooms, 2 kitchens, 2 bathrooms and 4 balconies. Within a villa house with garden.

Next to the Danube, in a new built subdivision with playground, this garden facing apartment in good condition benefits of separate rooms. It is located in a very quiet and green area.

Close to the Danube, this very bright apartment, that needs renovation, has private gas heating and benefits of a common rooftop terrace.

In a quiet area, this well divided, sunny apartment in good condition has separate rooms and bright kitchen. It is situated within a well maintained building.

In a new building, this bright apartment benefits of a living room with fully fitted open kitchen, bedroom, air conditioning system, terrace and 12 sqm of private garden. Price includes furniture.

Beautiful panorama over the city, this three storey semi-detached house, that needs renovation, has two bathrooms, balcony, 28 sqm of terrace, private garden and garage.

85.900.000 HUF

37.900.000 HUF

33.900.000 HUF

17.900.000 HUF

29.900.000 HUF

39.900.000 HUF

+36.1.336.1706

+36.70.669.53050

+36.1.336.1706

5th District

+36.1.780.8276

10th District

+36.70.455.8062

2nD District

3rD District

200 sqm – 6 rooms, szerénA street

68 sqm – 2 rooms, Folyondár street

73 sqm – 2 rooms, váci street

196 sqm – 7 rooms, KAdA street

71 sqm – 3 rooms, mArinA pArt

50 sqm – 2 rooms, AlAg

Breathtaking panorama over the Danube, this four storey apartment has 3 bathrooms, 3 terraces and 3 private garages. It is situated within a nice building with well kept common garden.

In a very green area, this well divided apartment, that needs renovation, has nice private garden, separate rooms and private gas heating.

In the pedestrian Váci Street, this duplex office has private gas heating and it is situated within a well maintained period building.

This completely renovated, spacious, two storey family house built on 320 sqm of lot and consists of 3 separate apartments at the moment.

It has a beautiful, well kept garden and garage.

Breathtaking panorama over the Danube, this high floor apartment has living room with open kitchen, bedroom, study and 14 sqm of terrace.

In a building with parking space and elevator.

This semi-detached house, that needs renovation, built on 517 sqm of lot, has garage and parking space in the courtyard.

110.000.000 HUF

42.900.000 HUF

39.000.000 HUF

66.900.000 HUF

74.900.000 HUF

17.800.000 HUF

+36.1.336.1706

2nD District

+36.1.430.1403

3rD District

+36.1.336.1706

6th District

+36.70.646.6818

12th District

13th District

+36.1.720.2433

+36.70.455.8062

14th District

Dunakeszi

+36.70.399.0399

Dunakeszi

276 sqm – 6 rooms, HársAljA street

121 sqm – 4 rooms, Keve street

83 sqm – 2 rooms, mozsár street

87 sqm – 4 rooms, KrisztinA circUit

52 sqm – 2 rooms, erzsébet Királyné str.

339 sqm – 6 rooms, révdűlő

This completely renovated, two storey family house built on 977 sqm of lot, has living room, 4 separate bedrooms, 3 bathrooms, 2 terraces, 2 car garage and wonderful garden.

This renovated, duplex apartment benefits of a fully fitted kitchen, fireplace, air conditioning system, 2 bathrooms, 2 balconies and terrace.

In a condominium with nice common garden.

Close to the Andrássy Boulevard, this sunny and very spacious apartment benefits of a private gas heating and it is situated within a beautiful period building with elevator.

Nice panorama over the Buda Castle, this spacious, high floor apartment, that needs renovation, has private gas heating, and it is situated within a building with elevator.

Close to the Danube Bank, this two storey family house built on 825 sqm of lot, has 2 living rooms, 3 bathrooms and 4 car garage.

130.000.000 HUF

64.900.000 HUF

This renovated duplex apartment benefits of a fully fitted kitchen and very nice, well kept private garden. Good connection to public transport.

45.900.000 HUF

39.900.000 HUF

17.900.000 HUF

64.900.000 HUF

+36.1.376.6080

2nD District

+36.70.669.5350

+36.1.789.2846

+36.70.642.7598

+36.70.399.0399

7th District

12th District

475 sqm – 8 rooms, HUnyAdi jános str.

117 sqm – 4 rooms, KossUtH l. rivers. res.

112 sqm – 4 rooms, ráKóczi street

126 sqm – 3 rooms, ignotUs street

51 sqm – 2 rooms, bAzsArózsA street

450 sqm – 11 rooms, nAgyKovácsi

Beautiful view over the Buda Hills, 2 separate apartments within a villa house with balconies, terraces, sauna and 5 car garage. It is located in a silent side street.

View over the Danube, in a new building with elevator, this very sunny and spacious apartment has living room with open kitchen, 3 separate bedrooms, 2 bathrooms, terrace and balcony.

This very sunny, street facing apartment in good condition has separate rooms, sleeping gallery and private gas heating. Good connection to public transport.

This completely renovated, very spacious apartment has nice view over the Városmajor Park, fully fitted kitchen and two bathrooms. It is situated within in a renovated building with elevator.

In a quiet side street, in a well maintained condominium with common garden, this sunny, street facing apartment has separate rooms and balcony.

In Pest County, in a quiet area, this two storey family house built on 935 sqm of lot, has private gas heating, 2 car garage and 3 parking spaces.

180.000.000 HUF

75.900.000 HUF

33.000.000 HUF

126.000.000 HUF

20.900.000 HUF

119.000.000 HUF

+36.1.376.6080

3rD District

+36.70.3156.087

+36.1.379.0506

+36.1.351.0446

+36.1.789.2846

14th District

+36.70.642.7598

nagykovácsi

+36.1.720.2433

each agency independently owned and operated. • these offers are valid, till the apartments are sold. • these information do not constitute a contractual element. tecnocasa_bbj_2017_10.indd 1

BBJ_2519_bus.indd 11

2017. 10. 16. 15:20

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Budapest Business Journal | October 20 – November 2, 2017

Special Report Telecoms

Compete and Develop: Telco Companies Finding Ways to Grow?14 The Faster the Better: Hungary’s 5G Coalition15 DIGI Building Market Position Despite Keeping Cards Close16

Hungary’s telcos are fighting hard to grow amid tight profit margins, yet all the while investing in the superfast 5G future BBJ_2519_special_report.indd 12

2017. 10. 18. 19:04

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Budapest Business Journal | October 20 – November 2, 2017

Special Report | 13

Vodafone’s Portable Mobile Network to the Rescue

Vodafone Hungary’s award winning Instant Network 3G has yet again been put to vital use in the aftermath of Hurricane Irma to facilitate communications on the ground.

LEVENTE HÖRÖMPÖLI-TÓTH

Communication in the immediate aftermath of a disaster is key both to supporting those affected and in assisting in the assessment of damage and the coordination of rescue and relief efforts.

That was the idea that drove specialists Csaba Pervai and Robert Tóth at Vodafone Magyarország to invent a prototype of a portable mobile network that became known as Instant Network.

A beefed-up version, Instant Network 3G, was unveiled in 2015 and it allows response teams and aid agencies to set up a free communication network within 40 minutes anywhere in the world. Due to its convenient size, it can be transported on commercial flights as well, so deploying it should not cause any logistics problems.

In such emergencies, the Vodafone Foundation deploys employee volunteers and communications technologies to restore and provide free, vital communications and technical support to aid agencies, victims and refugees in remote areas.

Vodafone Instant Network volunteers in the field.

Tried and Tested The most current project concerns helping out in relief efforts in the Caribbean after Hurricane Irma swept the region; however, the technology has been tested as many as ten times before under similarly harsh conditions.

During the severe drought in Kaikor, Kenya it was in use for 47 days, during which 12,000 free minutes were used by aid agencies and humanitarian call centers.

At the 2015 earthquakes in Nepal and in the Philippines after typhoon Haiyanʼs destruction in 2013, a total of 443,000 calls and 1.4 million text messages were registered on the network. Including the Philippines, Kenya and South Sudan, the device was engaged in 2.9 million calls.

The Instant Network 3G also came handy during the refugee crisis of 2015 in

Europe, too. In fact, Instant Charge units are still operating in two refugee camps in Greece, enabling thousands to charge their phones and

keeping

84,000 plus devices connected. Instant Charge was specially designed for the response to the refugee crisis and will be also used in disasters combined with free networks.

“It fills us with pride that with the Instant Network 3G solution, developed at Vodafone Hungary by our own engineers, we are able to help fellow human beings in areas hit by natural disasters anywhere in the world by relying on innovation and mobile technology,” says Amrita Gangotra, technology director of Vodafone Hungary.

“At Vodafone, we believe in innovating with technology. It is an integral part of our basic way of thinking, since it makes our lives not only easier but also safer.”

Professional support in such situations may well be the most significant benefit of the technology and know-how provided by us, she adds.

The Vodafone Foundation Instant Network team is also committed to developing new technologies to best support the humanitarian community.

Some 70 trained Vodafone employees make up the Instant Network team.

These volunteers remain on standby, ready to deploy in response to natural or humanitarian disasters. All volunteers out on the field complete Hostile Environment Awareness Training (HEAT) to ensure they are prepared to deploy under difficult circumstances.

Twenty Years of Internet in Hungary

With the launch of commercial internet services 20 years ago in Hungary, the Budapest Business Journal takes a look at how we moved from a snail’s pace to the verge of the 5G breakthrough.

LEVENTE HÖRÖMPÖLI-TÓTH

October 15, 1991 marks the day on which the first computer of the Hungarian Academy of Sciences logged on to the

BBJ_2519_special_report.indd 13

internet. This occasion, together with the set-up of the first local website, sztaki. hu, is known as the birth of the world wide web in Hungary. Yet, for years, the revolutionary technology was available only to the academic field; its commercial use didnʼt start until 1997.

When modem-based internet access was introduced by the predecessor of Magyar Telekom, Matáv, downloading one single megabyte took up to three minutes. ISDN connections doubled the speed, while the proliferation of ADSL brought download capacity of 384 kbit/sec − still just a fraction of today’s performance.

Another milestone came in 2005, when cable TV networks began providing broadband services. The first 5,000 customers gained access to the optical networks of Magyar Telekom, producing up to 25 Mbit/s download and 5 Mbit/s upload speed as early as December 2008.

Fast forward to 2017, and there is a whole new world out there. As far as landline internet access is concerned, certain providers like DIGI or Magyar Telekom offer speed of 1,000 Mbit/s, and others

such as UPC and Invitel go up to 500 Mbit/s and 250 Mbit/s, respectively.

Global Champions The mobile internet has undergone similarly spectacular stages of development. In fact, by now Hungary is among the global champions in this league.

Local users have the privilege of enjoying the third fastest 4G/LTE network in the whole world, according to the latest figures from wireless coverage mapping specialists OpenSignal. Average speed comes to 42.61 Mbps, which is by 2 Mbps better than the figure from just half a year ago.

It goes without saying that the beginnings were far humbler. WAP (wireless application protocol) embodied the embryonic stage of mobile internet back in 2001; however, its initial speed of 9.6 kbit/s meant a single mp3 file took more than an hour to download. MMS debuted in 2003 and the real breakthrough took place two years later with the introduction of 3G mobile networks.

Mobile service providers have been improving their services ever since.

Telenor’s indoor coverage in Budapest downtown went from 37.9% in early 2016 to 85% by the end of that year; nationwide rates of outdoor coverage range between 93.8% (Vodafone) and 98% (Telenor, Magyar Telekom), according to data published by portfolio.hu.

All this goes hand-in-hand with gearing up for 5G, which will provide ten times more robust capacity than now. As a matter of fact, at the end of last year, Ericsson and Magyar Telekom had already unveiled a development that is capable of mobile download speed of 1.2 Gbps.

This is very important as the emerging market of IoT, industry automation and most especially self-driving cars will require a seamless flow of real time data. Since 4.5G tech is scheduled to be available this year, and a 5G mobile test network is being set up in Zalaegerszeg to serve the test track for autonomous cars, local mobile service providers seem to be all geared up to master the 5G challenge, certainly in a manner worthy of commemorating the 20th anniversary of the commercial internet in Hungary.

2017. 10. 18. 19:04

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Special Report

www.bbj.hu

Budapest Business Journal | October 20 – November 2, 2017

Compete and Develop: Telco Companies Finding Ways to Grow

The telecommunications sector is famous for its procompetitive attitudes, which can be seen in the market’s shrinking prices in the past years. Great offers and creativity are needed to find ways to grow when the less than 10 million Hungarian citizens already possess more than 11 million SIM cards. ÁGNES VINKOVITS

While there are several millions of residential clients who speak little on their phone and pay late, as a market insider who wishing to remain anonymous explained to the Budapest Business Journal, business clients speak a lot and keep due dates. Therefore, business subscribers are much more precious for telco providers and so the competition on the telco market will increasingly focus on them, our source predicts.

At the same time, there is simply no room left to further lower prices, market players report. As such, new opportunities can be only found in providing convergent services, meaning that landlines, mobile phones and IT systems all come from the same supplier.

Magyar Telekom, as the descendent of the formerly state-owned monopoly Matáv, leads this market at the moment, but “Vodafone is on the rise with currently about a hundred clients with convergent services,” Vodafone Hungary’s communications director János Suba tells the BBJ. Meanwhile, the road to residential clients, especially to high value customers, leads mostly through mobile internet. The three biggest telecom companies, Telekom, Telenor and Vodafone, already offer limitless internet packages, as an increase in data traffic has already been a trend for a while.

Involving the clients’ family members in one package is another strategy.

Vodafone even offers a “Kid” prepaid package that enables the child to call their parents even when there is no money left on the account. “People love it,” Suba notes.

In addition to the race for subscribers, there is also a competition for workforce.

Hungary’s deepening labor shortage has not left the telco sector untouched,

BBJ_2519_special_report.indd 14

“We want to see a social gap as narrow as possible in the matter of internet access.” although market experts describe the situation as not being as dramatic as in other sectors. Still, it is not unusual for telcos to cooperate with universities and colleges to make sure they can find the best staff in time.

Engineering professionals are the most often sought for category. Employer branding also becomes of increased importance in order to retain workers. “We try to be attractive not only as a brand, but also as an employer,” Suba says, adding that Vodafone works using a mobile office system, meaning that no one has a fixed place to sit at in the big, spacious office, while home office work is also strongly supported at least one day a week.

Ahead of Regulation A market is regulated either from above, or spurred by the competition itself. In the telecom sector, it is usually the latter case, as market players typically have a procompetitive approach. This is clearly shown in, for example, the mandatory reduction of the length of loyalty contracts.

The regulation comes into effect just now, on October 24, but the changes it facilitates have already appeared on the market, as contracts without a loyalty

period have already been available.

Competition has forced sector players to stay attractive for their clients through lower rates and better services instead of legal ties.

Something similar applies to the elimination of roaming fees. Even before the European Union removed the extra charge for making phone calls to the mother country from any EU member state by June, most of the big telco companies already offered packages with very low roaming charges or, in the case of Vodafone, without any extra fee at all.

As such, Vodafone does not expect major changes in its regular business as a result of the EU decision, while Telekom also predicts only a slight increase in the amount of cross-border calls. At the same time Telenor, as it said in a previous interview, looks ahead to a rise not so much in the number of spoken minutes or sent messages, but in data traffic.

Increasing “Internet of Things” (IoT) services are also expected. IoT, referring to a network of devices that are connected to the internet, is hoped to make everyday life easier very soon.

“This is not 5G yet, but we are getting close,” Suba says when telling about a freezer that counts the number of ice creams being taken out of it, and so takes care of the new procurement automatically.

And while parking lots with an integrated SIM card and a sensor can already send data about whether the lot is free or not, in a few years’ time cars will also be able to park without anyone driving them. Vodafone is

objectively leading the worldwide IoT market, Suba says. “Due to our R&D, we have an advantage that is impossible to catch up with.” (For more about 5G and Hungary’s digital strategy, see our article “The Faster the Better: Hungary’s 5G Coalition on page 15.)

To make society ready for the changes, Vodafone created its vision called Gigabit Hungary. “The future will start around 2020,” Suba says explaining that by the end of the decade, data transformation capacity will allow users to send gigabits per second. In order to let everyone enjoy the benefits of such developments, the company cooperates with

25

schools,

mostly in disadvantaged regions such as Borsod or Csongrád County.

“We want to see a social gap as narrow as possible in the matter of internet access,” Suba explains. The 6,0007,000 kids involved in the program got tablets and training about safe internet usage and are now motivated to not only use Google and Facebook but to start generating creative content such as blogs and vlogs because ‘this is the future’.”

The BBJ contacted all five major players of the telecommunication sector, but as companies were very busy getting prepared for the new regulation coming into effect on October 24, only Vodafone was able to give us an interview. For this reason, the company may appear overrepresented in our article.

2017. 10. 18. 19:04

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The Faster the Better: Hungary’s 5G Coalition

Special Report | 15

INSIDE VIEW

INNOVATION

The new generation of wireless internet, 5G is around the corner. The system of super-fast data transfer is expected to be internationally spread by early next decade. Hungary aims to be at the forefront, but has to get prepared.

sponsored by

Insight

Attila Soltész, President of the Association for Informatics for Society (left) and Tamás Deutsch, the Prime Ministerial Commissioner responsible for the Digital Welfare Program, at the opening of the two-day Infotér conference at Anna Grand Hotel in Balatonfüred on October 18.

ÁGNES VINKOVITS The fifth generation of mobile internet, predicted to cover Europe in three years, will not simply be faster than the current 4G. It will also widen the usage spectrum of internet, not only meaning that operations can be done from thousands of kilometers distance as data is transferred without delay, but also that, sooner or later, we will live in smart cities where everything, from the irrigation systems in our parks to buses that count the number of passengers will be connected to the internet and permanently optimized.

Yet, to get there, strategies have to be built, infrastructure has to be developed and regulations have to be made. To say on schedule, the government initiated the 5G Coalition, which got under way in June and by now has 52 members representing a wide range of market players from the information and communication technology sector, the government and academics.

The coalition’s goal is to establish midand long-term strategies that will enable Hungary to make the most out of the upcoming development.

“Hungary has all the capability to be the first to take social and economic advantage of the 5G technology by the time it gets internationally spread in the early 2020s,” Prime Ministerial Commissioner for the Digital Welfare Program Tamás Deutsch told the Budapest Business Journal.

“We already have a good 4G infrastructure to build on.” The big global telecommunication companies are already here in the country, meaning that innovations and best practices can be simply imported, Deutsch says explaining his confidence.

Some, however, have their doubts. As one sector insider revealed to the BBJ, telco companies already work with a very low profit margin, since the big financial gains of the web lands with giants like Facebook and Google instead of the Internet providers, therefore it is questionable if the global companies will be in a hurry to spend money on infrastructural development.

Still, the government’s optimism has other roots, too. The fields that 5G is expected

BBJ_2519_special_report.indd 15

to reform and boost most are e-health and autonomous cars, and, as Deutsch point out, there is a strong automotive industry in Hungary. To fully exploit this, a test track for driverless cars is being built in Zalaegerszeg (some 230 km southwest of Budapest), and will be inaugurated next spring. There, the different market players can keep tabs on developments and take stock of the further demands.

Everyone Involved Automated and, as such, optimized systems of the future’s smart cities can save money, too, Deutsch points out, though initial investments are needed, he admits.

Untangle local tax paying, for example, simplifying parking systems or enhancing heating efficiency through smart grids can all reduce costs, Deutsch explains. Making calculations about the return is also among the responsibilities of the 5G Coalition.

It often happens with technological developments that the regulation cannot keep the pace with the innovations. In the case of 5G, first the international standards have to be laid down and the cross-border issues of frequencies, which are otherwise national resources, have to be discussed, Deutsch says. After this, national regulations have to be created. All this is expected to be done by the end of the decade and “we have started to get prepared in time.”

Yet, to take full advantage of 5G, society needs to have digital competencies. Without this, the boosted data transfer capacity and the expected increase of “Internet of Things” (IoT) services will widen the social gap instead of narrowing it.

Ongoing educational reform is a tool to provide kids with the necessary skills, while those no longer at school will be reached through the Digital Welfare Program.

In its framework, 1,500 laptops and tablets are spread countrywide to enable free of charge courses. “This is a must,” Deutsch says. “Having digital competencies decides whether I am my own lord, or I am vulnerable and technology is above me.”

The waiting is over: corporate startup program Telenor Accelerate is finally under way for the second time to offer five months of training to the best three selected applicants. Among them is Family Finances, which is not only developing a virtual wallet, but it also aims to improve financial awareness for adults and children alike by teaching them how to manage household money better.

As Family Finances cofounder Gábor Fodor Papp tells the Budapest Business Journal, the selection procedure was very transparent and smooth, and now they are enjoying all the benefits the program has to offer.

“The workshops have kicked off and we find them very nice,” he says. “You gain a comprehensive knowledge from finance to pitching, and you are taught by experts you are free to reach out to afterwards as well, which is really cool.”

The workshops also provide the opportunity for team members to catch up on core skills they may lack, or get familiar with areas regarding which so far only other team members have had deeper insight.

Working with the assigned mentors is a key element. Balázs Vinnai from Misys Digital Channels is the perfect match considering his expertise in B2B sales and banking software development. On the other hand, Péter Oszkó from Oxo Group will be able to share invaluable information on how to secure funding.

Such expert guidance will be needed, indeed, to accomplish the ambitious goals set by Family Finances. The business plan envisages growth both in B2B and in B2C, the latter greater initial significance to gain short-term market traction and validation.

Creating Loyalty

“Our B2B operation is more important in the longer run, but it also takes more time to build up,” Fodor adds. “The idea is to approach banks or telco companies and offer to customize our digital solution to their needs. In this way their clientele, including adults and kids alike, can start using it, which then should help turn them into long-term loyal customers.” The app should be ready for download by early next year.

Zoltán Takács, Telenor’s vicepresident in charge of innovation

points out, “Family Finances is a great business idea, but it also contributes to financial education, and thus the entire population can benefit.” As he adds, the team can profit from a newly structured startup program that will put a greater focus on the winning startup teams compared to last year.

The number of workshops was cut from 12 to eight, two mentors have been assigned to each team instead of one, just three teams were selected rather than the five of 2016 and the length of the program has been extended from three months to five.

“Our impression is that the overall level of standard has improved, teams were a lot more prepared and pitched better than last time,” Takács notes.

“A growing number of young people tend to decide to found a startup of their own and make ever bigger efforts to improve. We can see it during the workshops and it was apparent in the selection procedure as well. In fact, one of this year’s participants rehearsed their pitch to one of the selected teams in 2016, and they improved their performance greatly as a result. This shows that members of the local startup ecosystem are sharing good practice with one another, and in the end, everybody wins. Telenor Magyarország is pleased to be part of this process.”

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Photo: MTI/Tibor Illyés

Telenor Accelerate Holds Promise to Improve Financial Education

2017. 10. 18. 19:05

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Special Report

www.bbj.hu

Budapest Business Journal | October 20 – November 2, 2017

DIGI Building Market Position Despite Keeping Cards Close

service providers shall also be obliged to effect technical modifications to allow the customer to use devices with SIM cards of any provider.

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

A Struggle for Mastery

LEVENTE HÖRÖMPÖLI-TÓTH

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

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

DIGI acquired mobile frequencies in two chunks in September 2015 and June 2016, respectively, for a total of HUF 10.248 billion, and so it

now owns

5%

of the mobile frequencies in Hungary. But the market was kept in the dark for a long time about how and for what purpose the company would use its new assets.

Now that a concrete launch date is inching closer, the BBJ had hoped to gain an insight into whether the abovementioned claims concerning the restricted scope of the mobile service

Telecom

/// briefs

MTel to lay off 350 Staff, Raise Wages

Magyar Telekom (MTel) announced on October 4 that it would lay off 350 employees under an agreement reached with trade unions on a headcount reduction and wage increase for 2018, reported mfor. hu. A further 160 employees are expected to be laid off as a result of a number of discontinued corporate projects, MTel said.

Most of the layoffs are expected to take place from the end of 2017, it added. The telco said it will help laid off employees find a new job through training and counselling.

MTel estimated severance pay for staff made redundant would reach HUF 2.8 billion, most of which will be accounted in Q4 2017.

Salaries will rise by an average 5% from the start of 2018, the company added. The net effect of the measures is expected to keep payroll costs flat in 2018.

BBJ_2519_special_report.indd 16

‘SzívCity’ Mobile app to Save Heart Attack Victims Hungary’s National Ambulance Service (OMSZ) has partnered with software developer Alerant Informatikai Zrt., the local charity of the Order of Malta and the Hungarian Resuscitation Society to create a mobile application that sends alerts to people who may be able to help heart attack victims on the street before paramedics arrive, reported origo.hu. The app, dubbed SzívCity, “Heart City” in English, has been downloaded more than 5,000 times. When emergency operators get a call about a possible heart attack victim on the street, they dispatch an ambulance and send the location of the victim to the app. The app alerts registered volunteers within a 500-meter radius of the victim, giving them a chance to start

were correct, and if so, how customers would be lured into migrating to DIGI in spite of all those technologyand geography-related limitations.

Sadly, however, our questions were unanswered.

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

According to the new legislation, any fixed-term retail subscriptions not involving the purchase of a handset may include a maximum loyalty period of 12 months instead of the current 24 months.

And upon the expiry of that period,

CPR even before the ambulance arrives.

State Secretary for Health Zoltán ÓnódiSzűcs said the app, believed to be unique in Europe, is an exemplary product of cooperation between the civil and state sectors. He added that the odds of a heart attack victim surviving are greatly increased if somebody starts CPR before the arrival of the paramedics. “The idea is that the more people register, the more lives can be saved,” said the head of the Order of Malta. The app works only in Budapest at present, but a country-wide rollout is expected by yearend or early next year, Péter Domokos of Alerant Informatikai said.

Vodafone Hungary to Appoint new CEO Alexandre Froment-Curtil, the CEO of the local unit of mobile telecommunications service provider Vodafone Magyarország, will be leaving Hungary to become the CEO of Vodafone Egypt in January 2018, the company said on October 11, according to a report on vg.hu. FromentCurtil has been working for the Hungarian subsidiary of Vodafone for five years, first as deputy-CEO, and was appointed

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

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

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

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

“We are awaiting the approval of the competition authority and the deal should

close in

Q1

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

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

CEO last year. Vodafone has started the process of selecting his successor. Under his leadership, Vodafone has achieved outstanding customer satisfaction and its performance has improved on the domestic market, vg.hu said.

Vodafone launches ‘Digital Welfare’ internet package

Vodafone Magyarország launched a government-initiated internet service package tailored for people who, due to financial reasons, still have no access to the internet, reported napi.hu. Vodafone is offering subscribers of the package 1 GB of data a month for just HUF 1,113, said deputy-CEO Gergő J. Budai. When the VAT rate on internet service is cut to 5% from the start of next year, the package price will drop to HUF 990, he added.

Tamás Deutsch, the Prime Minister’s Commissioner for the Digital Welfare Program, said 14 of Hungary’s 20 telcos had already successfully applied to offer subscriber packages under the Digital Welfare Program. The new clients will be able to use Vodafone’s 4G and 4G+ services.

2017. 10. 18. 19:05

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Budapest Business Journal | October 20 – November 2, 2017

In the past three decades, generations of digital natives have grown up, for whom being online constantly is as instinctive as breathing air. This new way of living seems to change some aspects of human relationships more rapidly, while it also keeps IT developers constantly inspired about how to take advantage of and where to lead these recent personality traits. ÁGNES VINKOVITS Having an electronic gadget permanently stuck to the hand is just one visible element of the psychological and social changes the Y and Z generations (people born between 1980-1995 and 1996-2007) have brought to the fore.

Experts agree that the most obvious outcome of the huge data dump of information surrounding us is the demand for speed. In his book entitled “The Business of Good”, social entrepreneur and writer Jason Haber even says that patience is simply not coded into the DNA of those born after 1980.

Annamária Tari, a psychologist specialized in Gens Y and Z agrees.

Those who were socialized in the age of internet become irritated if a page does not load quickly enough, or a message is not replied to immediately, and even have a measurably higher pulse if their phone runs out of battery charge, she says.

“If I am impatient and want immediate reactions in the online space, sooner or later this will diffuse into my offline life, too,” she notes adding that how we find and keep up relationships are affected first and foremost.

As a symbol of this hunger for speed and availability, Tinder is on the road of extreme success. The dating app that asks users to indicate whether they are up for a chat and a meeting or not based on seeing each other’s profile pictures now has more than

50 million users,

yet it is widely criticized for bringing only physical attributes into focus and not exactly being a nest for well-established relationships.

Tinder’s Hungarian counterpart, Lili Fox, puts more emphasis on personality, while still being playful. To be matched up and be able to start a chat, people have to guess each other’s interests.

Experts say the need to avoid a feeling of separation or being unheard is another clear characteristic of those born in the past couple of decades.

BBJ_2519_special_report.indd 17

INSIDE VIEW

Future gazing for the legal industry long time. Now it has become a matter of pure business strategy – and changing times affect corporate culture and HR priorities. Future-gazing legal services providers should put more emphasis on training, coaching and even promoting young experts to management positions.

Law firms may even want to consider employing an in-house “future gazer” who might give a valuable insight into the coming trends.

Dóra Petrányi

Márton Domokos

Partner, CEE Managing Director, Head of TMC

Senior Counsel, TMC

Future gazing has always been important in the technology, media and communications (TMC) sector, and now it has reached legal services too. In the 2000s, the rise of the internet and the rapid success of e-commerce boosted almost every industry worldwide. By now, every company has to be a tech company in order to remain successful. This applies not only to the companies but to legal professionals as well.

Clear Characteristic Yet, both attitudes support easy connection; experts say the need to avoid a feeling of separation or being unheard is another clear characteristic of those born in the past couple of decades.

The demand of being permanently available and visible goes hand-in-hand with a thirst for interactivity and usercustomized services. Even search engines now make sure we do not need to look at information that does not fully interest us .

The example of Sopreso, however, shows that while interactivity is clearly popular among users, it can be a headache for providers. The Hungarian startup kicked off in 2013 with the idea of offering a social presentation software (hence the name) that involves the audience by enabling them to comment, rate and browse between slides via an application, while actually sitting at the presentation.

However much fun it might sound to spice up long presentations with the possibility of permanent feedback to inspire the speaker to fully tailor the content to the audience, the initiative did not get the expected financial results and finally faded away about two years ago.

“The business model did not work out,” Máté Wohlmuth, co-founder of Sopreso tells the Budapest Business Journal, explaining that while presenters were supposed to pay for the application, they were not too keen on that type of interactivity.

“We spoke to many presenters who still measure the audience’s engagement by the persistency of eye contact,” says Wohlmuth.

Some 90% of human communication is said to be non-verbal, he notes. “It is no surprise that the biggest deals are still not made on skype, but people catch a flight.”

THE LAW OF THE FUTURE AND THE FUTURE OF LAW It all started with TMC lawyers having to build on existing regulations when supporting innovation. This is why we always loved this practice – you had a chance to contribute to forming the law of the future.

Now it is time for legal professionals to develop the future of the law: to focus on developing, deploying, and investing in new technologies and processes to transform their practice, in order to address clients’ increased expectations in quality and responsiveness in all legal areas.

For example, advanced machine-learning and data visualization technologies are faster and more accurate than human review. Their use allows legal departments to make better use of their resources by replacing lengthy physical document discovery processes and unstructured data analysis. The speed and efficiency of document review enable assessing critical information more quickly, and facilitate early and better-informed decision making in dispute resolutions, for instance.

JPMorgan’s contract intelligence program is consuming approximately 360,000 hours of work each year by interpreting commercialloan agreements. The U.K.’s Serious Fraud Office (SFO) is using AI to automatically read, interpret and summarize key information from documents reviewed in bribery investigations.

Smart contracts are also helpful in automating business relationships. They are tamper-proof and pre-programmed for the signing procedure, dramatically decreasing the number of business hiccups during contracting. The time of the techsavvy lawyers has come, and the firms with the deepest technical knowledge and combination of skills will become forerunners of the profession.

THE HUMAN FACTOR Foretelling the future was attributed to Hollywood studios and sci-fi writers for a

DISRUPTION OR INNOVATION? Innovations that create new markets and displace established marketleading service providers are frequently stigmatized as being “disruptive”. Indeed, these technologies sometimes may use loopholes and create uneven playing fields to find alternative – but often more customer-friendly – solutions. Whilst it is more comfortable to label certain technologies disruptive, real future gazers agree that technologies can backfire only in the hands of unprepared decision makers. New technologies definitely demand a different kind of mentality from market players who want to keep up.

BUSY BUZZWORDS VR/AR, ICO, IoT: buzzwords are tending to dominate business jargon again.

They are as vivid a part of almost every presentation as “convergence” was ten years ago. That word was literally everywhere but the expression lost its dynamic. To avoid sharing its fate, companies must not only use buzzwords to impress clients but utilize their actual meaning effectively in legal tech.

STRATEGIES AND OUTCOMES FOR THE LEGAL INDUSTRY The definition of “risk” has definitely changed. “Risk” used to mean doing something new or adopting a new technology. Now, “risk” means standing still and being overtaken.

Legal professionals need to embrace technology-led innovation, no matter how different it may be, and set themselves up to be agile and able to respond to changing market conditions.

There are exciting technological advances in both the business and legal world, which is not only enhancing the ways legal departments work, but also importantly improving the way law firms deliver services to clients. Some people even regard them as a way of making lawyers unnecessary, as a paperbacked memory of the past. They may be wrong.

Technology goes hand in hand with the legal profession and empowers it, rather than making it redundant. Lawyers and IT professionals should team up more effectively than ever, as it is essential for both professions to gaze into the future.

That will provide a “win” for both.

cms.law

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Generational Development and the Internet

Special Report | 17

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Special Report

www.bbj.hu

Budapest Business Journal | October 20 – November 2, 2017

Telecommunications equipment manufacturers Ranked by total net revenue (HUF mln) in 2016

yeaR establisHed

otHeR teleCom and netWoRk equipment

no. oF Full-time employees on July 1, 2017

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analog pHones

tRi-band mobile pHones

dual band mobile pHones

Company Website

total net Revenue in 2016 (HuF mln)

Rank

types oF equipment

oWneRsHip (%) HungaRian non-HungaRian

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone Fax email

1989

– Samsung Electronics Co. (100)

Hwanseog Choi Brendan Kim Gerda Witsch

1138 Budapest, Dunavirág utca 2.

(1) 453-1100 (1) 453-1103 –

péter tálos – –

2900 Komárom, Bánki Donát utca 1.

(34) 886-069 (34) 886-173 szekesfehervar@ emea.foxconn.com

1

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303,556

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22

2007

– FOXTEQ Integration Inc. (100)

3

lg eleCtRoniCs magyaR kFt.

85,073

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–

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–

–

–

–

–

–

–

–

–

–

–

76

1992

– LG Electronics Europe Holding B.V. (100)

Hwang dae minbum seop lee – –

1097 Budapest, Könyves Kálmán körút 3/A (1) 455-6060 (1) 455-6066 –

2005

– Huawei Cooperatief U. A. (100)

Hui Chun – –

1138 Budapest, Népfürdő utca 22/A (1) 555-2300 (1) 555-8989 hungary@huawei.com

1990

– Telefonaktiebolaget LM Ericsson (100)

gábor Éry – –

1097 Budapest, Könyves Kálmán körút 11/B (1) 437-7100 (1) 437-7467 –

2006

– Nokia Solutions and Networks B.V. (100)

lubomir soska, erzsébet tóth, béla Zagyva – –

1083 Budapest, Bókay János utca 36-42.

– – –

lajos veres, edit Hontiné Cserháti – –

1142 Budapest, Ungvár utca 64–66.

(1) 814-6424 (1) 321-8202 eszter.nagy@ emea.nec.com

4

www.samsung.com

www.foxconn.hu

www.lg.hu

HuaWei teCHnologies HungaRy HíRadásteCHnikai kFt.

609,915

52,039

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Tablets

–

1819

260

www.huawei.com

5

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6

nokia solutions and netWoRks kFt.

7

neC easteRn euRope kFt.

8,457

–

–

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28

2002

– NEC Europe Ltd. (100)

8

avaya magyaRoRsZág kFt.

6,916

–

–

–

–

–

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–

✓

–

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111

1990

– Sierra Communications International LLC (99.99), AVAYA Emea Ltd. (0.01)

andrás turai, györgy gombár – –

1062 Budapest, Váci út 1–3.

(1) 238-8200 (1) 359-0583 –

9

alCatel-luCent magyaRoRsZág kFt.

3,008

–

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15

1990

– Alcatel-Lucent Participations S.A. (100)

kálmán topor – –

1116 Budapest, Bókay János utca 36-42.

(1) 209-9500 (1) 209-9599 info@alcatel-lucent.hu

46

1997

– Cisco Systems Inc. (Ÿ), Cisco Systems Management B.V. (Ÿ)

evan sloves, péter Hajdu – –

1123 Budapest, Csörsz utca 45.

(1) 225-4600 (1) 225-4611 –

22

2006

Zoltán Havasi (100) –

Zoltán Havasi Norbert Szabó –

1152 Budapest, Telek utca 7–9.

(1) 271-1141 – info@mohanet.com

2010

– Panasonic Marketing Europe GmbH (100)

takashi Furumoto – –

1117 Budapest, Neumann János utca 1.

(1) 382-6060 (1) 382-6066 –

www.ericsson.com

–

www.nec.com

www.avaya.com

www.alcatel-lucent.com

10

CisCo systems magyaRoRsZág kFt.

11

moHanet mobilsystems ZRt.

www.cisco.hu

www.mohanet.hu

panasoniC maRketing euRope gmbH soutH-east NR euRope Fióktelep www.panasonic.com

BBJ_2519_special_report.indd 18

47,017

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32

2017. 10. 18. 19:05

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Budapest Business Journal | October 20 – November 2, 2017

Special Report | 19

Internet service providers yeaR establisHed no. oF Full-time employees on aug. 1, 2017

4

oWneRsHip (%) HungaRian non-HungaRian

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone Fax email

✓

1991 9,226 (June 30, 2016)

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

Christopher mattheisen János Szabó –

1013 Budapest, Krisztina körút 55.

(1) 458-0000 – –

– Telenor Mobil Communications AS (100)

alexandra Reich Zoltán Hasulyó Petra Stangl

2045 Törökbálint, Pannon út 1.

(1) 464-6000 (1) 464-6100 –

4g

vodaFone magyaRoRszág mobil távközlési zRt.

mobile

3

miCRoWave

148,705

adsl

telenoR magyaRoRszág zRt.

Cable

2

leased line

602,651

5,390,000 (June 30, 2016)

Company Website

means oF aCCess

modem

total no. oF subsCRibeRs on aug. 1, 2017

1

magyaR telekom nyRt.

Rank

total net Revenue in 2016 (HuF mln)

Ranked by total net revenue (HUF mln) in 2016

✓

✓

✓

✓

–

3,500,000

✓

–

–

–

–

✓

✓

1993 1,130

147,507

Ÿ

✓

✓

✓

–

✓

✓

✓

1999 1,761

– Vodafone Europe B.V. (100)

alexandre Froment-Curtil David Garcia Anita Carra

1095 Budapest, Lechner Ödön fasor 6.

(1) 288-4288 (1) 288-3200 –

upC magyaRoRszág kFt.

66,570

Ÿ

–

✓

✓

✓

–

–

✓

1994 1,014

– UPC CEE Holding B.V. (100)

Robert Redeleanu Ádám Jakabos –

1095 Budapest, Soroksári út 30–34.

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

5

digi távközlési és szolgáltató kFt.

42,769

Ÿ

✓

✓

✓

–

–

✓

–

1996 1,621

– RCS&RDS S.A. (100)

ungureanu Florin, Ryszka sambor – –

1134 Budapest, Váci út 35.

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

6

invitel távközlési zRt.

36,057

Ÿ

✓

✓

✓

✓

✓

✓

✓

1995 620

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

david blunck, marianne langsteiner Gerald Grace István Iski

2040 Budaörs, Edison utca 4.

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

7

gts HungaRy kFt.

9,828

Ÿ

–

✓

–

✓

✓

–

–

1993 5

Magyar Telekom Nyrt.

(100) –

gergely árvai – –

2040 Budaörs, Ipartelep utca 13–15.

(1) 814-4000 (1) 814-4047 info@gts.hu

8

netFone teleCom kFt.

1,157

135

–

–

–

✓

–

–

–

2012 44

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

zsolt Wilhelm Zsolt Wilhelm Lajos Varga

4400 Nyíregyháza, Tiszavasvári út 35/A (1) 878-1814 (1) 325-5675 info@netfone.hu

9

aCe teleCom kFt.

1,103

Ÿ

–

✓

✓

–

✓

–

–

1997 47

Individuals (68), ThreeF Kft. (32) –

attila Farmosi, gábor varga Gábor Varga Viktória Krall

1037 Budapest, Zay utca 3.

(1) 437-0590 (1) 437-0599 office@acetelecom.hu

10

dRávanet zRt.

Pallas Office Kft. (81), other (19) –

zsombor papp Rezső Dunay Csaba Csizmadia

7624 Pécs, Budai Nagy Antal utca 1.

(40) 811-118 (1) 890-0891 info@dravanet.hu

11

eQnet inFokommunikáCiós zRt.

12

noRdtelekom nyRt.

www.telekom.hu

www.telenor.hu

www.vodafone.hu

www.upc.hu

www.digi.hu

www.invitel.hu

www.gts.hu

www.netfone.hu

www.acetelecom.hu

www.dravanet.hu

www.eqnet.hu

www.nordtelekom.hu

Ÿ= would not disclose, NR = not ranked, NA = not applicable

BBJ_2519_special_report.indd 19

✓

339

6,916

–

✓

–

✓

–

–

–

1996 10

94 (2015)

Ÿ

✓

✓

–

✓

✓

–

–

1999 1

Ÿ Ÿ

tamás graur – –

2000 Szentendre, Egres út 37.

(1) 465-7800 (1) 465-7899 info@eqnet.hu

✓

2009 4

BELTÁV Vagyonkezelő Kft. (76.58), other (23.42) –

mihály gácsi – –

1074 Budapest, Dohány utca 12–14.

(1) 492-0000 (1) 267-6114 info@nordtelekom.hu

58

Ÿ

–

✓

–

✓

✓

✓

This list was compiled from responses to questionnaires received by October 17, 2017 and publicly available data. Data is based on companies’ own data revelations. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

2017. 10. 18. 19:05

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Budapest Business Journal | October 20 – November 2, 2017

Over-ordering Authenticity in Budapest David Holzer follows his nose to find a statue of a Basset Hound and Columbo. Oh, and just one more thing…

If I hadn’t followed my nose to Bulcsú étkezde, the restaurant on Bulcsú utca recommended to me by Gábor Bánfalvi of Taste Hungary, I’d never have found the place. Despite the mouthwatering aromas, I was too early and had an hour to dispose of before Bulcsú étkezde opened at 11 a.m.

I strolled past Lehel téri market, its faded yellow tiers looking like giant window boxes, and headed down towards the Danube.

The streets around Lehel are lined with faceless apartment blocks and dotted with tanning shops, a puzzling number of opticians and plenty of nondescript bars and cafes. I did manage to discover the funky-looking No Comment hiphop bar, the Kenguru fitness center and Picante, a Hungarian-Portuguese fusion restaurant. That’s a combination to conjure with.

When I got closer to Pozsonyi utca, which runs parallel with the Danube, the feel of the neighborhood began to change. This area is known as Angyalföld, which means “Land of Angels” and it certainly feels strangely prelapsarian. Perhaps it’s because you can glimpse the trees of Margitsziget and the green hills above Buda between the peeling-stucco early 20th century mansion blocks.

If you’re looking for paleo cupcake shops, health food stores or organic baby clothing and darn good coffee, Pozsonyi utca is for you. I was on a mission to find something rather more authentic.

Ignoring the charms of joints like The Donut Factory with its bright purple façade, I headed for Szent István utca which runs down to Margit hid.

Walking back up Szent István utca away from the river I noticed a statue of a man in a raincoat with another of a droopy-eared Basset Hound nearby, looking up at him. On much closer inspection, this was revealed to be a statue of Columbo, the famously brilliant and rumpled TV detective played by Peter Falk.

Why Columbo?

It doesn’t take remarkable powers of deduction to establish that the statue of Peter Falk is on the corner of Falk Miksa

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Photos: Peter Zsolnai

DAVID HOLZER

utca because of the Falk connection. But this still doesn’t explain why it’s there.

A little way up leafy Falk Miksa utca is the MissionArt Galeria. Here, a charming Hungarian woman told me as much of the story as anyone knows.

Miksa Falk, after whom the street is named, was a 19th-century Hungarian journalist and politician. According to the organizers of a project to rejuvenate the area around the street back in 2014, Peter Falk, who apparently did have Hungarian ancestors, may have been related to Miksa, but no-one knows for sure. Although the connection is tenuous at best, the powers that be in Budapest decided it was good enough reason to spend around USD 60,000 on the statue.

I assume that, at this price, the dog was

thrown in too. Whether it’s deliberate or not, the statue does make Columbo look very like a Hungarian politician.

Incidentally, the Basset Hound gazing adoringly up at Columbo is based on a local dog named Franzi who, legend has it, appeared for the unveiling of his own statue.

back purple-grey hair and a boozeblossomed face inside.

The queue was a good sign. I was sure I was in for a truly authentic Hungarian culinary experience. Inside the restaurant, my sense of anticipation rose as my taste buds and stomach began to wake up. The décor was plain to the point of boring. Always a good sign.

That day’s menu was chalked up on four blackboards along one wall and behind the counter.

But when I scanned the blackboards, I realized I’d made a tactical error. It was as if I was reading hieroglyphics. I couldn’t understand a single word.

In restaurants in other cities where I didn’t speak the language, I’d simply have pointed at what someone else was eating and indicated that I’d have the same. By now, the old man’s tureen had been filled and purple-hair was sitting down to a bowl brimful with gulyás but I hadn’t gone on my pilgrimage to settle for goulash. The problem was that I had nothing else to point at. This wasn’t fast food.

Feeling both foolish and desperate, I asked the queue “Does anyone speak English?”

A woman standing behind me who looked like a librarian said “I do. A little.”

“What should I eat?” I said.

“It’s all good. Very Hungarian.”

“Great. What would you recommend?”

She looked embarrassed. “Um, my English is not that good. I can’t translate. But it’s all good…”

“And very Hungarian,” I added for her.

She smiled. “Yes. Very Hungarian.”

I thought about just pointing to something on one of the blackboards and hoping for the best but what if I accidentally ordered something terrible?

Some Hungarian dishes are definitely an acquired taste, especially if they involve tejföl (sour cream).

I have a theory that there’s always something about the national cuisine of a particular country its natives adore but expats turn their noses up at it. In my case, it’s tejföl. If my Hungarian partner could bathe in it, I’m sure she would.

After shifting from one foot to the other for what felt like an eternity, I decided to head for the door.

“I’ll come back another day,” I said to my new friend.

She gave me a sad smile and stepped forward to take my place in the queue.

Back to Bulcsú Étkezde I could smell cooking, most pungently cabbage, well before I turned the corner back into Bulcsú utca. As I arrived, the restaurant door opened. I followed a small queue headed by an old man with a dented stainless-steel soup tureen dangling from the fingers of one hand and a not quite so old dude with slicked

Bulcsú étkezde is at Bulcsú utca 8.

It’s open from 11 a.m. to 3 p.m. every weekday but closed at weekends. I’m sure the food is fantastic but if you don’t speak Hungarian, take a friend with you when you go. This is what I’ll be doing.

2017. 10. 18. 19:04

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Tapping Into the German new Wave in Villány

While Swabian German settlers played a huge role in establishing quality winemaking in Villány centuries ago and their descendants, such as Gere and Bock, still rule the roost today, there’s a new wave of German settlers bringing new energy to Hungary’s most famous red wine region. In fact, a couple of them are showing that Villány can also produce high quality white wines.

ROB SMYTH

Horst Hummel splits his time between Berlin, where he is a lawyer, and Villány where he transforms into a vintner who pushes the boundaries big time. Hummel, whose great grandfather was a winemaker in what is now northern Serbia, has a thing for Hárslevelű.

He first tasted wine made from the grape from the famous Bock winery, which incidentally is almost opposite the charmingly old world building ADVERTISEMENT

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that houses Weingut Hummel on Batthyány utca, and was blown away by the potential of the grape. “I tried to make a fresh, reductive wine from it, but then I realized that Hárslevelű was made for skin contact. It is a red wine among the whites,” he says.

While so-called ‘orange wines’ are gaining huge traction on the international stage and are very much the flavor of the month, Hummel is staggered at how few Hungarian white grapes are vinified via skin contact.

Hummel’s Bernsteiner Hárslevelű 2015 is made with five days skin contact, so could be described as ‘orange light’ – as skin contact can last for weeks, though everything tends to labelled under the same umbrella. It is bottled with just 30 mg/l of sulfur and fermented and aged in Burgundian barrique barrels.

For Fanatics The only difference between this and the Hárslevelű 2015 is that the Bernsteiner is made in oak while the regular only sees stainless steel.

Both are must tries for Hárs fanatics.

Hummel ramped up the skin contact for his Góré Hárslevelű 2015 (see review below).

The German vintner, who fell in love with Villány when he walked through the streets and smelt the fermenting wine in the air, adds that before the phylloxera louse devastated vineyards in the late

19th century,

it was Furmint that was the number one grape in Siklós, which was Villány’s traditionally white wine (but now increasingly red-oriented) sub region.

Susann Hanauer studied law at the same German university (Tübingen) as Hummel but they didn’t meet, despite being there at the same time (she started as he was winding down) until their paths crossed in Villány when she and her husband Ralf Wassmann, a trained winemaker who worked for years as a beverage scientist, went to the region to pursue

their dream of owning a winery. The couple own and run the Wassman winery and are fully biodynamic (certified by Demeter). They were initially intrigued by legendary wine writer Hugh Johnson’s comments that the best Portugieser is to be found in Villány. The couple even have a traditional method Portugieser, which came into being not through the couple’s intention but rather through the intervention of Mother Nature.

“There was a lot of rain at the beginning of September; the water went into the berries as the skins were split. We had to pick immediately,” recalls Wassman. Morizz 2014 Rosé Brut Nature is 100% Portugieser and has a tasty touch of yeastiness to compliment the sour cherry notes, while the bubbles are good and persistent.

Scintillating Stuff I was eagerly waiting to try Wassmann’s red Portugieser, but the scintillating stuff has been so popular it has already sold out. Usually considered a simple, straightforward grape that makes light, quaffable reds that hit the market just weeks after harvest and plug the gap while the big boy red grapes get their vinous act together, the Wassmanns have shown that all grapes are capable of greatness when given sufficient tender loving care.

Their great friend, Hummel, is also a deft exponent of the Portugieser art, and it is a great experience to taste his range.

Both Hummel and Wassman wines are available at the Terroir Club.

Some of the best crafted and most exciting red wines from Villány come from the German-Swiss owned Heumann winery, which is located in Siklós, though they have a tasting cellar on Villány’s high street.

Erhard Heumann, who describes himself as “Bavarian and not German”,

says that the higher limestone content in the soils around Siklós lends vibrant acidity to bring freshness to the concentrated wines.

Hummel Góré Hárslevelű 2015 Kept on the skins for a whopping three weeks, it has intense aromas of crème brûlée, dried apricot, orange peel, coffee, honey, and ginger. The concentration continues on the palate without the slightest trace of bitterness from the prolonged skin contact, although the tannins from the maceration bring delicious mouthfeel.

Full-bodied with incredible length and complexity, lots of everything without anything nasty sticking out. A master among orange wines anywhere, and very much a benchmark example for the fledgling Hungarian orange wine movement.

HUF 7,000 Ft from Terroir Club, HUF 7,650 from Bortársásag.

Wassmann Olaszrizling 2014 Varietally pure with some complexity to boot. Subtly floral and fragrant on the nose with lemon zest, apple and pear aromas, with a touch of hazelnut.

Only made in stainless steel and while not particularly muscular in terms of body, it does have a pleasantly waxy texture. It is also delightfully airy and slips down a treat, though it also has surprising length. Soft and smooth on the palate with the acidity nicely integrated with the fruit (a lot of 2014 wines suffered from sharp acidity and underripeness). Very low sulfur of 24 mg/l but it is showing no signs of the kind of bruised-apple like oxidation you often encounter on low-sulfur wines.

HUF 2,030 from Terroir Club (reduced from Ft 2,899) BEST BUY

2017. 10. 18. 19:04

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Giving an old Tale new Relevance

The creative process behind “Cinderella”, the latest dance piece from ExperiDance (a Hungarian group with an international reputation) took around a year. That might sound like a long time, but choreographer Sándor Román insists that, given the complexities involved in this project, it really wasn’t.

ROBIN MARSHALL

“A straight musical can take four years to bring to the stage, including the development work with a second-tier company while it is being fine-tuned and audience tested,” Román, who cofounded ExperiDance with producer Tibor Vona in the year 2000, tells the Budapest Business Journal in an exclusive interview.

“Creating something new always takes time. If you really have enough time you can create a new dance piece in seven months, working every day to create something very special. This one year wasn’t so long.”

For a start, “Cinderella” isn’t just a dance piece. Working with the same creative team that has now put together three major productions, they brought together music, songs, actors, even an LED back projection, though Román insists the way it is being used here has never been seen before in Hungary. Then there is the audience; this is billed as a family show, but it is the children the choreographer is really trying to reach.

“Last year we opened a dance academy; today we have 150 kids. This is a big responsibility, and I realized I wanted to give them something that was very serious, very deep.”

Having spent time with the children at the academy, Román says he learned this new generation really is different.

“They live on the same earth as us, but they live different lives to us.” Much of that is based around the internet and their connection to it, and through it to each other.

Román says today’s children live life at a greatly accelerated pace; what is new to us is already old to them. But he also believes they have access to too much information, while lacking the ability to filter it. They also miss some

BBJ_2519_socialite.indd 23

Sándor Román, choreographer and cofounder of ExperiDance.

of the wisdom that could be gained from talking with their grandparents.

“I am not judging them at all; they live really great lives, but I can see what is missing from that. I believe if we can give them that missing part, they will really appreciate it.”

Characters With Depth And so, he went back to an old story, one everyone knows, but he stripped it back, and then started to build it up.

Most importantly, not least because he was trying to pass on some life lessons to the children, he wanted the characters to have depth, and to evolve.

“Our Prince has to grow up, to understand he has to find the girl, not

that the girls have to find him. He has to do something to reach her. He has to change his mentality; at the beginning, he is not a positive character.”

Likewise, Cinderella is not just a passive victim of the story. In the ExperiDance version she is also something of a village magic woman, a natural healer who makes herbal teas and soothing creams. There are more twists and surprises, characters from other classical fairytales feature, and there are entirely new creations, such as the Music Minister.

And the story is set in Esterháza, the palace in Fertőd built by Prince Nikolaus Esterházy, and known to all Hungarians (and many foreigners). “It makes it recognizable for Hungarians; the fairytale is coming to Hungary, making it closer to them.”

Little wonder, then, that it all took time. Characters had to be developed, dancers cast in the right roles (not to mention actors and singers), the animation for the LED wall prepared.

Not only that; Román had to create something entirely new, but at the same time still recognizable as an ExperiDance show.

“I spent a lot of time on little details, because I believe they are important.

The story has to be authentic, the characters have to be right. If they are not, the kids can recognize if something is false, if something is missing.” They can be a tough crowd, children.

“Cinderella” had its premiere on September 29. There are plans to tour the show around the country but, for now, it runs on various dates until December 31 at ExperiDance’s home theater, the RaM Colosseum at Kárpát u. 23, in District XIII, but more details can be found on the dance group’s website: experidance.hu

FINA World Championships Opening Show It has been a busy year for Sándor Román, and not just with ExperiDance: on July 14, the special set piece dance he choreographed formed one of the highlights of the FINA World Championships opening show.

“It was something I really wanted to do, because it was possible to give to the world some new information about Hungary, and I really appreciate that the artistic team creating the opening show gave us that chance.

It is really possible to show the Hungarian soul through Hungarian folk dance.”

Building on Hungarian folk dance, Román created a story that spanned the Roman Empire and the coming of the Huns, shamans, Mátyás (Matthias) and the Renaissance Court, and the famous Hungarian light cavalry trooper, the huszár.

But he wasn’t just working with his usual team from ExperiDance; some 500 artists, drawn from professional and amateur troupes across the country, were on stage.

“The dancers were really wonderful: it was my responsibility to give them good material; they had to trust in me and follow my vision. At the end, I think the success was enough to give something back to the dancers.

I am very proud of them.”

2017. 10. 18. 19:04

Renault TALISMAN

COPYRIGHT: JAN STEINHILBER

Comfort. Control. Elegance.

TALISMAN average fuel consuption l/100 km: 3,6 – 5,8, CO2 emission g/km: 95 – 132 according to NEDC cycle. The picture shown is for illustration purpose only.

renault.hu BBJ_2519_socialite.indd 24

REN TALISMAN_Budapest_Business_Journal_280x360.indd 1

2017. 10. 18. 19:04

2017. 10. 12. 18:43