Boston, MA -- (SBWIRE) -- 09/06/2012 -- BMI's Q312 Hungary Telecommunications report analyses the latest trends and developments, including the potentially damaging proposal for a usage based telecoms tax. The report also includes BMI's forecasts for Hungary's fixed-line, broadband, mobile subscriber and mobile monthly blended ARPU through to the end of 2016. Our forecasts are based on analysis of regulations, market trends and data from both the regulator and operators Telenor, Deutsche Telekom-owned T-Mobile and Vodafone Hungary, covering the period to the end of December 2011.
In May 2012 the government announced the Szell Kalman Plan 2.0, Hungary's budget for addressing its deficit, in which the government announced proposals for new usage-based taxes on the telecommunications sector. The proposal is for HUF2 per minute tax on telephone calls and HUF2 tax per SMS. The proposed taxes are expected to generate HUF30bn in 2012 and HUF52bn in 2013. BMI believes the tax will have negative impact on operators and the sector's development trajectory by incentivising VoIP and SMS IP substitution.
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The most recent complete set of operator data relate to the period to the end of December 2011, with only Telenor reporting data for Q112 at the time of writing. In the face of macroeconomic headwinds, the Hungarian mobile market experienced a difficult 2011, with uncertainty continuing into 2012 as a result of the government's tax proposal, Hungary's macroeconomic outlook and the wider eurozone crisis. Over FY11 the market experienced declining subscriber numbers, with total subscriptions down 4% y-o-y to 10.87mn, but an improving subscriber mix stemming from large prepaid losses in Q111. Subscriber losses were compounded by steep declines in ARPU. BMI calculates that the market share weighted monthly blended ARPU declined 16.5% y-o-y to HUF3,184 in Q112, while prepaid and postpaid ARPU were declined 15.7% and 18.2% respectively.
In terms of operators, Vodafone was the clear outperformer, losing 2,000 subscribers in 2011, while Telenor and T-Mobile lost 63,000 and 391,000 respectively. T-Mobile's parent company has stated that the loss is related to a restating of figures and this time excludes business customers, and therefore we do not expect a repeat of these losses in 2012. As such BMI forecasts the market will return to growth in 2012, and average 1.8% y-o-y subscriber growth during 2012-2016 with the market reaching penetration of 119.9% by YE16. However, we expect quarters of subscriber losses resulting from inactive subscriber discounting that mean growth will be volatile. We maintain our view that operator ARPUs will remain under downward pressure as a result of macroeconomic conditions and price competition in the market, which could be exacerbated by a new entrant.
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