English Summary

---

The new minister wishes

competition one year earlier

Mr. Kálmán Katona, the new Minister of Transport, Communication and Water Management got into the center of attention with his first statements, since he said, that he would like if the MATÁV monopoly expired earlier than January 1, 2002. Our first question was about the chances of ending the monopoly earlier.

&endash; My opinion is that in spite of the short time available, if we succeed to agree with MATÁV, we can bring ahead introduction of competition on the public fixed voice telephony market with approximately one year. It won't be useless for MATÁV either if we allow competition one year earlier, since it isn't only MATÁV that has to fear potential competitors entering its field, but MATÁV itself may enter for example the markets of the LTOs. Competition is clearly advantageous for the consumers, since prices will become lower in aggregate. We can recall when we eliminated the monopoly on the data transmission market, prices went down, while MATÁV also profited from the changes. In other words I reckon that earlier competition might also be in their interest.

&endash; What are the conditions that have to be assured until then?

&endash; It is a fact that I wouldn't give up myself my monopoly in the actual regulatory environment. It is our task to work out until the beginning of January, 2000 the economic, legal, regulatory environment setting the frame for competition. Network interconnection issues and related tariff sharing has to be settled, we have to make the transition to cost based settlement and tariffs, we need a numbering system that can handle universal services and a market with multiple actors.

&endash; Let's suppose that you succeed to solve those problems. The concession contracts cannot be amended unilaterally even under such conditions.

&endash; Of course, neither the concession contract of MATÁV, nor those of the LTOs can be amended without a common agreement. However, I feel that if the appropriate conditions and environment is worked out, we will have sufficient means and arguments to convince the operators being in monopoly situation that it's better even for them if they accept the changes.

&endash; Competition is beneficial for the users, but there still might be need for consumer protection rules and institutions. There are for example certain billing complaints where it could be good if the control organ was not the service provider - in this example not exclusively the fixed operator.

&endash; Certain rights had been granted to the Consumer Protection Authority (FvF), but they have no staff and technical equipment to be properly prepared, partly for financial reasons too. In consequence we cannot give up the possibility that HIF (Communication Authority of Hungary) also investigates the billing complaints in certain cases. If it is revealed that a service is of reduced value, quality - this can be the case with the RLL telephone line in some places - the consequence should be that the operator charges a price proportional with this lower quality. My general opinion is that consumer protection is a very complex task and the system of institutions has to be reviewed, since there could be areas where there is need for changes.

&endash; There could be tasks needing urgent measures in other areas too. We have for example the indignation of the cable television operators because of the MATÁV entry to the market - even if MATÁV entered an area where the cable TV companies had no intentions to build the network. However: international experience shows that maybe it is better if we allow at the same time the cable TV companies telecommunications service opportunities and vice versa.

&endash; For pure theoretical reasons this would be the interest of the users. It is a fact on the other hand that a significant part of the existing cable television networks represents a low quality level even in the cable TV service area and if we take the standards seriously, they are not appropiate for cable television service, not to speak about telecommunications. Major investments, network developments would be needed in the area. It is an unfortunate fact that the system of terms and conditions concerning cable television service is not properly set out in the legal regulations. Taking into account the actual power relations the Media Act cannot be completed with regulation concerning cable television, so my position now is - and I would like to submit such a proposal to the Government - that there should be an independent Cable TV Act. If this is a law requiring normal majority in the Parliament, it can be prepared within due time under the professional coordination of KHVM (Ministry of Transport, Communications and Water Management) and submitted for voting.

&endash; One of the "consequences" of the Media Act, ORTT (National Radio and Television Council) could well be dismissed, since its leaders had shown several times their incompetence. It is enough if we only mention that they assisted to a concessionaire commercial radio station entering the market with a program structure totally differing from its concession bid - while in fact it stole the idea of an already operating radio station, enticing its employees, and so on... If this can be done in a country and ORTT approves it than there is no legality and business ethics.

&endash; Existence and componence of ORTT is an absolutely political matter, exceeding by far the competence and possibilities of KHVM. Nevertheless, the progress of communications technology will result rather soon in such a situation that simply steps over ORTT.

&endash; When will the destiny of Antenna Hungária finally become clear?

&endash; I checked the Business Plan prepared by the management of the company, but I need further information about some aspects. Antenna Hungária has a vision, the cornerstones have to be determined precisely. I reckon that if we submit a draft to the Government in respect of Antenna Hungária, KHVM and ÁPV Rt. (State Privatization Holding) will represent a common position at voting - on the contrary to examples of previous years.

B. J.

Home, contents

---

World Card from MATÁV

 

MATÁV enters the market with its new service at a very favourable moment. In the middle of summer everyone is travelling and the World Card helps to make the time spent far away from home even more pleasant and without worries. We asked Mr. Gábor Kolláth, Head of Department at MATÁV's Directory assistance and public pay-phone services, what this World Card is anyway.

- What is the essence of the World Card?

- At first sight it seems a telephone card of the same size, having an identification code. This has to be dialled into the telephone set when used. The World Card is a new service of MATÁV, already popular in many countries, mainly in Northern America. This card can be used to generate calls from abroad home or into a third country, and it is a novelty of the service that it can even be used in Hungary from anywhere within the MATÁV service area abroad, towards mobile systems and the areas of the local concession companies.

The predecessor of the service was the Calling Card, used for calls from abroad to Hungary with the help of an operator. The world card can be used in all four relations, abroad-home, home-abroad, home-home and abroad-abroad, all without an operator. We have to call the Hungarian access number of the service (1234) and an automatic voice will instruct further on the user. If we would like to make a call from abroad, we have to dial in the corresponding green access number, different for each country, mentioned in the information leaflet. It is important to know that the card contains only the identification number, it doesn't have to be introduced into the telephone set.

- What services does the World Card provide?

- The world card allows several services, for example it makes possible more than one call. Since it works like a credit card, the calls are charged with the next normal telephone bill. Its use can be restricted immediately if lost. It is able to store ten of the most frequently called numbers, allowing as a comfort service their short dialling. The language of the voice instructions can be chosen. There are supplementary services too: numbers or directions barred from calling, restriction of call frequency or duration, etc.

- Where can the World Card be used?

- Abroad in all countries (presently 37) that have a settlement agreement with MATÁV, in Hungary until the end of this year only from the MATÁV service area, but hopefully from next year this restriction will also disappear according to the joint intentions of us and our partner operators. The World Card can be used from any push-button telephone set, not only public pay-phones but also office telephones or the sets of a friend or acquaintance.

- What are the advantages of the World Card besides the above mentioned?

- One of the most important advantages is that the counter-value of the call can be paid subsequently, at home, even if we called from abroad. The tariffs are calculable, there are no surprises for the customer since we use the MATÁV tariffs, much lower than the charge of calls made from hotels for example, and in many cases cheaper than public pay-phones. There are countries where you can call at half price with the World Card. detailed bills are also available. Its use is easy, if you've learnt it in one country you can do it anywhere. Should any problem occur, there is another number for help from the operator.

- What are the service tariffs?

- The call charge is for each call the MATÁV tariff and an extra fee of HUF 50 for domestic calls and HUF 100 for international ones. In the initial period the domestic extra charges has been reduced to HUF 25 until October 15. The card itself is free of charge. It can be ordered in the customer service offices of MATÁV or through the telephone customer service.

H.E.

Home, contents

---

The telecommunications sector grows dynamically

TOP LIST '98

 

Rank 1997	Rank 1996	Company	Net sales '97	Net sales '96	Profit before tax '97	Profit before tax '96
1	1.	Hungarian Telecom. Company. (1)	195 059.922	151.704.070	26 300.520	16 214.400
2.	3.	Hungarian Post Rt.	62 633.676	54 787.280	3 289.804	1 952.846
3.	4.	Westel 900 GSM Rt.	57 480.154	36 636.196	13 039.748	5 065.120
4.	6.	Pannon GSM Rt.	33 794.946	19 177.069	1 472.728	(2 241.010)
5.	-	Nokia Display Products	27 000.000	-	-	-
6.	5.	Ericsson Kft	26 874.965	19 656,487	2 829.461	1 506.536
7.	7.	Siemens Phone Factory	23 826.805	17 303.000	-	1 835.568
8.	-	Samsung Electronics Hungary (2)	16 959.711	-	156.617	-
9.	10.	Nokia Telecommunications Hungary	16 178.964	7 482.516	1 504.047	-
10.	8.	Westel Mobilephone Kft.	13 255.598	14 553.593	1 870.830	2 267.976
11.	9.	Antenna Hungária Rt.	10 644.382	8 366.162	1 419.697	610.243
12.	-	Philips Hungary (2, 6)	12 580.000	-	-	-
13.	12.	Digital Hungary	10 400.000	6 500.000	-	-
14.	-	Albacomp Rt.	9 300.000	7 200.000	-	-
15.	-	Sony Hungary (2)	8 500.000	-	-	-
16.	15.	Déltáv Rt.	7 374.000	4 049.000	-	-
17.	20.	HTCC Group (6)	7 009.835	3 136.500	(6 703.660)	-
18.	-	LG Electronics Hungary(2)	6 146.577	-	-	-
19.	14.	Computer 2000 Hungary	5 950.000	4 396.000	-	-
20.	31.	Digitel 2002 Rt.	5 744.000	1 811.000	-	-
21.	-	Matávcom Kft.	5 122.526	-	96.395	-
22.	-	KFKI Informatics Group	5 050.000	-	420.000	-
23.	11.	HP Hungary(3)	5 044.570	7 350.000	515.499	-
24.	-	CHS Hungary	5 010.000	2 700.000	-	-
25.	33.	Rank Xerox Hungary	5 000.000	1 663.642	-	-
26.	-	Synergon Rt.	4 700.000	-	293.648	-
27.	16.	Emitel Rt.	4 276.408	3 621.587	(601.115)	(11.627)
28.	27.	HRP Hungary Kft.	3 992.249	2 400.000	78.401	-
29.	25.	Monor Telephone Company	3 568.908	2 647.604	(2 687.196)	-
30.	21.	First Pest Telephone Company	3 553.105	2 993.379	1 026.968	684.638
31.	-	Mûszertechnika Irodatechnika Kft.	3 500.000	-	-	-
32.	-	Andersen Consulting Kft.	3 300.000	-	-	-
33.	26.	Siemens Private Network sector (4, 5)	3 217.600	2 500.000	82.000	-
34.	-	Matávline Kft.	3 186.118	-	(362.385)	-
35.	29.	Lucent Technologies Hungary	3 158.373	2 000.000	-	-
36.	-	Oracle Hungary Kft.	3 066.264	-	-	-
37.	22.	Graphisoft Rt.	2 984.382	2 850.000	1 956.506	950.000
38.	42.	Montana Holding Rt.	2 800.000	1 295.412	-	-
39.	-	IDOM Rt.	2 797.313	-	-	-
40.	-	Kventa Kft.	2 690.239	-	-	-
41.	30.	Trendex Group	2 152.831	1 915.850	17.214	-
42.	-	Coopers&Lybrand Dynasoft Rt	2 061.056	-	567.162	-
43.	35.	Duna Kábel Kft.	1 964.830	1 504.497	190.287	141.596
44.	-	MÁV Informatika Kft.	1 882.741	-	12.948	-
45.	-	Panasonic Hungary(4)	1 800.000	-	-	-
46.	46.	Lias-Networx Kft.	1 800.000	1 200.000	113.069	55.300
47.	-	Sysdata Kft.	1 800.000	1 400.000	-	-
48.	50.	GTS Hungary	1 799.848	1 025.187	-	-
49.	45.	HunSat Joint Venture	1 757.383	1 226.719	805.178	75.959
50.	38.	Extrafon Mobilphone Group	1 626.651	1 408.367	16.611	2.148
51.	-	Alcatel Hungary K(4)	1 600.000	1 329.887	-	-
52.	34.	Hungarocom Kft	1 573.661	1 597.000	709.286	226.663
53.	52.	Delta Elektronik Kft.	1 547.488	929.903	-	37.237
54.	49.	JászTel Rt.	1 363.235	1 040.000	(673.636)	(551.745)
55.	-	Minolta Hungary	1 274.433	-	-	-
56.	62.	BankNet Kft.	1 250.000	564.000	-	-
57.	54.	Micropo Computer Kft.	1 181.132	778.676	-	13.428
58.	-	Integra Rt.	1 000.000	931.000	-	-
59.	-	Elender Computer Informatikai Rt.	989.888	1 252.805	-	-
60.	73.	Megatrend Kft.	924.765	400.000	-	-
61.	-	OKI Hungary	900.000	-	-	-
62.	58.	Intercon Kft.	840.000	710.000	-	-
63.	-	MRTL Rt.	736.184	-	(2 392.202)	-
64.	-	Guards Telecommunications	706.998	-	-	-
65.	-	Quality Consulting Kft.	700.000	-	-	-
66.	65.	IQSoft Rt.	681.000	521.377	-	25.488
67.	72.	HungaroDigiTel Rt.	670.935	415.000	58.366	12.000
68.	56.	Megamicro Rt.	663.180	744.315	9.790	5.320
69.	66.	Fornax Rt.	657.691	500.000	49.711	-
70.	59.	HDS Kft.	650.000	575.277	-	-
71.	55.	Antenna BHG Broadcast Techn.	629.377	751.000	59.556	74.000
72.	-	Kerszöv Kft	624.000	-	-	-
73.	-	Intersoft Group	588.612	-	-	-
74.	67.	Totaltel Kft.	566.000	500.000	-	-
75.	-	Datanet Telecommunications	543.000	-	-	-
76.	-	Távisz Kft.	535.047	-	32.812	-
77.	-	InvoRáció Rt.	500.000	-	-	-
78.	-	Axico Kft.	499.700	-	-	-
79.	-	Recognita Rt.	460.000	-	-	-
80.	68.	Mechanikai Mûvek Rt. (4)	445.000	476.000	54.000	13.000
81.	71.	Balatel Rt.	408.465	427.076	5.577	6.466
82.	74.	Wandel& Goltermann Hungary	408.357	385.000	-	-
83.	-	Szeged CableTV	400.641	-	137.099	-
84.	-	Online Kft.	400.000	170.000	-	-
85.	-	Inteltrade	398.465	-	95.374	-

Source: Corporate data, press releases, Company Registration Court. Data shall be considered in million HUF, fraction values are shown by decimal points. Losses are shown in brackets. Key: (1)= Data without subsidiaries! (2)= Includes not only telecommunications activity net sales. (3)=The Company Registration Court data doesn't reflect the entire Hungarian turnover generated by the company. (4)=Includes only the sector net sales. (5)= Business year between October 1 and September 30. (6)=Data calculated with HUF185/USD average exchange rate. ..In Hungary Rt. means Joint Stock Company and Plc. too! Kft. means Ltd.

THIS YEAR our top list providing a ranking between telecommunications, informatics and office equipment enterprises in Hungary, resulted again from a rather adventurous process. While it is fortunate that we received information from some of the companies which previously withheld their data, there were a number of companies, mainly with multinational background, which didn't wish to provide data concerning the turnover in Hungary. In most of the cases the argumentation was that according to the decision of the parent company they cannot provide data split down to countries.

We reckon that every company which operates here in Hungary owes the public at least the non-confidential handling of its data concerning our country. Otherwise there is no real sense of this confidentiality. The Company Registration Court works better and better, and in spite of the fact that processing of the annual reports is under way, we succeeded to get from them legally the data of numerous enterprises, since such information is public! This is why, in compliance with the rules of the Act on Accountancy, the data has to be submitted to the Company Registration Court until the end of May each year...

Unfortunately, despite all our efforts there was around at least a dozen of companies with revenues (net sales) in billions of HUF, where we could not acquire the relevant data. Nevertheless, next year we will publish our top list in September and by that time there will surely be no data that can be kept secret. Otherwise the decisive majority of the companies figuring in our top list reacted positively to our request, there were just a few companies where they were not simply rejecting but actually rude. Nonetheless, we managed to get the data of some of these companies, since the responsible people didn't think it over that a few months ago they already told the information at a press conference... In respect of the data from the table it is worth to be attentive to the keys too. There were several companies where they could not split down the data to telecom and informatics, just the aggregate turnover of the company. Thus it is understandable that there is a high volume of turnover under Philips or Samsung, while for example Panasonic gave data for the entire sector. These circumstances make somewhat difficult interpretation of the data lines, but they provide anyway some clues about the companies. (Otherwise, thanks to convergence and the dreams of Bill Gates that seem to become reality, sooner or later Windows CE will run even in vacuum cleaners, micro-wave ovens and refrigerators, so the borders between sectors will really disappear...)

Changes among the companies were relatively high compared to the previous year top list, not only because we managed to collect more data this time. Some of the companies figuring in our last year top list don't exist anymore, e.g. due to the mergers at Matáv. He disappearance of some companies from the top list shows another trend, if the reason is fusion or buying up. An example for this is the Optotrans-Rolitron fusion, they figure in the actual table as Synergon. Of course there are again some enterprises on the top list that don't exist anymore because of buying up or merger that took place this year, or their performance data was incorporated into the results of a company group. Here we can mention again the company purchasing activity of Synergon Rt.

It is worth paying attention to some issues concerning the telecommunications sector. On the one hand in respect of Matáv the information is without the subsidiaries (one reason for having Matáv shares, since this data has to be included in the shareholder information), since in our mind they reflect more precisely the performance of a company than the consolidated indicators, corrected with the subsidiaries. Thus, even if Matáv provided only consolidated data according to the international rules, we could rank the company according to the information considered more important by us. In order to be precise, we also give you the consolidated data concerning Matáv, including also the indicators of the subsidiaries. According to this the net revenue of Matáv in the last year was HUF 253 billion 948 million, with a profit before taxation of HUF 43 billion 951 million. If we compare this with the data of the subsidiaries, we can see that approximately 40% from the total profit of the company was generated by the subsidiaries. If we take into account the invested capital behind the profit without the subsidiaries, we will realize that the ratio doesn't even reach ten percent - and from this viewpoint we could even say that the offensives against Matáv, because of the tariffs, are unjustified.

Perhaps we shouldn't forget that the Hungarian economy is open - if it were not so we would have gone bankrupt long time ago - but this means that everything has to be procured at world market prices and we can also sell only at those prices. If this is true for fuel for example, why should it be otherwise at telephone tariffs? Even if it is true that with the average Hungarian wages average people consider these prices high (see gas, apartments, cars and others), economically it isn't feasible to simply adjust these prices to the wages.

On the other hand of course Matáv could find such structural changes in its tariff policy that would promote for example spreading and use of Internet, while its profit rate projected to the invested capital wouldn't deteriorate too much...

Looking around among the telecommunications operators it can be stated clearly that a really profitable activity is only mobile telephony besides the long distance voice services of Matáv. The LTOs can still increase their revenues only at the detriment of significant losses, the question is under what circumstances can this trend get reversed - eventually through different interconnection rates, a significantly higher local tariff, and a major economic boom. If mobile telephony develops with the rate we got used to until now, one of the GSM operators, Westel can get ahead of the always second Hungarian Post already on the basis of its 1998 net sales.

Nokia is making great progress among telecommunications and communications manufacturers, keeping this pace it can precede in net sales Siemens Telephone Company until the end of 1998. Of course the activity with the greatest turnover is not only the most profitable one. If we make a separate list from the companies figuring on the top list, comparing in percents the profit before taxation projected to the net sales, we get rather surprising results. From this point of view the best business is to be a software house as Graphisoft does it, but from this aspect Hungarocom and Hunsat have good results too.

With this we can shift to the area of informatics. Unfortunately many big companies are missing from our top list in lack of data (IBM, Compaq, to mention only two of them). However, we can promise one thing to our readers, that next year they will surely not avoid figuring in our top list, since now it depended on their data still being processed at the Company Registration Court. It is a fashionable solution for companies dealing with informatics that the turnover generated by the company doesn't necessarily appear in the books of the Hungarian company. In consequence the data from the Company Registration Court doesn't reflect in several cases the market results of the given company on the Hungarian market. There are companies where the business performance that doesn't appear in the turnover of the Hungarian subsidiary is only 10-20%, but at others it can even reach 60-70%. This doesn't mean illegal economy, only such legal accounting technique solutions that help companies in minimizing their costs, e.g. rates and taxes. In lack of anything better, we try to collect about everyone the data submitted to the Company Registration Court. If these figures are visibly different from what the companies admit publicly about themselves at press conferences, after some time they will be forced to make public their real Hungarian turnover as well...

Partly this explains why on paper HP had a lower turnover in 1997 then in 1996. On the contrary, they increased their performance significantly, but a great part of it does not appear in the books of the Hungarian sales organization, even if inside the company it is accounted as generated in the country. The same thing can be valid for IBM Hungary too, since our unofficial information states a double traffic, compared to what is available (from autumn) from the Company Registration Court data. It is interesting to play around with the unofficially accessible data, according to which the big five among the informatics companies (before the Compaq-Digital merger!) show the following order: IBM, HP, Digital, Compaq, Albacomp. It seems that Synergon will probably be able to join this illustrious society, the others will have to elaborate other strategies in order to remain on the market on the long run.

This year we can make for the first time a small separate ranking between office equipment companies. If Canon also gave its data and we got the information split down for this area from Samsung too, the order would also be a rather complete one.

We are especially happy to find two companies on our top list that at first sight can be considered as not belonging here. These are Coopers&Lybrand Dynasoft Rt. (more precisely PriceWaterhouseCoopers according to its new name), and Andersen Consulting. The activity of these companies is so closely related to corporate communication and management, financial supervision systems that it is justified to display them here. An up-to-date company cannot be lead anymore efficiently without usage of telecommunications and informatics technology.

In relation with the changes in the economic regulation in two years there will be no more representative offices, so we will be able to get by that time turnover data of companies such as Novell.

B. J.

Teleworking may start

We mentioned several times introduction of the possibility of teleworking, but until now these have only been plans. We asked for concrete information from Mr. Sándor Skriba, Project Referent of MATÁV.

Since our last meeting the Teleworking Coordination Public Interest Company was founded by Futurisz Rt. and the Ministry of Labour. Their task is to be the teleworking registration center and to be the contact forum between employees and employers.

The Ministry of Labour issued two tenders in February and May. One serves for establishment of labour opportunities for those with changed working capabilities, the other helps getting jobs in case of women that cannot go back to their old working place from children care allowances. In both cases the employees can bid for HUF 500 thousand per job, for support of teleworking.

The first tender has ended, from the sixty bidders twenty won and the HUF 100 million will probably be spent for establishment of around two hundred new jobs. Two thirds of the companies undertaking teleworking are from the countryside.

MATÁV worked out, in compliance with its undertakings, teleworking packages. These provide the communications lines necessary for various level teleworking activities, the hardware and software needs to be assured by Teleworking Kht., and labour legal information. MATÁV also assures an entry fee discount for the teleworking service package, which may reach 40%. Teleworking employers have to get registered at Teleworking Kht. in order to be entitled to the discounts.

There are three teleworking service packages. The MATÁV "Standard" package is built on a normal analogue business line and assumes modem link. Activities available through this package are for example translation and data-base loading. The service package contains besides the analogue line Digifon, Voice Mail, Detailed Bill and Internet services.

The second one is the MATÁV "Optima" package. This is based on an ISDN line and allows a better data and voice transmission or even video link for example for journalists, designers, etc. Besides the ISDN2 line it includes Voice Mail, Detailed Bill and Internet service.

The third package is the MATÁV "Maxima" and was designed for the users where a high speed and long duration link is needed in most of the working hours between the center and the employee. Such are for example software development activities. "Maxima" assumes a leased line connection, providing mainly data and voice communications, but eventually also video link.

As for the costs the entry fee is HUF 35,000 plus VAT instead of HUF 60,000 in the first case for the analogue line, and 100,000 instead of 150,000 for the ISDN. Other services also have discounts. The packages are available since June 1 and not only for the winners of the tender, but anyone who registers as teleworking employer. From next year, when MATÁV will introduce time based billing, we will be able to give traffic discounts as well, besides the actual entry fee reductions.

Tleleworking Kht. and the Telehouse Association are preparing a cooperation agreement, according to which the telehouses would allow establishment of teleworking work stations, lent to the employers. Presently there are fifty-seventy telehouses around the country, but it is expected to reach eighty-one hundred until the end of the year. MATÁV also supports the telehouses professionally and otherwise.

The number of new teleworking jobs can be estimated to around one thousand this year, but it will continuously grow as the program becomes known.

H.E.

The Hungarian paging market became clearer

 

It seems that Easycall Rt. and Antenna Hungária Rt. made good business at the end of April, when the former purchased from the latter Operátor Hungária, providing paging service. The price is confidential, but according to our information Antenna Hungária sold its subsidiary profitably, while EasyCall doubled the number of its subscribers and also "got rid of" a competitor.

Operátor Hungária being in the majority ownership of Antenna Hungária, started its service in January 1992. Digital competition - ERMES standard - appeared in 1995 with the winners of the tender issued by KHVM - EasyCall Rt. and EUROHÍVÓ Rt. Neither of the newcomers managed to put in practice the optimistic start, since the paging market developed slowly - besides the GSM telephone becoming cheaper at least in entry fees.

According to Mr. Zsolt Pákozdy, CEO of EasyCall, having presently around 9000 subscribers, three paging service providers cannot live on the market, this is why they decided to buy Operátor Hungária. They only purchased the company, the equipment remained with Antenna Hungária and they will provide - probably until the end of 1999 - the analogue paging service leasing this equipment. In the meantime the actual Operátor subscribers - also around 9000 - will receive ERMES sets allowing use of the basic service.

EasyCall spent around HUF 1.5 billion to build out its network and will reach until the end of this year, with an additional investment of approximately HUF 0.5 billion the country-wide coverage.

The transaction eliminated a legal anomaly persisting since years, because Operátor Hungária was not a concession company, it performed the activity only with a temporary license from KHVM - as we found out from Mr. Imre Bölcskei, Deputy Secretary of State.

Now the market includes only two ERMES concession companies with around 22 thousand subscribers.

EasyCall analyzes introduction of a new tariff policy - based on Western-European models. Presently forwarding of a message from a land-line telephone through pager costs HUF 31.20 net, almost one third being due to the company (MATÁV) "lending" the fixed network and the rest remaining at the paging company. In Western Europe the tariffs are much higher, but since the entry fee of the system is lower, this has to cover the costs of the company. The main obstacle is the high price of pager equipment, since according to surveys the maximum affordable price would be around HUF ten thousand, while a better ERMES receiver costs around double.

EasyCall intends to complete its choice with a broad range of content services. According to the hopes of the company the ERMES pager could become a cheap and fast information system, since it is almost unbeatable - as Mr. Zsolt Pákozdy says - in spreading a information cheaply from one point to a multitude of destinations.

The other area of development is extension of automatic data forwarding, which costs monthly HUF 3900 net with the basic service, providing throughout the office hours of the Budapest Stock exchange every 15 minutes the share quotations and exchange rates, and daily the current prices of investment bonds. Besides this the subscriber gets an automatic warning through Internet or its service center, if any of the selected six shares exceed or fall below a limit set by the subscriber. This can be useful for the small shareholders having a few shares, allowing them fast reaction to any price changes. Of course for the "big professionals" it is indispensable to have on-line link with the stock exchange.

Another user group could be the companies that might profit from being in daily contact with their regular customers, since the company can inform them with a pager provided free of charge, about the actual promotion actions.

The European ERMES market got four new entrants in the last six months, as we were informed by Mr. Zsolt Pákozdy, recently elected chairman of the international ERMES organization. The system operates already in Holland, France, Denmark, Finland, Sweden, Portugal, Switzerland, the Czech Republic, Croatia and Hungary. The ERMES MoU spends most of its energy on introduction and spreading of commercial roaming, making even more attractive the digital paging system.