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Hungary: Mobile Phones Proliferate In Hungary

  • Kitty McKinsey

Budapest, 20 October 1998 (RFE/RL) -- Sit down for lunch at Cyrano, one of downtown Budapest's most popular gathering spots for young business people and professionals, and you might think that owning a mobile phone is the price of admission.

Lunch is constantly interrupted by the ringing and chirping of mobile phones. There's at least one at every table.

Hungary is one of Europe's biggest booming markets for mobile phones. Today one Hungarian in 10 owns a mobile phone. That is the same proportion that had a fixed land line just five years ago.

Andras Sugar, chief executive officer of Westel 900, Hungary's dominant mobile service provider, says the growth in the market in such a short time has been staggering.

"When you see that there are one million mobile users (in Hungary), it means that every second or third family already has a mobile phone."

The explosion in mobile phone use is just one part of the Hungarian success story in telecommunications. Thanks to the 1993 privatization of the state phone monopoly, MATAV, and to the advent of competition in the industry, Hungary has quadrupled the number of its phone lines in just five years --if both fixed land lines and mobile phones are taken into account.

Analog mobile phone services came to Hungary in a limited form in 1989, but real growth dates from the establishment five years ago of two companies providing GSM digital service. GSM, which stands for Global Service for Mobile, allows mobile phone owners to roam from country to country and still receive phone calls.

In Hungary, mobile phones were at first seen as a way to overcome the severe limitations of the poor land-line network. That is the recollection of Otto Gecser, chief marketing officer for MATAV, the largest Hungarian phone company, which also provides mobile phone service.

"It's very interesting that at the very beginning, one of the major --if not the major-- driving force was the lack of phones. So five years ago, nearly one million people were waiting for a line. You went into a shop and in 25 minutes you got a (mobile) line --it (didn't) matter the cost, you were happy. Slowly, slowly, as the (number of normal phones lines) increased, (mobile phones) became more a business tool, no doubt a fashion, Yuppie stuff you can keep in your hand."

Although mobile phones still have a cachet of chicness, Gecser says they are more and more being looked on as an indispensable tool for business --and even for private life. He says: "We believe the world will go wireless, which means your personal equipment will be with you."

Westell 900's Sugar says that Hungarians, with their love of conversation, are a prime market for mobile phones.

"The young people really are enjoying this. And I think this is really a Hungarian habit, because we like to talk, we like to discuss constantly, we are good traders."

Hungarian mobile phone companies are currently lowering prices and offering a large range of services to sell mobile phones to people who never knew they needed them.

The services include some never before associated with the telephone --like being able to send a written message over a digital phone system. Westel 900's subscribers have the right to send 20 short written messages (of up to 160 characters each) over the phone free each month. Sugar says this service has become popular with cost-conscious grandparents who want to save money but still keep in touch with their grandchildren -- both in Hungary and abroad.

Futuristic services already available in Hungary include the ability to receive, over a mobile phone, notification that you have received an e-mail on your computer. Sugar says the benefit of this is that you don't have to open your computer or lap-top too frequently --only when you know there is a message waiting for you.

By the end of this year, Hungary expects to have at least one million mobile phone users (a 10 percent penetration rate), a level still behind lesser-developed West European countries like Portugal or Greece.

Scandinavians already own more mobile phones than Hungarians have phones of all kind. And almost beyond comparison is Finland, which in August became the first country in the world to have more than 50 mobile phones per 100 inhabitants.

Gecser says catching up with Finland is too ambitious a goal, but Westel 900's Sugar is confident Hungary can reach even that level.

"In our 10-years' plan, we are planning a similar development. Of course it's very hard to predict what will be in 10 years, but we spent seven or eight years in Hungary to reach the one-million level. ...I think in two or three years we will reach another million customers. We are at the curve of the development and I think in the coming years the mobile penetration will increase much faster. So we will reach the Finnish penetration in this coming 10 years, certainly."

(Third of three features on developments in the telecommunications sector in Central and Eastern Europe.)