Hungarian local telecoms operator Invitel, known as Vivendi Telecom Hungary until twelve months ago, has said it is hoping to boost profits by 15% to 20% in 2004 on the back of a 12% hike in revenues. The increase in profitability is expected to be achieved via a reduction in interconnection fees and the implementation of a number of other cost saving measures. At the end of 2003 Invitel had 400,000 residential customers as well as 35,000 business subscribers. In the broadband market the company reported a fivefold increase in the number of ADSL customers to 15,000, a figure which it confidently expects to double in 2004. As it stands around 60% of households in Invitel’s franchise areas have access to ADSL, a figure expected to rise to 90% by December.
Despite the company’s upbeat outlook, its CEO, Ian McKenzie, has voiced concerns over the implementation of the country’s new Electronic Telecommunications Act. Based on EU directives, McKenzie claims that the legislation is unjust because it applies EU benchmarks for pricing despite the country having a different level of economic development than others in the grouping. McKenzie was drafted in to Invitel in May 2003 when GMT Communications Partners and AIG Emerging Europe Infrastructure Fund agreed to buy Vivendi Telecom Hungary from Vivendi Universal for EUR325 million.