‘Crisis tax’ will impact on CAPEX plans, Invitel boss warns

20 Oct 2010

A so-called ‘crisis tax’ levied on Hungarian telecoms operators will have a detrimental impact on their capital investment plans, says Invitel deputy chief executive officer Gyorgy Zsembery. MTI-Econews quotes the official as saying that the local market is already heavily regulated and that as such, it is impossible for telcos to pass on the cost of taxes to end users. Moreover, consumers would not accept any rise in prices, he added. Given that Invitel estimates it will have to pay an estimated HUF4 billion (USD20 million) on the crisis tax this year, it believes this will jeopardise its CAPEX – which last year amounted to HUF6 billion. The telco, which has more than 850,000 retail and 60,000 corporate customers, booked EBITDA of HUF26.5 billion on revenue of HUF57 billion in FY2009, roughly the same as in FY2008.

As reported in TeleGeography’s CommsUpdate, earlier this month Prime Minister Viktor Orban revealed plans to implement the new tax, sparking immediate criticism and concerns the move will damage the development of the country’s market and weaken the pace of technological rollouts.