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Govt, Magyar Telekom joint pledge: remove telecom taxes and accelerate 5G/gigabit fibre expansion

18 Sep 2023

Hungary’s government and nationwide telco Magyar Telekom have signed a Joint Declaration confirming their long-term cooperation for the country’s digital transformation, following a meeting of Prime Minister Viktor Orban, Minister of Economic Development Marton Nagy, Magyar Telekom CEO Tibor Rekasi, and Timotheus Hottges, CEO of the operator’s parent group Deutsche Telekom. As part of the declaration, the government confirmed its intention to abolish two existing taxes on telecommunications service providers: the utility tax will be removed in January 2024 and the supplementary telecoms tax will cease in January 2025.

For its part, Magyar Telekom pledged to expand its gigabit fibre/cable broadband network from its existing 3.5 million-plus premises footprint to pass a total of 4.5 million homes and businesses in four years (by end-2027), and to accelerate the expansion of its 5G mobile network – currently spanning 60% of the population – to reach ‘nearly 99%’ by 2026. TeleGeography’s GlobalComms Database shows that Magyar Telekom had previously targeted 67% 5G coverage ‘by 2025’ with a ‘nationwide’ 5G footprint (implying around 99%) formerly envisaged ‘by 2030’.

The GlobalComms Database notes that the government introduced Hungary’s supplementary tax on annual net revenue of electronic communications services in 2022, costing Magyar Telekom alone HUF24.6 billion (USD68.3 million) in that year, whilst the utility tax has been in effect since 2013, obliging operators to pay HUF125 tax per metre of fixed broadband network infrastructure (with reduced rates for network lengths of less than 300,000 metres), albeit an incentive was introduced in June 2015 exempting new or upgraded 100Mbps-plus networks from utility tax for five years from the date of service commencement.

Hungary, Magyar Telekom

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