Communications Authority caps SMPs' wholesale broadband prices
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[June 22, 2006]

Communications Authority caps SMPs' wholesale broadband prices

(Hungarian News Agency Via Thomson Dialog NewsEdge) Budapest, June 22, 2006 (MTI-ECONEWS) - Hungary's National Telecommunications Authority (NHH) introduced a new pricing system for the five biggest companies on Hungary's broadband internet (ADSL) market which requires them to base their wholesale prices on average retail prices as of Thursday, Daniel Pataki, president of the authority said on Thursday.



With the measure, NHH aims to boost competition on the market in the interest of lower prices.

Under the regulation, the five Significant Market Powers -- Invitel, Hungarotel, Emitel, Magyar Telekom and Monortel -- have to use a so-called "retail minus" pricing method to calculate their wholesale prices, so other internet service providers can avail of wholesale services, allowing them to enter the market with competitive ADSL offers.



The NHH also decided that the five companies also must provide national access to other internet providers, in order to generate competition in areas where at present there is no choice beyond the respective landline service provider.

NHH noted that of the 450,000 broadband ADSL subscriptions at the end of March, more than 90pc were subscriptions in the service areas of Hungary's incumbent telco Magyar Telekom or Invitel.

The new regulation caps wholesale broadband prices through deducting 15-30pc from the retail prices charged by the five SMPs.

Initially, the actual caps are based on the retail prices charged by the five companies in the first half of 2005. NHH will, however, review the calculations in a month, based on H2 2005 prices. Another adjustment will follow in September, to H1 2006 retail prices, to be followed by regular reviews in every six months.

Mr Pataki said they do not expect monthly ADSL subscription rates to fall under HUF 5,000 yet, but prices in different parts of the country will become closer to each other. The new regulation should cause a significant rate fall in 15pc of the total service area, he said.

(HUF 100 = EUR 0.3741)

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