There will be at least two mobile phone subscriptions for everyone in Hungary within five years, given an expectedly dynamic growth in the use of "linked objects", said Ove Fredheim, Chief Executive Officer of local mobile carrier Pannon, in an interview with Portfolio.hu. In retrospect, he believes the introduction of regulated roaming rates by the European Union benefited everyone, but does not see iPhone revolutionising the market of mobile operators.
Pannon is set to move into one of Hungary's most cutting-edge office building the company has built for itself, and which might be even put up for sale in the future. Meanwhile, the carrier could become market leader in Hungary, as the already cut-throat competition is looking to become even fiercer... 
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Portfolio.hu: In recent interviews, an increasing number of CEOs in the mobile industry said that the market benefited from regulated roaming rates introduced in the EU. This seems to contradict pre-introduction resistance against regulated rates. How do you evaluate regulated rates now, more than six months after these were put into effect? Ove Fredheim: It is like hearing my own opinion. But all joking aside, regulated prices are not welcome by any industry around the globe. Consequently, initial resistance was quite natural. Nevertheless, looking back you have to admit that retail price regulation introduced in the EU last August has really made market pricing a lot more transparent. It is good for customers because it simplifies the evaluation of service quality, and it is good for operators because it boosts cross-border mobile usage.
P.: How much revenue did Pannon lose exactly because of price regulation? O. F.: If our EU-based roaming volume was to be the same until August as it was last year, we would collect 48% less revenue from roaming. However, lower rates have encouraged our customers to use their phones more abroad, which means we do not expect such a sharp drop in revenues. As the price cut was substantial, we will surely see a decline but it will not be as large as earlier expected. Nevertheless, the impact can only be reliably assessed based on the results of a longer period.
P.: Do you expect the EU to radically intervene also in mobile data roaming rates? O. F.: As the EU wants to improve the transparency of pricing and boost usage in this segment, too, I expect Viviane Reding to introduce some sort of regulation. I do not think, however, that this would be similar to that used in voice roaming.
The regulation of voice roaming was based on retail prices, but the process of data roaming has a very different structure which makes me expect regulators to give a kick-start to market mechanisms from the wholesale side.
All international players had bilateral collaboration agreements in place for voice services, which is not the case with data roaming. As a result, retail price regulation would trigger some very strange trends in the market.
P.: Do you expect the omnipotent EU regulatory authority envisioned by Viviane Reding to be established? O. F.: This has been a hot issue recently, but I believe the specific features of national markets prevent the creation of a regulatory authority of this type. It remains to be seen, however, what the integrated telecom market will look like in ten years from now, but I do not consider this plan feasible in the foreseeable future.
P.: The launch of iPhone has ruffled feathers in the telecom market. Apple persuaded AT&T to share its revenues in return for exclusive distribution rights. Will this generate far-reaching changes, or is it just a passing whim? O. F.: Apple's iPhone is a major innovation. It is not only an excellent phone and music player, but it is also a real icon and a status symbol. Given this, we would be happy to sell iPhone in Hungary. I won't be disappointed though if we do not get a licence, as I expect other vendors such as Nokia or SonyEricsson to launch a similar product soon.
Revenue sharing is not a revolutionary thing in the industry. It has been used, for example, for simple ring tone download services before. I believe the iPhone will revolutionise the market of handsets rather than that of mobile operators. Our responsibility is to provide a suitable network infrastructure to support mobile digital content made increasingly popular by the widespread use of such handsets.
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