Digi launches mobile service in Hungary after several delays

Free service with conditions

Digi is initially offering a single plan, exclusively to customers who are currently using at least one cable or satellite service. The discount offer has no minimum period attached and carries no monthly fee, with customers only charged for the services used. Unlimited data is also offered for free, as well as calls made and texts sent within Digi's network, while calls made to landlines or other mobile networks in Hungary or the EU (with the exception of certain EU carriers) cost HUF 5 per minute. (The unlimited data plan is actually capped at 50 GB, after which Digi may restrict the bandwidth to 256 kbps.)

Coverage still improving

Although Digi has outdoor coverage in most towns and cities as well as on all major motorways, it will initially only offer its commercial service in locations where its indoor coverage is in an advanced state. The company is working on expanding its coverage. Based on current data, the mobile service is presently available in few locations, mostly in the Eastern part of Hungary. Digi customers can use a 2G and a 4G network as well as the VoLTE network for broadband internet voice calls and VoWiFi for voice over Wi-Fi, both of which are under development.

Branded phones accompany launch

Digi will also offer a selection of handsets offered under its own brand, the DIGI C1, R1 és K1 models.

Digi already a major telco

Even before entering the mobile market, Digi had been a major player in Hungary's telecom market, especially after it bought Invitel's retail division. The deal, announced in 2017 and approved by the competition watchdog in May 2018, meant Digi overtook Magyar Telekom as the top cable TV provider in Hungary and rose to second in the cable internet and landline phone segments.

The acquisition propped up Digi's results as well. In Q1 2019, landline subscriptions were 78% higher than a year earlier at 689,000, cable TV grew 37% to 692,000, while the number of cable internet users rose 58% to 753,000, although these figures also include organic growth of 4,4%, 9.2% and 5.7%, respectively. In Q1, Digi collected revenue of EUR 55 million (cca. HUF 17.5 billion) in Hungary, 47.5% higher than a year earlier, also helped by higher internet service fees and a new optical network. The Hungarian operation now accounts for 20% of the Digi Group's revenue.

Re-slicing the cake

Digi is entering a market that has had three players for the past decades. The market shares of Magyar Telekom, Telenor and Vodafone typically changed just one or two percentage points each year, with Vodafone slowly catching up to second-placed Telenor behind market leader Magyar Telekom, which holds 45% of the market by SIM cards used for calls.

By SIM cards used for data, the two are even closer as Telenor had 27.25% of the market at the end of last year and Vodafone had 26.76%

The general expectation is that Digi will try to acquire a slice of the cake by underpricing its competitors. For comparison, Digi's ARPU (average revenue per user) in Romania, where it is market leader with 3.4 million customers, is just EUR 4.9 or HUF 1,600, significantly lower than that of the three incumbents in Hungary.

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• mobile