Investor Releases
Investor release on tariff decree
January 25, 2002
Matáv (NYSE: MTA.N and BSE: MTAV.BU), the leading Hungarian telecommunications service provider informs its investors that the Hungarian Prime Minister's Office has disclosed the decree on public voice telephone service and universal telecommunication service tariffs to be applied to telecommunication service providers with significant market power.
Commenting on the new tariff structure, Matáv CFO dr. Klaus Hartmann said, "This decree establishes a tariff framework that will enable fixed voice market participants including Matáv to operate in a predictable and transparent environment for the next three years. "
According to the decree, revenue weighted tariff increases are capped by an average of 4% in 2002 and CPI minus 3% in 2003 and 2004. The benchmark used in the formula is a forward-looking CPI set by the government. If the actual CPI exceeds the previously set CPI by more than 1 percentage point, the price cap can be adjusted in the following year by two-thirds of the difference.
Within the formula, monthly residential subscription fees and local fees are assigned specific caps as well.
Subscription fees will be allowed to increase by 4% from February 1. The increase of the basic residential subscription fees for analogue main lines are limited to increase by an additional maximum of 3% from July 1, 2002 In 2003 and 2004 the average increase in this basic residential subscription fee is required to be less than 10% per year.
Local fees (including the call set up charge and per minute fee) can be increased by a maximum of 5% in the second half of 2002 and by an average of 6% in each year of 2003 and 2004.
All fees not specified above May be increased from July 1, 2002 however the overall increase must remain within the price cap.
The price cap formula includes fixed to mobile tariffs but excludes Internet call charges, which are regulated by another decree already disclosed.
The full decree can be found in the Hungarian Official Gazette, ('Magyar Közlöny') vol. 2002/8.