Press Releases

Budapest, December 21, 2001

Matáv and Vivendi Telecom Hungary – making use of opportunities offered by law during the transitional period ending with the completion of the full liberalization of the telecommunication market under the Communications Act– modified their network contracts, which had been concluded in accordance with earlier regulations. The modification enters into force on 23 December 2001. This new agreement, made today, is the first interconnection agreement regulating network connections between two competing fixed line telecom operators, which observes the relating provisions of the new Communications Act - as far as this is practicable under the current circumstances.

By concluding the above contract the two companies established a framework in which (after granting the necessary authority licenses) they - for the first time in Hungary - enable their business and residential customers to directly select another telecom service provider, giving way to competition. In the future, customers may freely decide to stay with their current service provider or choose from among the services of Matáv and Vivendi for long distance and international calls. Customers may also choose to order all of their long distance calls from the new operator - but call-by-call carrier selection is also possible. Moreover, the two solutions may be combined according to customers’ decision.

Thus the customers of Matáv and Vivendi Telecom Hungary can enjoy the same benefits in long distance carrier selection as any other European customer. The networks enabling this freedom of choice have been built in the past 7 years, with an investment of several hundred billion HUF. This opens up a new chapter in the history of fixed line telecommunications in Hungary, based on the achievements of the exclusivity period - follow in the footsteps of the European Union.

In recent years, the two companies have gradually decreased their domestic long distance and international service tariffs. They expect an increase of their market as a result of these efforts and the current mutual market opening process - assuming the risks automatically incurred by competition. They expect that the authority price regulations will support a balanced competition expected to bring further benefits, in which the companies rely only on their own values and the services provided to their customers.

By signing the contract, the two companies clearly announce their commitment to seize the opportunities offered by the Communications Act and meet the liabilities thereof as soon as possible, to the benefit of their customers and owners. Preparation of the agreement was largely supported by the work of the Office for Government Commissioner in charge of IT and the Communication Authority in course of laying the foundations for market liberalization. These efforts were supported by the service providers through the provision of data and by communicating their positions.

As soon as the transitional period necessary to the procedures of the authority specified in the Communications Act (and in the related decrees on implementation so far passed) is over, the companies will be in a position to enter into a new interconnection agreement that takes full advantage of the opportunities offered by the new regulation, thus contributing to the broadening of competition.