Press Releases

Budapest, May 22, 2003

The Communications Arbitration Committee (HDB) has approved the so-called MARIO, Matáv’s new reference network interconnection and leased line offer calculated in line with the rules accepted in the EU. Newly approved interconnection fees represent an average decrease of 18%-37% in comparison to the previous fees. Matáv has accepted HDB’s standpoint, in line with the usual procedures, and is doing its best to achieve an ongoing reduction of interconnection service fees prior to Hungary’s EU accession so as to approximate the relevant indicators of the European Union.

As prescribed by the Hungarian Telecommunications Act, as of January 1, 2003, service providers with significant market power have to apply the so-called long run incremental cost (LRIC) calculation in respect of their reference interconnection and local loop unbundling offers. In line with this, Matáv was the first company that applied the method that is generally applied in the EU and filed a new reference interconnection offer (MARIO) on November 4, 2002. Having been identified as a significant market power in the leased line market, Matáv amended its offer to include reference leased line interconnection services. The new interconnection fees will be applied retrospectively from January 1, 2003, depending on the bilateral network agreements concluded between Matáv and other operators.


Main characteristics of the approved offer

- The model is based on three tiers: local, regional and national. Interconnection rates are structured accordingly to differentiate between local, regional and national origination and termination fees.
- In order to qualify as a National Network Operator (NNO), an operator must have at least three points of interconnection in 3 out of the 10 secondary switches placed in the regional zones, ensuring that infrastructure-based competition is supported. In the case of non-NNO competitors, Matáv can request the Arbitration Committee to allow a maximum of 20% upper divergence from RIO based interconnection (IC) fees.
- If a service provider has direct access to a local area within a region (Budapest is divided into 14 local areas), it may interconnect at local interconnection fee in the local zone of the given region. However, other areas without direct access are accessible at regional or national interconnection fees.
- Some access services such as blue and green number services do not fall within the scope of the reference offer.


Main characteristics of the amendment regarding Reference Leased Line Services

Interconnection leased line services encompass the following types of services:
- Two types of IC leased line links with a bandwidth of 2 Mbps, with which the two service providers (Matáv and the eligible service provider) interconnect their core leased line networks.
- Half-circuit leased line IC services are differentiated according to three different distances (local, regional and national); providing 2 Mbps bandwidth on Matáv’s existing leased line network.
- With respect to reference leased line services, installation fees are HUF 93,602 and HUF 59,444, respectively. Monthly fees for the different services vary between HUF 64,000 and 303,000.


Traffic pricing

The table below sets out the new and former per minute interconnection rates excluding VAT.

Changes in the interconnection fees (peak period)


Local origination fee:
Peak - new: 4.48
Peak - old: 5.44
Change: -0.96

Regional origination fee:
Peak - new: 5.94
Peak - old: 6.46
Change: -0.52

National origination fee:
Peak - new: 6.89
Peak - old: 8.32
Change: -1.43

Local termination fee:
Peak - new: 3.93
Peak - old: 5.07
Change: -1.14

Regional termination fee:
Peak - new: 5.38
Peak - old: 6.09
Change: -0.71

National termination fee:
Peak - new: 6.34
Peak - old: 7.95
Change: -1,61


Changes in the interconnection fees (off-peak period)


Local origination fee:
Off-peak - new: 1.65
Off-peak - old: 2.03
Change: -0.38

Regional origination fee:
Off-peak - new: 2.19
Off-peak - old: 2.41
Change: -0.22

National origination fee:
Off-peak - new: 2.54
Off-peak - old: 3.11
Change: -0.57

Local termination fee:
Off-peak - new: 1.45
Off-peak - old: 1.90
Change: -0.45

Regional termination fee:
Off-peak - new: 1.99
Off-peak - old: 2.27
Change: -0.28

National termination fee:
Off-peak - new: 2.34
Off-peak - old: 2.97
Change: -0.63

- As of February 15, 2003, the access deficit surcharge additionally applicable to the above listed origination and termination interconnection fees decreased to HUF 1/min from HUF 2/min.
- The combined impact of the recently approved interconnection fees and the change in the access deficit surcharge will be a 18%-37% decrease in tariffs compared to the former levels. Matáv estimates the combined average tariff reduction to be around 17%, without the change in the access deficit surcharge.
- The cost based regional and national transit fees decreased to HUF 1.18/min and HUF 1.92/min, respectively, for both peak and off peak from HUF 1.21/min and HUF 2.41/min.


Pricing of related services

- The monthly fees for the IC link have decreased by 11%-18%, while the IC link one-off installation fee increased by 120%. Cabinet charge decreased by 17%.
- The average of the monthly and the one-off charges for collocation remains practically unchanged with an increase in some of the charges such as operating costs, and a decrease in others including several collocation monthly fees.
- The one-off interconnection test fees decreased by 4% and 11%.
- Fees for pre-selection and call-by-call services decreased (except for the general pre-selection investigation fee). The one-off installation fee decreased by 81%, the monthly fee by 12%, and the one-off pre-selection installation fee per subscriber decreased by 4%.

Matáv has accepted HDB’s standpoint, in line with the usual procedures, and is doing its best to achieve an ongoing reduction of interconnection service fees prior to Hungary’s EU accession so as to approximate the relevant indicators of the European Union.