By Gergely Szakacs
BUDAPEST Feb 21 Deutsche Telekom
will invest at least a billion dollars in Hungary over the next
few years on a nationwide high speed internet network, Chief
Executive Timotheus Hottges said on Friday.
Hottges and Prime Minister Viktor Orban agreed on Friday to
give every Hungarian household access to the broadband network
by 2018, under a deal which also involves government and
European Union support.
Deutsche Telekom owns 60 percent of national telecoms
company Magyar Telekom, which competes in mobile
services with Britain's Vodafone Group, Norway's Telenor
ASA as well as cable group Liberty Global's
unit UPC Holding.
"Deutsche Telekom will invest several hundred billion
forints in Hungary over the next few years," Hottges told a news
"Within the right regulatory framework, a framework that
also includes government and EU support for underdeveloped
areas, we are willing and able to develop high-speed broadband
internet access for all Hungarians."
A spokesman for Magyar Telekom later said that the
investment plan covers both fixed and mobile broadband services,
and that so far about 60 percent of Hungarian households have
access to some kind of broadband connection.
Shares in Magyar Telekom were down 5 percent at 326 forints
by 1400 GMT, valuing the company at around 339 billion forints
($1.5 billion), after traders said the company had dismissed a
market rumour that it would increase its stake.
Telecommunications is one of several industries, along with
energy and banking to be hit by special taxes since Orban swept
into power in 2010 as part of his government's drive to cut the
nation's budget deficit to European Union limits.
"In the last few years we sometimes felt that the setting
was not as investment-friendly as we had wished and that the
dialogue could be improved," Hottges said.
However, following "developments" last year and his talks
with Orban on Friday, Hottges said Deutsche Telekom now looked
ahead with "great optimism."
Last year Orban suggested telecoms firms might be able to
reduce their tax bills by making investments that supported the
In Deutsche Telekom's 20 years in Hungary, Magyar Telekom
has invested 1.8 trillion forints ($8 billion) and with an
annual tax bill of 140 billion forints it is among the top
taxpayers, Orban said.
Magyar Telekom's capital expenditure totalled 117.4 billion
forints in the first nine months of 2013, boosted by payments to
renew its radio spectrum licences both in Hungary and in
Macedonia. Its net profit for the first nine months fell by 40
percent to 23.2 billion forints.
It employs 12,000 people directly and gives work to another
100,000 through suppliers.
Shares in Magyar Telekom were down 3 percent at 332 forints
by 1204 GMT on Friday.