Press Releases

Budapest, January 17, 2000

In 2000, MATÁV will increase its official telephone tariffs by approximately 3.5 per cent (3.57%) on annual level. This increase is about 6-7 per cent lower than the actual rate of inflation, or 2,5-3,5 per cent lower than the inflation forecast for 2000 (6-7 per cent) and less than half of the raise approved by the relevant KHVM decree (8,9%).

Official tariffs are set by appropriate KHVM regulations that are mandatory both for MATÁV and the other concession telephone companies. The new KHVM tariff regulation comes into force on February 1, 2000.

MATÁV substantially decreases its usage fee consisting of call charge and call setup fee: local call charges will be cut by over 14 per cent in the daytime period while domestic long distance and international call charges will go down by an average 9 and 12 per cent respectively. Regional call charges will experience the most favorable change: these will be an average 34.3 per cent lower and will thus match local telephone rates. This will be especially advantageous for country subscribers making calls with identical area codes, i.e. calls remaining within the same primary area.

Call charges of the Company - calculated using the seconds based billing which was introduced the first time in Hungary by MATÁV - will decrease by an average 11.4 per cent , and will not increase in any direction or period of the day.

Call setup fee will decrease from HUF 8.25 gross to HUF 7.50.

International call charges will go down as of February 1, 2000 by an average 12.2 per cent so calls will be much cheaper practically to every country. The tariff decrease will be the most significant to the West European region and North America. For example, calls to all the neighboring countries will be 9 per cent cheaper, to Germany and other European countries 13.9 per cent cheaper and to the United States and Canada 13.5 per cent cheaper.

From February 1 monthly subscription fees will go up by 49.9 per cent. The monthly subscription fee of a residential main line will be HUF 755 more, raised from the current HUF 1512.50 to HUF 2267.50 including VAT. The increase for business lines will be HUF 1012.50. With this higher than average increase of subscription charges we intend to bring subscription fees closer to the actual costs of line maintenance. This increase makes possible for MATÁV to cut usage charges.

It may not be generally known that the most significant part of telecommunication service provision costs is fixed costs, i.e. network maintenance and operating costs. In the countries with advanced telecommunications systems, rates were traditionally shaped to include higher monthly subscription fees and lower usage fees. This structure makes it possible to have cost-based call charges. Usage fees are not burdened by excessive network maintenance costs, so call charges and call set-up fees decrease markedly. This tendency of tariff rebalancing is in line with the telecom tariff structures of the advanced countries, it is an important requirement of the upcoming fully-fledged liberalization of the telecom market and the development of a competitive environment.

As a new feature, we will launch the 'Security' package for our residential customers. The package is designed specifically for subscribers who want to be accessible at any time but themselves make few calls. Those who order the Security package will be charged the 1999 subscription fee in 2000, too. Up to HUF 200 they will be charged the reduced rates whereas above this amount a triple usage fee (containing call charge and call setup fee) will be charged. With this solution accessibility is provided for everyone for a reasonable price, since the lower fixed costs make possible for subscribers to control themselves the amount of their telephone bills.

MATÁV discounts on local and local-rate calls remained the same as last year, that is customers using ordinary lines or ISDN for calls or Internet will pay HUF 150 independent of the duration of the call within the specified period. In the case of customers using residential ISDN lines the counter stops at HUF 200. As of February 1 as a consequence of the merging of local tariff zone and regional tariff zone I, this discount is granted automatically to subscribers for significantly more numbers.

Just as in 1999, subscribers will be offered the option of cutting their telephone bill in 2000, too by ordering the Favorite Numbers or Favorite Number NET package.

Favorite Numbers Package: 15% discount is allowed on calls made to three selected numbers against the payment of a gross monthly fee of HUF 300. At least two of the three selected numbers have to be in Matáv's service area, and the third must be a fixed-line domestic telephone number.

Favorite Number NET: This package satisfies the needs of customers with substantial Internet usage: they are offered 80% discount on the charge of calls made to a local-rate number, against payment of HUF 8 000 gross monthly fee.

Both favorite number packages apply irrespective of the duration of the calls but do not apply to the call set-up fee.

Calls from the public payphones may invariably be initiated with phone cards of HUF 800 and HUF 1800 and coins, at rates lower than in 1999. The pulse tariff to be applied for public payphones will remain gross HUF 20 in 2000 as well.