Press Releases

Budapest, January 24, 2001

In 2001 MATÁV is raising its regulated telephone tariffs 3.18 percent on the annual average. This is about one third of the average inflation in 2000 (9.8%) and slightly more than half of the expected inflation in 2001 (according to Government forecast: 6%).

The Prime Minister's Office is responsible for fixing regulated tariffs. At the press briefing held yesterday in the Office of the Government Commissioner for IT it was announced that the new Tariff Decree would enter into force on February 1, 2001.

Matáv's new tariffs include a significant decrease of usage charges, that consist of minutes of use charge and switching fee, on the average by 10.2%. This includes an average 6.4% fall in local tariffs and 14% and 15% reduction of national long-distance and international call tariffs, respectively. The greatest benefit is in respect of switching fee that will be decreased by 36.7%. The company will make its tariffs simpler and more transparent. The current three time zones will be replaced by two: peak zone (7 a.m. to 6 p.m.) and off-peak zone (6 p.m. to 7 a.m., weekends and holidays).

The switching fee will be reduced from HUF 7.50 to HUF 4.75 (including VAT).

Local call peak tariffs remain unchanged (HUF 9 including VAT), while off-peak tariffs increase to HUF 4.50. However, the charge of an average length call will be lower due to the significant fall in the switching fee.

MATÁV is introducing special Internet tariffs in its service area: from February 1 calls to any Internet service provider - on the 06 51 prefix - will cost HUF 7.50 (including VAT) in peak period and HUF 3.75 (including VAT) in off-peak period and no switching fee will be charged.

We agree with the statement made in a press release yesterday that cheap Internet represents the future of Hungary. This is supported by the fact that from February 1 - contrary to rumors - we will not cancel the HUF 150 limit, and the 'Mindenkinek' packages ordered earlier will remain operational at least until June to support Internet usage with unchanged conditions. New packages tailored to Internet users are expected to be offered from March. Current 'Mindenkinek' customers can change to these new package that will include at least as much discount as the current one. We are pleased to see a boom in Internet usage; last year Matáv's Internet subsidiary, Matávnet almost doubled its customer base. Another great achievement is that the free e-mail system operated by Matávnet has 500,000 users, giving half a million people access to a quick, modern way of connection. All these, in harmony with the Government's efforts promote a spectacular strengthening of the base for the creation of an information society.

National long-distance calls will be cheaper. The peak tariff will be reduced by HUF 3.75 to HUF 30 including VAT, the off-peak tariff will be HUF 15 per minute including VAT. International call tariffs will fall by 15% on the average from February 1, 2001, making calls substantially cheaper to most countries. The greatest decrease will be made for calls to Western Europe and North America.

For example the per minute tariffs of calls to Germany and other European countries will decrease by 19.4% to HUF 93.75 including VAT and by 21.9% to HUF 93.75 to the United States of America and Canada. This means that the charge of a call to the most frequently called overseas countries will be equal to a call to a European country. Tariffs of calls to neighboring countries will remain unchanged.

Monthly subscription fees will be raised: for residential main lines from HUF 2267.50 to HUF 2885 including VAT, while for business main lines from HUF 3050 to HUF 3875 including VAT. With the increase of monthly subscription fees over the average we intend to get subscription fees closer to actual line maintenance costs. Raising the subscription fees enables MATÁV to significantly reduce usage charges.

The public is not generally aware that a high proportion of telecommunications service costs are fixed costs covering maintenance and operation of the network. That is why in countries with developed telecommunications the tariffs have been restructured to have higher monthly fees and lower usage charges. This structure enables creating cost-based tariffs.

With this structure, usage charges do not need to cover huge network maintenance costs, so usage charges and switching fees can be reduced appreciably. This tariff rebalancing trend is in harmony with the telecommunications tariff structure of developed countries and is a precondition to the imminent full liberalization of telecommunications, i.e. the creation of a competitive environment.

In 2001 the low user package launched last year under the name 'Minimál' tariff package will remain operational. We offer this package to customers who use the telephone mostly to be accessible any time, but make few calls. If you order the 'Minimál' package you will pay a lower monthly subscription fee in 2001 too (only HUF 1612.50 including VAT). It means that if you choose the 'Minimál'' package you can save HUF 1272.50 on the subscription fee. Of course, the same lower usage charges will apply to 'Minimál' package customers, as well as two new benefits of this package: free Voice Mail service and selection of a number that can be called with the base tariff. With the free Voice Mail service the customer can have information about the share of the HUF 500 (including VAT) monthly limit offered under the 'Minimál' package that is still available in the given month. When the customer exceeds this limit the applicable usage charges and switching fees rise - according to last year's package - unless the customer uses the new feature that we offer and calls the fixed network number of the selected relative or friend. This number can be called even after having reached the HUF 500 limit for 66.7% discount calls with the lower tariffs of the 'Bázis' package. This package can be ordered on the free customer service number (1212) where the selected number can be specified and changed free of charge every three months. The comfort services can also be used with the 'Minimál' package.

The pulse tariff of coin-operated phones and public payphones remains HUF 20 including VAT. The costs of calls made from public payphones will rise by 4.6% on the average due to shortened pulse lengths.