What new initiatives is Magyar Telekom currently involved in?
CHRIS MATTHEISEN: Myagar Telekom is in the middle of a pretty big network rollout at the moment. Something we haven't done so much in the last few years, but last year and the year before that we really focused on 4G and as a result of that, by the end of 2015 we're going to have 97% LTE coverage, which really puts us in the lead of a lot European companies. I think we are really in the top half-a dozen or so companies in all of Europe, with the 97% coverage.
In 2015, we put a lot more focus on the fixed line network. This is something where we've partnered with the government of Hungary to actually build out 30 Megabit per second household coverage for 100% of the households by 2018. This is something that we want to do two years ahead of the 2020 European digital agenda. We think it's really important to bring Hungary up and make Hungary competitive. We think that doing that is going to significantly boost the country's competitiveness.
As a start, we are going to build out about 440,000 homes primarily with fiber access. Now that's a significant chunk of the entire homes of the country. So we are going to go from about 1.8 million homes to about 2.2 million homes this year, covered with high-speed internet access. So I think network build outs, network rollouts, that's going to keep us pretty busy for a while.
What does a network buildup of this magnitude entail?
CHRIS MATTHEISEN: We have been working on a network modernization program for the last three, even more than three, years. So there's a lot of work that goes into rebuilding the network so that it operates with software defined radios and the like so that it can be adapted to 2G/3G/4G and any G that happens to come after that. We've been putting a lot of money into that. A lot of the money is going into licenses. You can't operate mobile networks without a license. And last but not least, we've been building up mobile infrastructure and fixed line infrastructure. So the money is going into the ground and into the air.
What is Magyar Telekom’s market share? How would you describe the competitive landscape in Hungary?
CHRIS MATTHEISEN: We are the undisputed, by far the market share leader in the market. We have about 46% share of the mobile market. And actually in every market that we are active in, we are the market leader.
Competition in Hungary is different from a number of other countries in Europe, because it's primarily infrastructure lay. So you have different providers competing by building out infrastructure. That's true on the mobile side and it's also true on the fixed line side. We have inherited the mantle of the old incumbent operator but it's a very strong cable market. So there's a lot of competing fiber and coax cable infrastructure in the market, competing with our ADSL/VDSL or fiber offerings.
In 2015, we put a lot more focus on the fixed line network. This is something where we've partnered with the government of Hungary to actually build out 30 Megabit per second household coverage for 100% of the households by 2018.
On the network side, one of the impacts of high infrastructure competition has been to drive the overall level of coverage and quality really very high. So if you travel to Hungary, if you roam here, I think you'll discover that the average throughput that you get for mobile, the average quality that you get, and coverage that you get on mobile is going to be higher than you find in a lot of other countries. That's a well-kept secret, I think, in the European context.
What steps are you taking to maintain profitability as the market moves away from voice and towards data?
CHRIS MATTHEISEN: We are gradually moving away from just a silo view of the customer. So we think of ourselves and we actually are an integrated operator. Integrated means, fixed, TV, fixed internet, mobile internet, mobile voice, and ICT services. Since we look at our business that way and we increasingly organize our self that way, we actually look at household ARPU. And what we see is household ARPU is definitely growing. At any given time that could be the result of higher fixed, or higher mobile, higher TV, higher ICT, but at any given time, if you look at the broad average, household ARPU is growing. And we think that's the direction that we have to take the company. That's where the opportunity is going to be, because opportunity is not going to be just in selling mobile all by itself. The opportunity is going to come in integrating mobile with fixed line, with ICT services. And if you have that kind of combination, we think of that as the basis of our differentiation and we think that's how we are actually going to build household ARPU and grow that in a positive way going forward.