Broadband providers slash prices as competition hots up

Despite ongoing pressure from the EU to farm out its network infrastructure to rival players, former state monopoly Magyar Telekom has inevitably been doing everything in its power to keep competitors out and keep prices as high as possible for as long as possible. At the same time, newer and smaller Internet service providers have been gradually chipping away at its margins and ratcheting up connection speeds wherever possible. This fall, some of them are taking an axe to the market with special offers that look likely to attract new broadband customers as well as existing Internet users.

First out of the blocks is Enternet, who is offering a special offer of a year's 512 kbps net access for Ft 43,200 (all prices are net of VAT), which works out at Ft 3,600 a month. Those that don't want to pay up front can sign up to receive the first four months of their Internet free, followed by a Ft 5,825 monthly fee. Both offers are available until September 15 and represent unprecedented value. According to economics daily Világgazdaság, which printed a table of competing prices in its Thursday issue, rivals see this as a highly risky strategy on the part of Externet. Nonetheless, they will be wary of losing too much market share.

One company taking a slightly different tack is TVnet. As well as beginning testing of its IPTV (on-demand television delivered via the Internet) services today, it last week launched ADSL3G+, which offers users in Budapest a 1024 kbps Internet connection for less that Ft 5,000, including sales tax (Áfa). The service does not use a phone line, which allows subscribers to eliminate their telephone subscription, a hefty monthly charge if they are with T-Com. Hungary's first Internet provider, GTS Datanet has promised to follow suite with a similar offering in September.

Another company, Actel has also entered the market with some slick marketing, offering high-speed Internet (3 Mbps) and fixed line telephony as a joint package for Ft 11,900, restricted to some areas of central Budapest.

T-Online, the Internet arm of Magyar Telekom, is also offering less expensive Internet these days, but its Ft 4,900 Start Plusz package has a download limit of just 3 GB, which can easily be exceeded in today's multimedia Internet. Unlike in markets like the UK, most competitors do not impose a limit on traffic, which makes for transparent prices. Looking further up through its range of unrestricted packages, no other provider matches T-Online on price - it is easily the most expensive.

However, existing customers of T-Online, who own the telephone lines along which the majority ADSL connections are made, should be aware that they take their time giving up their lines to their rivals. As a result, your connection may be down for as long as two weeks while you are reluctantly connected to a new provider. Aside from TVNet, which connects subscribers via its own lines, other ISPs are at the mercy of Magyar Telekom in this respect.

Another thing to watch out for is that most packages require customers sign up for at least a year, and small incentives are offered to those subscribing for longer. With prices likely to fall further it may be worthwhile opting for a one-year deal and awaiting further developments - particularly as plans are in the pipeline to offer free wireless Internet throughout Budapest.

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