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SPECIAL REPORT:

rt 3Special Repo

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Telecommunications Hungary’s big three still

dominate market

 11

Telcos urge stricter rules

for prepaid SIMs  16

Future networks

TELECOMMUNICATIONS

BUSINESS JOURNAL while, even as 4G will be around for a prototype 5G 4G+ augments it, but the built. Expect network has already been in Budapest it to come to working life around 2020.

VOL. 24. NUMBER 20

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OCTOBER 28, 2016 – NOVEMBER 10, 2016

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NEWS

Fall back on Sunday Don’t forget Hungary (and the EU) says goodbye to summertime at 3 a.m. on Sunday (October 30), meaning the clocks go back and we all get an extra hour in bed.

2 BUSINESS

More red tape for EU postings Rules on postings across the Union have changed, bringing an increase in the regulatory burden for employment abroad and potentially severe financial consequences for failure to observe, PwC warns. 7

NEWS

Unconventional tools to return?

5G is on the way, and Ericsson Hungary managing director Roland Jakab, says this country’s R&D experts are making substantial contributions. 17 SOCIALITE

BBJ_2420_news.indd 1

BUSINESS

With the base rate of the National Bank of Hungary again left unchanged, monetary conditions should loosen further, analysts agree following the latest MPC ratesetting meeting. 3

SPECIAL REPORT

Exploring Jewish Budapest

Allowing firms to stand again

DIGI and the mystery of its frequencies

A look at the vibrant contribution the Jewish community made to life in Budapest, despite persecution going back as far as the 13th century, and a Penthouse-posing poet. 20

EY Hungary has been advising the European Bank for Reconstruction and Development and the National Bank of Hungary on best practices for financial restructuring. 6

DIGI’s satellite and cable television services have been gaining ground fast, but it still, two years on, has to show its hand when it comes to mobile phone provision. 15

2016. 10. 26. 21:46

www.bbj.hu

Budapest Business Journal | October 28 – November 10, 2016

SPECIAL REPORT:

SUBSCRIPTIONS

3Special Report

BBJ

Telecommunications Hungary’s big three still

dominate market

 11

Telcos urge stricter rules

for prepaid SIMs  16

Future networks

TELECOMMUNICATIONS

BUSINESS JOURNAL even as 4G will be around for a while, prototype 5G 4G+ augments it, but the built. Expect network has already been in Budapest it to come to working life around 2020.

VOL. 24. NUMBER 20

BUDAPEST

HUF 1,250 | €5 | $6 | £3.5

5G visionaries

OCTOBER 28, 2016 – NOVEMBER 10, 2016

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

NEWS

Fall back on Sunday Don’t forget Hungary (and the EU) says goodbye to summertime at 3 a.m. on Sunday (October 30), meaning the clocks go back and we all get an extra hour in bed. 2

Call +36 1 398-0344, or email circulation@bbj.hu Budapest Business Journal 1 year HUF 27,500+VAT 6 months HUF 13,750+VAT 3 months HUF 6,875+VAT

BUSINESS

More red tape for EU postings Rules on postings across the Union have changed, bringing an increase in the regulatory burden for employment abroad and potentially severe financial consequences for failure to observe, PwC warns. 7

NEWS

Unconventional tools to return?

5G is on the way, and Ericsson Hungary managing director Roland Jakab, says this country’s R&D experts are making substantial contributions. 17 SOCIALITE

BUSINESS

With the base rate of the National Bank of Hungary again left unchanged, monetary conditions should loosen further, analysts agree following the latest MPC ratesetting meeting. 3

SPECIAL REPORT

Exploring Jewish Budapest

Allowing firms to stand again

DIGI and the mystery of its frequencies

A look at the vibrant contribution the Jewish community made to life in Budapest, despite persecution going back as far as the 13th century, and a Penthouse-posing poet. 20

EY Hungary has been advising the European Bank for Reconstruction and Development and the National Bank of Hungary on best practices for financial restructuring. 6

DIGI’s satellite and cable television services have been gaining ground fast, but it still, two years on, has to show its hand when it comes to mobile phone provision. 15

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THE EDITOR SAYS

Summer all year round?

The end of Central European Summer Time (CEST) inevitably spurs debate about the benefits of Daylight Saving Time and the need for it. But the idea that we put the clocks back an hour at 3 a.m. on Sunday, thus gaining an extra hour’s sleep, seems to have prompted one Hungarian political party to wonder if we are even in the right time zone.

According to online news portal index.hu, the far right Jobbik party, has gone as far as submitting a proposal to the Hungarian Parliament to introduce Eastern European Time (EET) in the country. The idea comes from Jobbik MP Lajos Kepli, who says that the switch would be more cost-effective than the current system and would improve mental health.

Hungary, in line with the vast majority of EU states, operates on CET, one hour ahead of Universal Coordinated Time (UTC). Since 2011, EU states have applied Daylight Saving Time (DST) during the summer (hence CEST), putting the bloc two hours ahead of UTC for that period.

The EU also ensured that all states change from winter time to summertime (and back again) on the same date.

AT UTC plus two, CEST falls into the same time zone as EET (used in the winter by Bulgaria, Estonia, Finland, Greece, Latvia, Lithuania, Moldova, Romania and Ukraine, though they too apply daylight saving in the summer months). The Jobbik proposal is that Hungary would remain at UTC plus two hours throughout the year, with the party arguing this would save on energy costs.

But while it is true it would give more sunlight hours in the afternoon, it would also mean Hungarian schoolchildren would be going to school in the dark for much of the winter.

Daylight saving seems to have been unpopular ever since it was introduced on both sides of the Atlantic during World War I, in an attempt to preserve resources.

There is an urban myth that farmers supported DST and it was introduced for their benefit. In fact, farmers successfully lobbied against its adoption in the United

States from the end of World War II until 1966. The auto and fuel industries do like it, however. People are more likely to go out on the longer summer evenings, and they tend to drive. Some scientists believe the changing of the clocks interferes with the internal circadian rhythms of the body, disrupting sleep patterns (this may also be why dairy farmers, in particular, do not like DST, claiming it interferes with their cows’ milk production). There’s evidence suicides go up in the immediate aftermath of clocks going forward, although it drops by a similar amount when the clocks go back.

Most people, if they think of it at all, argue that DST must bring energy savings. But it seems that might not always be true. A famous study was done in Indiana in 2006; the state was switching from a mix and match approach to DST – some counties used it, others did not – to a state wide adoption, which made it possible to do a before and after comparison. This found that lighter evenings did, indeed, mean less use of lighting. But the savings were more than offset by an increased use of air conditioning on summer evenings, and heating on early winter mornings.

This is not the first time Jobbik has floated the idea of what would effectively be permanent summer time.

It was even debated back in April, but index.hu says Lajos Fónagy, state secretary in charge for energy policy, rejected the idea then, insisting that the annual move from CEST to CET has more benefits for Hungary because “most of our trading and business partners” belong to this group.

And therein lies the biggest hurdle for Jobbik. There are plenty of people opposed to DST as a principle, but no state is going to be a standout country and make a switch when it would put it on a different time zone from most of its trading partners. And for all Hungary has been “Opening to the East”, most of its trade is done firmly within the CET time zone.

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Then and now In the run up to the approaching celebrations honoring the dead in Hungary, Budapest’s Kerepesi cemetery, one of the oldests here, becomes a much more frequented place. The black and white photo above dates from the 1890s, and shows the mausoleum of Lajos Batthyány, the first Prime Minister of Hungary who was executed by firing squad in Pest on 6 October 1849, on the same day as the 13 Martyrs of Arad, the Hdefeated Hungarian generals executed by the Austrians. Today, the monument has received a slight facelift, and the surroundings have gotten busier and greener.

2016. 10. 26. 21:46

1 News BBJ

macroscope

NEWS

Hungary nurtures plans to strengthen military

4

NEWS

Pro and anti-government groups clash at ʼ56 event  5

Further unconventional tools to be deployed

With the base rate of the National Bank of Hungary having been left unchanged, monetary conditions should loosen further, analysts agreed following the latest rate-setting meeting of the Monetary Policy Council.

ZSÓFIA CZIFRA

In accordance with expectations, the MPC of the National Bank of Hungary (MNB) kept the key rate unchanged at 0.9% at its latest rate-setting meeting, but it lowered the upper end of the interest rate corridor to 1.05% from 1.15%, and left the lower end unchanged at -0.05%.

The base rate has stood at its current record-low level since May 25, and the latest GDP and inflation data did not do anything to make the MNB rethink its stance on monetary policy. Therefore, it is more than likely that the current 0.9% will be around for the foreseeable future.

Monetary conditions, however, are likely to loosen further.

Lowering the upper end of the interest rate corridor, which is the interest rate on overnight collateralized loans, was necessary because the forint liquidity of the Hungarian banking system has significantly decreased lately and banks’ net placement in overnight instruments was negative on several occasions. That means commercial banks were more active on the borrowing side of the MNB, so banks can fulfil their short-term liquidity requirements on the overnight market.

The narrowing liquidity of the banking sector has been fine-tuned by the MNB through several instruments, for example, announcing two EUR/HUF swap tenders to the value of HUF 400 billion, Gergely Suppan, analyst with Takarékbank, reminded market watchers in a comment.

According to him, the central bank has already signaled that its rate-cutting cycle is over, because a looser-thanexpected monetary policy can stimulate economic growth sufficiently and, at the same time, the 3% inflation target can also be met. However, the analyst noted, the MNB wants to influence its monetary policy by limiting the access to its threemonth deposit instrument: depending on the limits to be introduced in October, significant amounts of free liquidity might be transferred to the interbank market and to the state securities market. There will be a downward pressure on these markets, which means that the effective yields might be lower than the key rate, therefore the MNB will be able to loosen monetary conditions further without lowering the key rate. According to Suppan, the central bank is more likely to maintain the current level of the key rate for an extended period of time. “We expect that the interest rates

BBJ_2420_news.indd 3

will remain unchanged until mid-2018, while the importance of interbank interest rates might grow. The inflation target will probably not be met before mid-2018, and this, together with the sharp decrease in external debt and vulnerability supports the low interest rates. The ongoing quantitative easing of the European Central Bank, and the ever delayed ratelifting by the Fed also supports the current key rate level, Suppan said.

“The Hungarian Monetary [Policy] Council kept its policy rate unchanged today but made various small tweaks to its toolkit in an effort to loosen monetary conditions, and with growth and inflation set to remain weak, the MPC will probably turn to straightforward interest rate cuts in the next 3-6 months,” William Jackson of London-based Capital Economics told portfolio.hu after

the MPC’s rate-setting meeting. “Despite leaving the policy rate unchanged, the central bank is clearly in an easing mood,” the analyst said, detailing that the interest rate on the (rarely-used) overnight lending rate was lowered by 10bps, to 1.05%, and commercial banks’ required reserve ratios were cut from 2% to 1%, both of which should loosen monetary conditions.”

Surplus liquidity These tweaks follow the announcement at last month’s MPC meeting that the national bank would cap the total amount of banks’ surplus liquidity that it would sterilize via the three-month deposit facility to HUF 900 bln by year-end, from HUF 1.6 trillion at the time of the meeting. In theory, that could loosen monetary conditions if commercial banks place the excess reserves that can no longer be deposited in the three-month facility in the overnight deposit facility, which has an interest rate of -0.05%. In practice, however, the cap on sterilization operations doesn’t, so far at least, appear to have had much impact on monetary conditions. Since last month’s Council

Hungary ‘frustrated’ by CETA collapse

Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó shakes hands with Canadian Senator George Furey in Ottawa on October 24. Szijjártó said Hungary is “frustrated” by the holdup in the signing of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) at a press conference that day. “Who can we sign a trade agreement with if not Canada?” Szijjártó was quoted as saying. “It would be in the clear interests of Hungary, the Hungarian economy and Hungarian enterprises for the free trade agreement between the European Union and Canada to be signed as soon as possible,” he added.

(Photo: MTI/KKM/Árpád Szabó)

NUMBERS TO WATCH IN THE UPCOMING WEEKS Inevitably, the most important macro data of the next two weeks will be the industrial production figures for October, to be released on November 8. On the same day, the Central Statistics Office (KSH) will also publish October inflation data. The first estimate of retail trade figures for September will be out on November 7. A few days before that, we’ll see how the rather weak construction sector progressed in the first three quarters of the year, as the number of construction permits will be released for this period by the KSH.

meeting, overnight interbank interest rates (BUBOR) have actually risen, while longer-term interbank rates have fallen only a little (by 6-7bps), Jackson noted.

On the usual accompanying statement released by MNB after its rate-setting meeting, the London-based analyst noted a “subtle shift” in the language which suggests that the MPC may revert to conventional rate cuts if it decides to ease policy further. Last month’s statement mentioned that further easing (if warranted) would come via a smaller cap on three-month deposit operations, while this month’s statement made no mention of the possible tools that might be used to ease policy. The Capital Economics analyst thinks that inflation will remain below the 3% target in the forecast horizon.

Gergely Ürmössy, head analyst at Erste Bank said that the statement released by the MPC refrained from touching the formal three-month policy rate and aims to ease financial conditions by deploying unconventional measures. “We believe that by limiting the 3M deposit and providing additional forint liquidity to the market, the downward pressure on local interest rates and bond yields may intensify, especially on the short-dated ones,” Ürmössy said.

At the rate-setting meeting on October 25, the reserve requirement ratio was cut from 2% to 1%. This means that approximately an additional HUF 170 bln will flood the local money market.

“This was definitely a surprise move,” Ürmössy noted. This shows that MPC likes to surprise markets and is willing to do anything in its power to meet its goals of lower rates and weaker forint.

“The unpredictability and uncertainty stemming from it implies that interest rate, bond yield and exchange rate volatility should become elevated,” Ürmössy said.

2016. 10. 26. 21:46

www.bbj.hu

04 News

Budapest Business Journal | October 28 – November 10, 2016

NEWS IN BRIEF OLAF suspects 24 frauds in Hungary since 2012

OLAF, the European Anti-Fraud Office, has found 24 suspected cases of fraud, fiscal fraud and misappropriation in Hungary since 2012, and has made recommendations to the Chief Prosecutorʼs Office to investigate them, the latterʼs spokesman Géza Fazekas told Hungarian news agency MTI on October 24, after the office brought charges in one such case. The Chief Prosecutorʼs Office filed charges of suspected fiscal fraud against two directors of a company located at Lake Balaton who allegedly received EUR 178 million of EU and Hungarian budget grants for the purchase of forestry equipment, the costs of which, an OLAF investigation showed, could have been magnified through false invoices.

Mentioning two other cases in which his office initiated court proceedings after OLAF warnings, Fazekas said one person had been sentenced to one year in prison, suspended for two years, while an accomplice was fined in an

appealable ruling, in a case involving misappropriation of funds in a project related to printing machines. The other case Fazekas mentioned involved a person with three accomplices, who were reported to have used false documents and invoices to draw HUF 110 mln in funding for the upgrade of a “hydrotherapy treadmill” for dogs, a project which was eventually not realized.

Christian Democrats propose new Sunday closing Just a few months after legislation restricting retailers from opening on Sundays in Hungary was repealed, with retail sales experiencing a pickup since, junior governing partner the Christian Democratic Peopleʼs Party (KDNP) is said to be proposing to reintroduce Sunday closing two days a month, according to reports. Csaba Bubenkó, chairman of the Independent Union of Retail Workers, told government-friendly daily newspaper Magyar Idők that the amendment could be brought before

Parliament by December at the latest.

According to the daily, under the changes two Sundays a month should be given to workers in the retail sector as days off, while no retail worker should work more than eight hours on a Sunday.

Exchange students mistaken by public for refugees The Hungarian Police were called out to intercept a group of foreign exchange students who were participating in the Erasmus program in Hungary, and were mistaken for refugees near Hungary’s southern city of Szeged, according to Hungarian online news portal Délmagyar.

The student group comprised of Estonians, Latvians and Slovenians is visiting the Hungarian refugee NGO MigSzol. As part of an excursion program, the students were following the route taken by refugees crossing the country in 2015, when the migrant crisis peaked in Hungary. It was while walking along the railway tracks connecting Serbia’s Subotica and Hungary’s Szeged that the students were mistaken for refugees and a report was made to local police that “25 migrants were walking along the rails”, Délmagyar reported. As prior notice of the students’ excursion had been given to the police, officers arriving at the scene found there had been no breach of the law, and allowed the students to continue on, Délmagyar added. Since the Hungarian government built a razor-wire fence along its entire Serbian border last year, most refugees fleeing war or poverty and arriving in Europe now bypass Hungary as they try

to reach their preferred destinations in the EU’s northern states.

Hungary nurtures plans to strengthen military The Hungarian Defence Forces are planning to train 20,000 volunteer soldiers from January 2017, after the country’s Prime Minister Viktor Orbán expressed dissatisfaction with the conditions of the country’s armed forces, online news portal index.hu reported, citing an interview Orbán gave to Hungarian Catholic Radio. According to the interview that the leader gave in late September, a few days before the refugee quota referendum, doubling the number of armed forces is only the beginning.

Index.hu reports that there are also plans to teach basic military knowledge in more Hungarian schools. The concept is being nurtured by the government in order to strengthen “patriotic commitment and the willingness to make sacrifices,” index. hu reported. In practice, more young people would be offered the possibility of joining the army as volunteer soldiers, within the framework of emphasizing the national interest, the daily reported. “A serious country has its own army, which is not an obligatory task to be ticked off, but an actual force to be taken seriously,” said Orbán in the interview. Minister of Defence István Simicskó was also cited by the online daily as saying that Hungary is not planning to introduce military training in schools, but “a type of counter-culture: a value system and way of thinking based on patriotism.”

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2016. 10. 26. 21:46

News 05

www.bbj.hu

Budapest Business Journal | October 28 – November 10, 2016

Pro and anti-government groups clash at ʼ56 event

This yearʼs 60th anniversary commemorations of Hungaryʼs 1956 Uprising against communist rule saw clashes in front of Parliament as anti-government demonstrators whistled and booed during a speech by Prime Minister Viktor Orbán, with several people attacked by pro-government supporters, according to reports. Opposition party Együtt (Together) encouraged Hungarians opposed to the current Orbán regime to whistle and boo during the leader’s commemoration speech in order to express their rejection of his government.

The demonstration turned ugly in some places, footage taken at the event showed, when pro-government citizens attempted to remove whistles from the mouths of some protesters in order to The 1956 commemorations are usually a fairly somber affair, but this year’s 60th anniversary saw them become much try and silence them. The Hungarian more politicized and in isolated cases even saw scuffles as pro-government supporters clashed with demonstrators police announced after the clashes who booed and whistled during Prime Minister Viktor Orbán’s speech in order to express their disagreement with the that four individuals had been arrested government’s latest actions. Photo: MTI/János Marjai on charges of disorderly conduct. At a separate demonstration civilians Hungary – stressed their desire to live been here with us ever since,” according defending borders instead of raising initiated at Blaha Lujza tér, Hungarian in an independent and free Hungary, to MTI. Commenting once again on the arms,” MTI reported. Orbán apparently left-wing opposition parties urged the according to Hungarian news agency MTI. refugee crisis, the prime minister said referenced the protesters whistling and creation of an alliance in order to remove Orbán said in his 1956 commemoration Hungary had chosen the more difficult booing during his speech by saying that the Orbán government. Leftist parties speech that Hungarian freedom had path when it “chose its own children while the revolutionaries of 1956 had attending the event – the Socialists, been “buried in a grave, face down in instead of immigrants; work instead of sent the message that communism could Democratic Coalition, Dialogue for the ground” under the Soviet-controlled speculation and aid; standing on our be defeated, it still “sometimes comes Hungary and Movement for a Modern regime, but now “it has revived, and has own feet instead of debtor slavery; and back whistling”.

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2016. 10. 26. 21:46

2Business BBJ

EY Hungary analyzes best practices for financial restructuring

EY Hungary has been advising the European Bank for Reconstruction and Development on best practices for financial restructuring, as the regional head told the Budapest Business Journal in an exclusive interview.

CHRISTIAN KESZTHELYI

When a company gets into financial trouble, some lenders may seek to withdraw money or funding support as soon as possible, Raj Apte, head of restructuring for CSE at EY Hungary, tells the BBJ. It is enough if just one of potentially multiple lenders wants its money back, as a domino effect soon sets in that sees all the others demanding the

withdrawal of their money too. That inevitably results in the collapse of the company and it being broken up and sold off. However, if lenders unanimously decide to pause and let the company get its finances organized, the business, as well as the lenders’ money, often has a better chance of being saved.

“I think there has been a great interest in financial restructuring here in Hungary, just as in the wider region,” explains Apte, who is based in Budapest. “Financial restructuring advice requires a combination of corporate finance analysis and analysis of the applicable legal framework, including insolvency-related laws, in a ratio of about 80%-20%. A new perspective is emerging about how financial restructuring should be done in an out of court consensual manner to preserve and maximize value for stakeholders; it is a shame that when credit gets tight, in many cases some lenders or even suppliers start withdrawing liquidity, creating the risk that a company collapses and is eventually sold for pennies in a value destructive manner for all stakeholders, including employees,” Apte comments.

EY believes that, where a company is commercially worthy of support, all the related creditors should decide to voluntarily and consensually wait by signing a standstill agreement, thus allowing time for a proper longer term solution to be explored. Implementing such comprehensive restructuring solutions enables the company’s finances to be sorted, not only saving the company and jobs, but also giving the creditors the best chance to get back their money at the end of the day. “All the lenders need to agree to wait and give the company time; it can only work if everybody agrees to it,” Apte stresses.

MNB guidelines by year end

By December at the latest, the National Bank of Hungary (MNB), is expected to publish the finalized version of its financial restructuring guidelines, prepared for it by EY, which will offer out-of-court and voluntary best practice, in order to get non-performing loans (NPLs) restructured. “EY has been in the forefront of talking to the Hungarian market about a set

of formalized but voluntary and consensual guidelines, which has been encouraged by the EBRD,” Apte explains.

The MNB has been looking for solutions to address the high volume of NPLs and their effect on the financial stability and long-term economic performance of Hungary, as well as on banks in the country. A workgroup was set up including the biggest lenders in Hungary.

EBRD appointed EY to perform a thorough review of international guidelines and best practices applied in selected European countries and their application in Hungary.

Based on interviews and market analyses EY had carried out here since January 2016, a non-legally binding framework was established for financial restructuring.

“Negotiations are ongoing and we are hopeful that the finalized guidelines will soon be presented to the MNB for approval,” Apte states. “At the end of the day, a dialogue is always better than fighting. Instead of getting into an ego-fight or carried away by emotions, all parties standing still and having a rational discussion is a better way to achieve an optimal outcome for all.”

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2016 10 19 15:18

2016. 10. 26. 21:37

www.bbj.hu

2 Business

Budapest Business Journal | October 28 – November 10, 2016

07

More red tape for postings in the EU

Rules on postings across the EU have changed, bringing an increase in the regulatory burden for employment abroad and potentially severe financial consequences for failure to observe.

LEVENTE HÖRÖMPÖLI-TÓTH

Firms that send employees to another EU country on temporary assignments, or that employ foreigners at their own headquarters in the EU on an interim basis, had better prepare for harsher times. For the rules on postings across the union have become more stringent.

“There had been a regulation in place before that ensured the protection of the fundamental rights of workers temporarily working in another member state of the European Union,” says Dr. László Szűcs, legal specialist at Réti, Antall and Partners PwC Legal. “However, in the first half of 2016 a new set of rules entered into force in 16 member states, among them Hungary. Obligations range from administrative tasks to the duty of reporting for employers, whether on the sending or receiving end. Authorities

Dr. Márta Zsédely.

Dr. László Szűcs.

are further required to conduct regular checks of compliance.”

Expats living in Hungary are very much concerned by these changes. “The rules somewhat differ for companies from the European Economic Area (EEA) and those having their origin outside of it.

Non-EEA firms have less in the way of obligations,” notes Dr. Márta Zsédely, attorney at law at Réti, Antall and Partners PwC Legal. The bottom line is that the Hungarian Labor Inspectorate, OMMF, must be notified of the employment before its commencement and a contact person must be appointed who must be available at all times for the authorities.

The OMMF website contains an online form for the purposes of declaring such postings. The receiving Hungarian

party is further obliged to inform the sending foreign entity about all domestic employment-related legal provisions.

Same rights The general idea is to ensure that if a worker ends up working in an EU country, he or she should enjoy at least the same rights as their counterparts in the receiving country. However, their position must not be any worse than that they had in their sending country, either. “If, say, a Hungarian firm sends its workers to Germany or Austria, for instance, it must observe the local employment rules including minimum wage and other sector-specific benefits,” Szűcs says. “By contrast, if an Asian

person comes to Hungary, probably not minimum wage, but rather the amount of annual leave may be an issue, since they might have more of that in Hungary than in their country of origin. The rule of thumb is that for every aspect of the employment, the more favorable rule to the worker must be applied in the end.” An additional burden is the obligation to file the employment-related documentation with the authority in the local language, which is then expected to be archived for several years.

An important aspect is a stricter sanction scheme. Authorities have the power to check the rules on minimum wage, working time and equal treatment, and they may also look into whether all taxes and social security contributions have been paid by the employers. Failure to pay them results in joint and several liability of the sending and receiving employers in many European countries.

So far, workers have had the right to demand such payments, but there was no joint and several liability in place helping enforcement. Fines vary from country to country. Hungary is particularly generous by imposing a symbolic HUF 30,000 (approximately EUR 100), but others like Germany have draconian amounts of up to EUR 500,000, so it is more than recommended for firms to consult the relevant legislation or to turn to a specialist dealing with the paperwork for them.

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2016. 10. 26. 21:37

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2 Business

Budapest Business Journal | October 28 – November 10, 2016

COMPANY NEWS Appeninn acquires Milton Hitelezési Property holding company Appeninn has acquired financing business Milton Hitelezési, which will continue to operate under the name of AppeninnCredit Hitelezési, Appeninn announced on October 21 on the Budapest Stock Exchange website, Hungarian news agency MTI reported.

Appeninn said the acquisition fits into its corporate strategy, as it will now have the option to purchase assets backed by real property or provide property leasing services through its subsidiary. Appeninn is financing the purchase with treasury shares, paying 654,545 to Wallis Group, the previous owner of Milton Hitelezési, for a total value of HUF 144 million. The National Bank of Hungary has approved the acquisition.

ThyssenKrupp makes Budapest R&D base a global center

Germany’s ThyssenKrupp has accredited its research and development base in Budapest as a global center, Minister of Foreign Affairs and Trade Péter Szijjártó told Hungarian news agency MTI on October 20, after meeting with management at the company’s German headquarters in Essen. In addition to its R&D base, ThyssenKrupp makes axles for Audi at a plant in Győr and it is building a HUF 30 billion steering components factory in Jászfényszaru, which is expected to start operating in 2018. Szijjártó also met with the management of Deutsche Telekom in Düsseldorf. The telco’s Hungarian subsidiary Magyar Telekom is setting up service centers in a number of smaller Hungarian cities that will employ 360 people.

Bookline joins Simple app for buying books

Hungarian book retailer Bookline is launching a mobile interface in cooperation with mobile application Simple that enables bibliophiles to purchase books from the retailer’s online store using mobile phones.

Simple, an application that specializes in purchasing goods through mobile phones, is adding Bookline as a separate function to its services. Secure payment is provided for the application by OTP Mobil. Although mobiles are being used more frequently for surfing the internet than desktops nowadays, Bookline says that, up to now, payments have rarely been made via handsets due to the hassle involved. Additionally, people seem to have been reluctant to enter their bank card data into mobile devices in a public space. The new system should get around both problems, Bookline says.

Media Markt eyes two Tesco openings in Hungary

Electronic product retailer Media Markt is planning to open two stores inside separate branches of supermarket chain Tesco in the west of Hungary, the companies jointly announced on October 20. Tesco in Veszprém will welcome an 800 sqm Media Markt unit,

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while the supermarket in Győr will host a 600 sqm store, according to reports. The Hungarian subsidiary of the U.K.-based FMCG retailer has recently spent approximately HUF 440 million on renovating the two units. Tesco added that the Győr store will also add a 75-seater fast-food restaurant.

Oracle Hungary receives Cloud Innovator award

Oracle Hungary has been given the “Cloud Innovator” award during the tenth E-Banking Summit & Expo in Hungary. For the first time this year, awards acknowledging IT solutions in the field were distributed at the event. “We are exceptionally happy about being the recipient of the award, which shows that the bank sector has opened for digital technologies, which can transform their current business models and offer new opportunities,” said Csaba Reményi, CEO of Oracle Hungary, on receiving the award. He stressed that cloud services have become a significant part of the digitization of companies. Businesses primarily opt for cloud services for cost-efficiency reasons, the CEO said, however he believes this is not the only perk of the technology. “Wellapplied cloud-based solutions enable businesses to answer the challenges of digitization faster and in a more flexible manner, while they can also test business models that have profitability that is hard to predict,” the CEO said.

Seeing success, Taxify plans expansion in Hungary Following almost two months of operations in Budapest, Estonia-based transportation company Taxify has requested that the Hungarian National Transport Authority greenlight the company’s plans to double the number of cars it operates in the capital, according to a press release sent to the Budapest Business Journal. Taxify says it has never entered a country’s market as fast as it did here. “Hundreds of people had downloaded our application even before our service was launched,” says Dániel Cziraki, operative leader of the firm in Hungary. “Our service has become so popular that our car park needed to be expanded in a haste, which means at this time we can serve our customers with approximately 100 cars,” Cziraki adds. Taxify’s reported success in Budapest is apparently due to the fact that U.S.-based ride-sharing company Uber pulled out of the country a few weeks before the arrival of Taxify, citing strict new regulations the Hungarian government adopted after local taxi drivers demonstrated numerous times against what they had claimed was unfair competition. Taxify acknowledges this, saying ex-Uber customers probably form the core of its current customer base. Although Taxify’s prices are close to Hungarian taxi fares, the application believes that extra services, such as its innovative application and the rating system of cars and their drivers, offer advantages over traditional taxis. Another advantage, Cziraki notes, is that travelers can trace back their previous rides in the application on a map, and therefore

Ledina Kerámia ready for production, eyes Zsolnay trademark Ledina Kerámia, a company originally established by Pécs municipal council to take over operations from porcelain maker Zsolnay when the latter was threatened with liquidation, is expecting to launch production by as early as February 2017, managing director Viktor Erdei said on October 20, according to Hungarian news agency MTI. Ledina Kerámia launched test runs in October at its plant, which had been built through a HUF 2 billion investment, Erdei said. With its consortium partners, Ledina is planning to participate in an EU-funded HUF 2 bln development program, Erdei added. Anidel Projekt Kft., which owns Ledina, announced that it would spend HUF 8 bln on establishing a plant in Pécs, MTI added. Earlier it was reported that Ledina had filed to acquire the Zsolnay trademark, as “another attack” on Zsolnay, János Bozóki, the “indirect owner” of Ledina said.

Viktor Erdei, the CEO of Ledina Kerámia Kft., and István Takács, the owner of Anidel Projekt Kft., the owner of Ledina, announce the expected launch of production at its Pécs base.

Photo: MTI/Tamás Sóki can double-check whether the drivers chose the best directions. In the first full month the firm operated here, there were more than 10,000 registered journeys, with two-thirds of travelers paying for their ride through the Taxify application. One of the major aims of Taxify is to put an end to bad taxi practices, such as overcharging customers, and taking travelers on longer and slower routes, Cziraki stresses in the statement.

NI Hungary expands plant at cost of HUF 5.5 bln U.S.-based measurement and automation firm National Instruments is expanding production capacity at its Hungarian plant in Debrecen through an investment of HUF 5.5 billion, COO Alex Davern announced on October 18. As part of that investment, the company is also planning to boost R&D infrastructure at its Hungarian base. The investment is expected to create 210 new jobs, Davern added. The COO noted that earlier this year NI installed cutting-edge technology in Debrecen through an investment of HUF 30 bln. Additionally, NI Hungary Managing Director László Ábrahám said the company will donate robot-building kits to all schools in the city. He added that more than 400 Hungarian schools have already joined the company’s mentoring program, which has introduced approximately 4,000 students to robot programming.

Budapest-based coffee startup Bariksa hits Indiegogo

Budapest-based coffee startup Bariksa is raising money for its project on Indiegogo, having set a goal of collecting USD 40,000 to kickstart its business. The app-based coffee

tricycle service could start as early as next February, Bariksa told the Budapest Business Journal. Having started planning in 2012, Bariksa aims to offer an eco-friendly and solarpowered solution, enabling customers to order their coffee via a mobile phone application and pick it up from one of the Bariksa tricycles preparing and selling the coffee. The USD 40,000 target would cover the realization of the first four Bariksa eco-tricycles, licensing costs, 100% arabica coffee, the development of the app, some advertising and the first Bariksers, the founders expect. “Sustainability, inter-generational responsibility, eco-friendly activities and minimization of our impact on the environment are fundamental principles to us and... guide our vision, our actions, our hearts,” the Indiegogo description says. Once the money is raised, the startup expects it will need two months to get the four prototype Bariksas ready. “The campaign is scheduled to end on November 30 this year, which means weʼll ideally be ready to operate from February next year,” Paola Kaniki de Beno, who is in charge of the startup’s external communications, told the BBJ. No such service is provided in Budapest today, Kaniki de Beno stressed, adding that “the closest version could be BITEʼs coffee food truck, but that is a standard, traditional food truck, as it does not move and does not integrate any smart technology.” At first the startup is planning to cover the busiest central areas in Budapest. “Weʼre looking forward to having each central and busy area covered, both on the Pest and Buda sides,” Kaniki de Beno added. She described the expansion possibilities as limitless: “More Bariksas can be added to Budapest and outside the capital too, as well as abroad; we would be able to replicate the business model anywhere in Europe, to start with.”

2016. 10. 26. 21:37

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2 Business

Budapest Business Journal | October 28 – November 10, 2016

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Contitech Fluid Automotive Hungary welcomes Head of Logistics Márió Luca has been appointed head of logistics at Contitech Fluid Automotive Hungary, and will be responsible for the logistics operations of the company based in Makó, Vác and Nyíregyháza, such as purchasing disposition, customer service, warehouse operation, transport and packaging.

With an educational background as an economist, Luca has managed supply chain and logistics operations for more than 16 years. He spent eight years in operational management in the logistics and freight forwarding industry, and a further eight years in logistics management in the automotive and EMS industry. His duties included building, managing and restructuring teams and processes for more than 500 employees.

He has experience in cross docking operation management as well as warehouse operations management including line-feeding. He has run a budgetary of up to USD 25 million per annum. He is also experienced in customs regulations and licensing, as well as in supporting customers and clients from the automotive industry , the electronics sector and the industrial field.

He has also specialized in managing logistics and supply chain service in a high volume operation business. From March 2014 he has been an elected member of the board in the Hungarian Association of Logistics Purchasing and Inventory Management

Glencore Grain Hungary Kft. names HR manager

Judit Demeter has been appointed HR manager at Glencore Grain Hungary Kft., reporting to the CEO. She is responsible for all areas of HR and is a member of the management team. Prior to joining Glencore, she spent 16 years at Total Hungaria Kft., in the position of HR and marketing manager, playing a leading role in organizational change projects.

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“My goal is to motivate high performing teams and to deliver value added HR services to the management and employees. With my professional track record and experience, I am committed to contributing to the business success and excellence of Glencore Group.”

Mari fell in love with Budapest and recognized the great opportunities offered by establishing himself professionally in the area, the chamber said.

Bosch Hungary appoints new CEO

Daniel Korioth has been appointed CEO of the Hungarian subsidiary of German engineering giant Bosch, also responsible

DHL Supply Chain appoints HR leader

Zsófia Györök has been appointed HR lead Hungary for DHL Supply Chain.

Györök said she was looking for challenges when she joined DHL Supply Chain in January 2016. “As the DHL Supply Chain portfolio is really colorful and the business has a huge variety of challenges, an HR lead never gets bored,” she said. DHL Supply Chain has a shared service center with several contracted partners for customer care, and also takes in warehousing, transport and production within its portfolio. It operates across several sites and locations. Previously, she has worked in France in HR, then joined Danone’s HR department, and also worked for a Scandinavian company that provided health care. Györök will focus on organizational development, including company culture, and also retention. “We are aware of the competition nowadays in the Hungarian market. The approach is to be ready for business development and be a real strategic partner for our business, to make the customer satisfied and develop our business starting with our employees’ approach and our teams’ contribution.”

for activities in Bosnia and Herzegovina, Croatia, Montenegro,

Serbia and Slovenia, Bosch Hungary announced on October 18. His appointment takes effect on November 1. Korioth takes over from Javier González Pareja, who is being put in charge of overseeing Boschʼs business in Spain and Portugal, following his spell of almost five years here. During this period, the number of Bosch staff in the country has almost doubled. The new head graduated as an economist from the University of Lima in Peru, and has worked for Bosch since 1989, initially in the field of sales and marketing. Earlier Korioth worked for Bosch in Germany, Spain, Argentina, Uruguay and Brazil. “It is a great honor and an inspiring challenge for me that I can continue my career in Hungary,” Korioth said. “Sustainable and profitable growth will be the main motive in my work,” he added.

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Italian Chamber of Commerce appoints new General Secretary

The board of directors of the Italian Chamber of Commerce for Hungary have appointed Francesco Marias General Secretary.

Mari, who has a law degree from Bocconi University in Milan, has more than 20 years of managerial experience working at companies such as Merloni, Saatchi & Saatchi, RAS Allianz, Banca Popolare and others. Arriving ten years ago as a tourist,

2016. 10. 26. 21:37

3Special Report BBJ

Telecommunications

Hungary’s big three still dominate market

 11

Telcos urge stricter rules for prepaid SIMs  16

Future networks

4G will be around for a while, even as 4G+ augments it, but the prototype 5G network has already been built. Expect it to come to working life in Budapest around 2020.

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2016. 10. 26. 21:51

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Hungary’s big three still

dominate telecom market Served by three big been affected by the growing popularity of mobile lines. Fixed line operators have operators (Magyar had to offer new types of services to fill the gap, improving operating speeds and Telekom, with 47.4% of broadband internet service as part of a market share, Telenor, policy of internet modernizations.

29.5%, and Vodafone, Revenues decline 22.8%), Hungary’s Market leader Magyar Telekom (MTel) has telecommunications market seen revenues decline by 6.5% compared to last year. According to its financial has high penetration all report, total revenues for 2016 have thus far amounted to HUF 148.2 billion: HUF over the country. New 79.8 bln came from mobile revenues, while network infrastructure fixed line revenues remained stable at HUF 52.7 bln, thanks to a lot of improvement is also allowing these in broadband retail and TV. According to Christopher Mattheisen, Magyar companies to meet the Telekom’s CEO, the downturn in revenue growing consumer demand was primarily “due to our decisions with respect to the energy business and lower for mobile data services. systems integration and IT revenues, CLAUDIA PATRICOLO

“A radical change of the mobile market has been happening,” Telenor corporate communications expert Nelli Kadlok tells the Budapest Business Journal. “Our customers have started to use more mobile data and less voice services. We expect that, in the near future, unlimited tariff packages will be getting more and more popular. We have already exceeded 100% market penetration in Hungary, and we expect further increases as the internet of things (IoT) gains space: many everyday objects and devices will become smart – and to use them, we are going to have multiple subscriptions.”

Sometimes the competition can seem extreme, with the deployment of new technologies, such as the use of fiber optics, opening up fresh markets. “Digital services are now also strategically important, and in the near future, people traveling on the subway won’t just read the news or listen to music or a podcast, but watch films and TV channels,” continues Kadlok. Telenor is focused on mobile services as it says nine out of every ten devices it sells are smartphones. “According to the numbers of the Central Statistical Office, there were 6.9 million postpaid and 4.8 million prepaid subscriptions on the Hungarian market in Q2 2016,” comments Kadlok.

In Hungary, as in many other markets worldwide, the number of fixed lines has

resulting from a temporary slowdown in EU fund inflows”. However, MTel has recently won HUF 12.2 bln of EU funds that will be employed to help develop digital networks across the country.

Telenor doesn’t offer fixed line services, and Kadlok underlines that “in Q2 2016 there was more than 11.7 million active mobile subscriptions on the Hungarian market, while the number of fixed lines was only 3.1 million.”

Another source of competition for the big three comes from mobile virtual network operators (MVNOs), services offered by other companies, such as Tesco and MOL using their own brand but buying network coverage from one of the main providers. How much do these affect the market of the big telecommunications companies?

“MVNOs are small: in April, Tesco terminated its Tesco Mobile service – launched back in 2012 – and its customers were transferred to Vodafone,” says Kadlok. “MOL is not a real MVNO, as the company’s MOL Mobile service is just a rebranded MTel tariff. Currently, UPC is the only real MVNO in Hungary and is cooperating with Vodafone to offer its mobile service in a bundle with its cable TV and internet packages to 200,000 customers.”

Vodafone was asked to comment for this article but had not got back to us by our print deadline.

EXPERT OPINION

Cybersecurity high on the EU’s agenda

Dóra Petrányi

Márton Domokos

CEE Managing Director

Senior Counsel, Data Privacy

CMS BUDAPEST This summer, the EU adopted its new Directive on the Security of Network and Information Systems. According to European Commission vice president Andrus Ansip, the so-called NIS Directive “is the first comprehensive piece of EU legislation on cybersecurity”. As a result, companies providing “essential services” through network and information systems (e.g. in the energy, transport, finance, and health sectors) and digital service providers (online marketplaces, search engines, and cloud service providers) in the EU will face new cybersecurity obligations, and governments shall also introduce national cybersecurity strategies and policies.

also designate a single point of contact that is responsible for coordination and cross-border cooperation under the NIS Directive. A Cooperation Group, composed of representatives of EU member states, the EU Commission, and the EU Agency for Network and Information Security (ENISA), will support and facilitate the strategic cooperation at an EU level. The commission also supervises all cross-border tasks closely, and may adopt appropriate technical guidelines to facilitate compliance with the NIS Directive.

NOTIFICATION OBLIGATIONS Operators of essential services and digital service providers (their scope is defined in the NIS Directive) shall notify, without undue delay, the competent authority or the CSIRT of security incidents having a certain impact on the services they provide. The competent authority or the CSIRT may inform the other affected EU countries, and also the public, if needed – for example, where public awareness is necessary to deal with an ongoing incident. Further, sector-specific factors should also be considered to determine the impact which an incident may cause.

With regard to energy suppliers, such factors could include the volume or proportion of national power generated, NEW CYBERSECURITY or for oil suppliers, the volume per day.

REQUIREMENTS EU member states are likely to adopt In case of banking or financial market specific system security regulations infrastructures, their systemic importance for operators of essential services may be based on total assets or the ratio and digital service providers. To avoid of those total assets to GDP. In the health imposing a disproportionate financial and sector, the number of patients under the administrative burden, the requirements provider’s care per year may be relevant. should be proportionate to the risk presented by the system. In the case of EFFECTS ON CLOUD COMPUTING digital service providers, the requirements SERVICES should not apply to micro- and small-sized The NIS Directive allows the adoption enterprises. It is also possible that entities of national measures requiring publicprovide both essential and non-essential sector bodies to ensure specific security services. For example, airports provide requirements when they contract cloud the management of runways, but also the services. However, such measures provision of shopping areas. Operators should apply to the public-sector body of essential services should be subject concerned, and not to the cloud service to the specific security requirements only provider. with respect to those services which are NEXT TASKS deemed to be essential.

For the purposes of the above, each EU member states must pass the national country should determine – by November regulations implementing the NIS Directive 9, 2018, on the basis of the consistent by May 9, 2018. Companies should approach under the NIS Directive – continuously monitor the upcoming laws, which entities meet the criteria of the and review their cybersecurity practices new definition of “operator of essential accordingly, together with their incident services”. Where an entity provides an notification procedures. As most network essential service in two or more countries, and information systems are privately the countries should engage in mutual operated, cooperation between the public and private sectors will also be essential. discussions with each other.

GOVERNMENTAL STRATEGIES AND PROCEDURES EU member states shall be adequately equipped to prevent, detect, respond to and mitigate cybersecurity incidents and risks through well-functioning computer security incident response teams (CSIRTs). Each country shall adopt a national cybersecurity strategy, and

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Budapest Business Journal | October 28 – November 10, 2016

CEU BUSINESS SCHOOL

Mixing Terms: Innovating in Innovativeness Tibor Vörös Senior Lecturer of Management CEU BUSINESS SCHOOL In the sphere of mobile technology, innovation is perhaps one of the most frequently used words. End users may identify specific innovative products, for example in the form of sensor-packed clothing, or a mobile phone sporting both a standard screen and an e-ink screen on the back.

True to its promise, mobile technology has created a ripple effect that has spread throughout the global economy, affecting supply chains and customer buying habits alike. Not surprisingly, there are millions of articles recommending that organizations be “more innovative’” (in fact, hundreds of millions, based on the results of a quick web search).

From the management perspective, “innovation” is an umbrella term: in many discussions, the terms “innovation”, “innovative behavior” and “innovativeness” are often used interchangeably, despite their core differences.

We may conceptualize an “innovation” as a product: a result at a given point in time, created by a dedicated R&D team, or a specific startup. “Innovative behavior” may also be discussed in an organization, focusing on actions to generate, apply or produce a particular novelty over a time period, say introducing tablets to gather up-to-date field data from sales agents.

Finally, “innovativeness” reflects the inherent organizational capability of a firm to be open to new ideas, explore and exploit new niche markets, product portfolios etc., also referred to as continued strategic level of innovativeness.

And for most organizations, in the long-term, innovativeness is considerably more important than a one-time innovation. Sure enough, that one-time innovation may well be the success story of the company: but how the company holds up over time will depend on the innovativeness of the firm.

It seems that the democratization of innovativeness is still an ongoing process and requires an additional effort from all employees.

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“For most organizations… innovativeness is considerably more important than a onetime innovation. Sure enough, that one-time innovation may well be the success story of the company: but how the company holds up over time will depend on the innovativeness of the firm.”

Innovativeness in this context is an equal-opportunity trait: not all employees may use it, but it has to encompass all participants, no matter their hierarchical level or work context.

Employee-driven innovation (EDI, but don’t confuse it with Electronic Data Interchange) is a term that is becoming even more important in using mobile technologies.

A recent survey among Hungarian medium-sized enterprises (50-250 employees) attempted to measure organizational innovativeness at different hierarchical levels.

More than 1,000 participants from 22 companies across different sectors ranked their organizational innovativeness on a five point-scale from a perceived non-existence to high levels. The results showed a – perhaps understandably – skewed picture: while more than 60% of mid-to-senior level management perceived a high level of organizational innovativeness, a similar percentage of junior or non-managerial employees experienced the opposite and graded the innovativeness at barely existing levels.

Organizational signature

One key organizational signature of the digital era was supposed to be the flattening of organizational hierarchies, but it seems that the democratization of innovativeness is still an ongoing process and requires an additional effort from all employees – just as EDI was envisaged.

Here is some food for thought: in your organization, what do you think about innovativeness? And more importantly, if you ask employees from all hierarchical levels, ranging from field workers to CEOs, would they think the same? If the answer is “perhaps”, perhaps it’s time to revisit the term “innovation”.

This column is part of a continuing series of opinion pieces from experts at the CEU Business School in Budapest.

The opinions stated here do not necessarily reflect those of the Budapest Business Journal.

Finding an edge through R&D

5G may not be around for a few more years, but service providers are not sitting tight waiting until the transition takes place. All of Hungary’s incumbent telecommunication networks have come up with a number of pieces of hardware and software in the last few years, developed to accommodate clients and get ahead of the competition.

Instant Network 3G, which debuted in early 2015, is a unique, portable mobile network station. The system is a beefed-up version of a network used at several disaster recovery sites: much smaller in size but more potent.

ZSÓFIA VÉGH

Telenor was the first to launch online video service in Hungary. MyTv will have 50 television channels available for every client with a phone subscription by the end of this year. As of 2017, Blue package subscribers can access MyTv via Hipernet without extra data traffic costs, allowing them to watch a sports event broadcast on the go, Telenor says. The service is available on smart television as well. A related service, not developed

by Telenor, is HBO Go video library, which allows users to access the movie channel’s content via video streaming.

Users can tap into this service for free as Telenor offers free data transfer with similar conditions to its MyTv. In its R&D line-up, Vodafone features solutions for businesses,

bikers and students. The company’s Instant Network 3G, which debuted in early 2015, is a unique, portable mobile network station. The system is a beefed-up version of a network used at several disaster recovery sites: much smaller in size but more potent. The prototype was designed and built by Csaba Perlai and Róbert Tóth, network operating professionals at Vodafone.

Another innovation, based on the company’s M2M technology, is Velotrack, a remote safety solution for bike owners.

Locked Bikes collect data through GPS and motion sensors, which is transferred to a server using Vodafone’s M2M card.

Should the bike be moved, the owner gets a notification on his or her smartphone.

Owners can also download statistics on routes covered and even on the routes and location of their friends and family members.

ReadyPay, another solution from Vodafone, helps SMEs transition to electronic payment.

ReadyPay mPOS mobile is small enough to fit into one’s pocket, making it ideal for salespeople on the go. It is also compatible with all bank cards in Hungary. The company developed ReadyPay with OTP Bank and the Hungarian subsidy of Ingenico Group, an international financial service provider.

5G = evolution of existing standards + complementary new technologies 1990

2000

2010 2020

GSM WI-FI

3G

4G New wireless technologies 5G

2016. 10. 26. 21:51

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Mobile banking without telecoms

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Budapest Business Journal | October 28 – November 10, 2016

INNOVATION

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Telenorʼs Accelerate speeding up Mihály Varga, Minister for National Economy, at the Gránit Pay launch.

A “unique” new Hegedüs. “We are not just unique and top in Hungary, but also in Europe.” app developed by According to Gránit, “the technological Hungary’s Gránit Bank, innovation was extremely well received by customers”. Since its introduction in cooperation with midway through last month, more than 1,000 people have downloaded the Mastercard, has taken application. On the first day alone, 164 an important step bank cards were digitized. towards making the oldHungary leading fashioned leather wallet “Hungary is leading this innovative or purse redundant. market for the first time in Europe.

Mastercard is working constantly to In only a few seconds develop technological devices and offerings to banks,” commented Endre it is possible to move Eölyüs, country manager for Hungary your bank card into and Slovenia at Mastercard, at the app’s introduction. your mobile phone and Since its foundation, Gránit Bank has been known for its efforts to develop then pay for anything digital services. In 2012, it was the you want, in theory first to launch a VideoBank service on the Hungarian market, adding unique anywhere in the world. features, such as the Gránit Lock which CLAUDIA PATRICOLO

“Gránit Bank is using cloud based payment and the Mastercard Digital Enablement Service (MDES). It is unique,” says László Szetnics, mobile business development leader at Mastercard. “We do all we can to incorporate technological bank services to mobile phones. Adopting a mobile app is a top choice because, today, everyone has a smartphone. Since Gránit has decided to do a payment system without telecommunications, this is something incomparable.”

The app is called Gránit Pay and was launched on September 15, pitching it into a market shared by the likes of technological giants Apple and Samsung, whose own apps have been around since 2014. The developers say that what is exceptional about this new mobile payment service is that no special SIM card or bank card is needed for payment. After downloading Gránit Pay, it just needs to digitalize the real bankcard number and turn into a virtual one. Then, you simply place the phone on the terminal and pay.

The bank says Gránit Pay makes it the first issuer bank in Europe to launch an MDES-based mobile payment solution.

“We like to be innovative for our clients.

And of course, there is also an economic reason, because today it is cheaper to be digital,” explains bank director Éva

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helps to increase security by allowing cardholders to temporarily lock or unlock their bank cards by simply pushing a button.

Comfortable Contactless payment is becoming more popular in Hungary: according to statistics from the National Bank of Hungary, “the number of contactless transactions has more than doubled in a year, outnumbering traditional plastic card payments for the first time.”

Even Mihály Varga, the Minister for National Economy, who attended the launch, seemed impressed.

“Gránit Pay is something really new.

Comfortable, convenient, and easy,” he commented. “The long-term aim is to increase payments and purchases, which benefits the economy. When an economy depends too much on cash, it means that there are a lot of illegal markets. Gránit Bank is 44% owned by the Hungarian state, and the government is very much interested in making the economy transparent.

Gránit Pay can be a good example that can help to whiten our economy.

Gránit Bank is also a suitable example to show the world that Hungarians are open to start new things and have an entrepreneurial mindset,” he added.

“This product is such an innovative project, and it came from Hungary before anywhere else.”

Telenor’s Accelerate, the first corporate startup program in Hungary, is gathering pace. Five select teams are now in the privileged position of being able to jump on an accelerated learning path and to tap into the vast opportunities ensured by the telco’s corporate network. One of the mentors is Balázs Várkonyi, a top web entrepreneur, whose brainchild, Extreme Digital grew to become the e-commerce player with the most revenues in Hungary, according 2015 data by GKI Digital, so Várkonyi clearly knows a thing or two about how to make it big in the digital world. He shared his thoughts about his ongoing mentorship with the Budapest Business Journal.

Extreme Digital was voted “Store of the Country” for the fifth time last year in the online consumer electronics category. Your protégé for Accelerate is Moow, which has an innovative bike lock. Did you pick them on the basis of how you could work together with them in the future?

I immediately saw the potential of global distribution in the Moow Smartgrip, which I think is a game changing product. Now every other startup company tries to develop a product that makes an ordinary object smart; even a flask can measure if we drink enough. But while many smart products solve a problem that does not really exist, Moow offers functions that are truly practical to use every day. It offers theft protection, an emergency alert, indicator lights and a fitness tracker, all packed inside a beautifully designed grip. I hope we will be able to sell the Moow in Extreme Digital’s shops.

and no bicycle will be sold without an integrated fitness tracker.

What are the strengths of the team and where does it need to improve?

Although as a startup, starting their first business, they act in a very conscious manner, which I certainly wasn’t when we launched Extreme Digital. Beyond mentoring them, Extreme Digital’s whole product development team is also helping them to stay realistic – as they had some aims that were not easily achievable under real business conditions.

It has been reported that all the teams are extremely dedicated, they even sacrificed their own welcome party in order to apply freshly acquired knowledge. Did you take this level of dedication for granted before the program?

This is all part of the game: if you want to play for real, you should work hard and focus on development and business plans whenever you can. Of course, you can enjoy yourself and relax sometimes, but if I were them, I would also be so excited by my upcoming product that I would not be interested in simply having a party.

How has the chemistry been since you started to work together, and what have been the main achievements?

During the events of Telenor Accelerate, I realized that the Moow team and I have many things in common. Although back then we were not defined as a “startup”, I remembered the old days when we were working on Extreme Digital’s webshop to extend the reach of our little brick-andmortar shop. Selling stuff online used to sound crazy, and now we are selling products worth billions of forints every year. Maybe ten years later the features of Moow will also be standard on bikes,

How would you evaluate the whole program in terms of the quality of the workshops, Telenor’s support, the resources made available and the level of organization?

Telenor’s Accelerate program provides great help to those startups that we could utilize well to avoid some implicit mistakes we made, for example, with Extreme Digital. Startups today must not learn to do business the hard way. Beyond the latest technology and programming trends, startups must also be aware of boring things such as accounting and taxation.

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4G, 4G+ and the coming of 5G

Mobile operators in Hungary say they are constantly working to increase the coverage and speed of their 4G networks. The pace of progress by operator may vary, so may the speed experienced at different spots of the country, but overall, Hungarian networks are doing well at serving users.

BBJ STAFF

If you, like the growing number of smartphone users, spend ever more time on your mobile – often at the expense of time spent in front of the computer – the chances are that you are connected to a 4G or LTE network. This type of network is designed to enable the fast data transfers required by, say, music download or video streaming, and In line with international standards, the frequencies used for 4G in Hungary are band three (1,800 MHz), band seven (2,600 MHz), and band 20 (800 MHz). In cities, all three bandwidths are used. In thinly populated areas, band 20 is used more often, while in areas with higher populations band seven is preferred.

The development of the 4G network has not really required new infrastructure, rather operators have adjusted and expanded the existing one. One main issue here is space: The number of antennas that can be installed at one location, for example a rooftop, is finite. So companies use antennas able to operate at several frequencies, or reduce their size so they take up less space, Telekom said. There is no universal tool to address issues resulting from heavy usage or poor outdoor conditions, Telenor said.

The company may use base stations temporarily for the duration of a festival, or at locations commonly visited by tourists.

With geographical coverage lower than that for outdoor coverage, operators tend to highlight less the level of residential indoor coverage, even though 80% of the time, people connect to the mobile internet from their home, office, or some other indoor location, research by Cisco IBSG shows.

Boosting indoor coverage remains a challenge for a variety of reasons, from construction materials to local topography.

5G: the prototype network has been build. several other activities that are frequently done on smartphone. Due to this switch in traffic, and the mounting pressure for ever faster connections, coverage and speed are the two main areas mobile operators constantly strive to improve, and that is no different in Hungary.

Creating a solid home base In terms of residential outdoor coverage, Magyar Telekom’s 4G network stands at 97.6%. Residential indoor coverage has reached 85%, according to data provided by the company. Last year, the company and Telenor decided to develop 4G network jointly. Under the agreement, Telenor is gradually implementing and operating the 800 MHz 4G network in the Transdanubian region, while Magyar Telekom (MTel) is doing the same in the rest of Hungary – except for Budapest – where both companies are developing their own networks separately. Since it won the necessary frequencies for LTE network in late 2014, Telenor’s 4G outdoor residential coverage has grown from 52% to 97.9% by this September, Telenor said. MTel started off at a similar level: By putting 450 4G base stations into operation two years ago, it increased its residential outdoor coverage to 73% from 54%. Thanks to joint development, 4G is available at 2,486 locations, of which 1,223 have a population of less than 1,000, Telenor said. Vodafone launched its 4G service in December 2014.

By now, outdoor residential coverage has reached 93.74%, the company said.

The pacing of the 800 MHz network development is largely defined by the terms set by the National Media and Infocommunications Authority (NMHH), the authority auctioning bandwidths.

One clear aim of the authority with this bandwidth was to improve coverage in thinly populated areas. Every operator has to follow these priorities; Vodafone, too, is developing

its network based on these principles, the company said. At the beginning of the process, it was the highly populated areas and roads that were given priority, Telenor said. “According to the terms of contract with NMHH, Telenor should have covered 350 towns with a population of less than 1,000 by now. Yet we provide coverage at 808 towns,” the company wrote.

International comparison Beyond coverage, speed and reliability are two components by which operators are judged. According to data from OpenSignal, a company that ranks mobile operators and countries worldwide based on their performance, Hungary fares well in all the above.

OpenSignal collects information from millions of smartphone owners through its apps, and uses the crowdsourced data to build coverage maps as well as analytical reports. With a 79% average, Hungary ranked ninth in an LTE coverage global comparison in Q4 2015, on par with Norway, Sweden and Estonia, and slightly below the United States (81%) and the Netherlands (84%). First placed South Korea (97% coverage), and second placed Japan (90%) are some way ahead. Yet South Korea plays in a different league: that country and Singapore have set themselves apart from the main body of global operators, providing both superior coverage and speed, OpenSignal wrote. Hungary has nothing to be ashamed about with its 28 Mbps LTE download speed, which placed it third after Singapore (37 Mbps) and New Zealand (29 Mbps) in the company’s global speed test, measured during the same time period. In the overall performance of the world’s global LTE operators, factoring in both average network speeds and network availability, Hungary’s three telecoms achieved 83% coverage and 30 Mbps speed, according to OpenSignal.

Internet speed by operator – aggregate data Operator

3G download

3G upload

3G ping

4G download

4G upload

4G ping

Magyar Telekom Nyrt.

9.69 Mbps

2.90 Mbps

276.86 ms

37.06 Mbps

23.51 Mbps

59.10 ms

Telenor Magyarország Zrt.

7.50 Mbps

2.39 Mbps

177.85 ms

35.71 Mbps

18.82 Mbps

113.04 ms

Vodafone Magyarország Zrt.

7.06 Mbps

2.62 Mbps

160.08 ms

20.27 Mbps

10.75 Mbps

119.16 ms

Source: National Media and Infocommunications Authority (NMHH)

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Future landscape This latter may prove to be the most credible information on speed. Even though operators are able to provide internet speeds higher than this, in real life, especially on a mature market where ever more users compete for bandwidth, it is hard to achieve 150 Mbps (if not impossible except under lab conditions). Still, Magyar Telekom claims to be able to provide 300 Mbps download speed at several hundred 4G stations, thanks to the introduction of 4G+ (LTEAdvanced) technology. With capable mobile phones, users can reach up to 150 Mbps at most parts of Hungary, the company said.

While the company continues to develop its 4G network, as this best suits the current demand, it has already started installing 4G+ technology. So far Telekom has made 4G+ available in 14 eastern Hungarian cities and eight of the most visited towns around Lake Balaton, as a result of which music and video download is faster, apps run more swiftly and consumer experience is undisturbed, even at festivals or other mass events, MTel wrote in a statement to the Budapest Business Journal. Telenor has started implementing this technology in the capital and major cities which it says, in theory, provides 300 Mbps download and 50 Mps upload speed, double the current 4G speed.

While 4G and 4G+ can probably accommodate the needs of mobile browsers, streamers and the like for many years ahead, the development of 5G is already happening. Magyar Telekom invested early in 4G: the technology was first tested in Hungary by the company in 2009, and it says it was also the first to introduce a commercial 4G mobile service to market here from January 1, 2012. The firm would like to lead again with 5G. Its German parent company, Deutsche Telekom is involved right now in the international standardization works and testing 5G technology, and speeds of 1.5 Gbps in a mobile phone prototype, have been achieved, Telekom say.

Neither Telekom, nor Telenor expect the technology to launch before 2020. Part of the reason is that devices need to catch up. The first 5G-capable mobile internet modem was announced by Qualcomm only recently (last week). The company says Snapdragon X50 5G modem is capable of download speeds of up to 5 Gbps which is five times faster than the fastest 4G modem. Given that today only a fraction of mobile phones sold in Hungary support 4G+ technology, the beginning of the next decade appears to be a reasonable time for a start.

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DIGI and Hungary’s mobile frequencies: tale of mystery continues

DIGI now owns 5% of Hungary’s mobile frequencies, yet still has revealed nothing about its true intentions. One of the possible scenarios hints at making it big in the internet of things.

LEVENTE HÖRÖMPÖLI-TÓTH

Hungary’s incumbent mobile telephone service providers must have felt a little uncomfortable when Bucharest-based DIGI purchased its first mobile frequency package in this country in the 1,800 MHz range back in September 2014, given that the potential new competitor is wellknown for its guerilla pricing. In fact, in the already crowded-looking market for satellite and cable television services, DIGI has now reached a 23% share from scratch, whilst its revenues have soared by 300% in the past seven years. Yet, it took one-and-a-half years from the purchase of that first mobile package until the company showed its specific intention that it does wish to jump into the mobile business after all. Following that long pause of inactivity, DIGI bought a further chunk of frequency in the 3,600-3,800 MHz range in June 2016, which also gave it an excuse to make an announcement.

“The radio planning of the mobile network exists already, and this year we have started building base stations in several towns. Currently, 200 stations are under construction,” managing director Ryszka Sambor said at the time. Four months have passed since then, but journalists seeking updates on progress still hit solid walls; according to DIGI’s corporate policy, nobody is authorized to say a thing until further notice.

“What I can tell you is that there are huge numbers of staff involved in the construction works,” marketing manager Annamária Kállai tells the Budapest Business Journal. Snippets of information have emerged from local media outlets covering municipalities where DIGI has been erecting its towers, the number of which is growing heavily. Yet, in a bid to make sure no unwanted advantage is given to competitors, no actual figure for the number of towers has been confirmed.

There has been no hint as to timing for the launch of service, or the exact nature of it, not to mention marketing strategy or pricing.

But this strict secrecy itself would seem to prove that DIGI means business, and that it has shelled out a total HUF 10.248 billion for its frequencies for a reason.

The guesswork goes on For the moment, pundits can agree on one thing only about DIGIʼs intentions, namely that nobody has a clue what it is up to. According to NMHH, the National Media and Infocommunications Authority, the frequencies DIGI has are free to use. “It is not prescribed by the authorities what to use them for. What is a must, though, is to start using them,” Dr. Janka Aranyosné Börcs, general director of NMHH pointed out after the

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A typical mobile base station. Digi will have to build (or borrow) a nationwide network for its mobile services.

All about IoT then?

The frequency pie Player Vodafone

MHz

Percentage

232

37%

Telenor

178,6

28%

Telekom

189

30%

Digi

30

5%

Source: National Media and Infocommunications Authority (NMHH)

last tender. Consumers would surely welcome a fourth player in the arena, since mobile services remain notoriously expensive in Hungary. Whereas EUR 20 buys unlimited talk and text in Austria, in Hungary the cheapest flat rate package starts at around EUR 32. Market share has been stable in Hungary for years now, so it would take a new arrival to stir things up.

Telecommunications expert Bogdán Khell, editor-in-chief of mobilarena.hu, a major telco-themed website, believes that there are two main directions DIGI may choose from. One of the paths would be offering unlimited mobile internet subject to a bandwidth limited to around 10 Mbps per second. DIGI already provides mobile web services as a so-called virtual internet service provider, or VISP, under its own brand but using Telenorʼs network, so it could build on this experience. “Option two is the localization market, where local calls may even be free, whereas calls directed outside of the local cells concerned would be charged,” Khell explains. “This method could work, especially in small communities , and it would result in acquiring a big number of customers fast.”

Of the two options, mobile internet seem to hold more promise, especially given the pace the internet of things, or IoT, is developing at. According to a recent study by IDC, an international company researching technology firms, the market is growing by some 25% every quarter, and DIGI might well want to tap into that opportunity. Solutions range from automated agriculture to realtime tracking services, the popularity of which is gaining momentum by the day.

Another boost is destined to stem from the use of smart metering, which is projected to follow an exponential growth curve. If the governmentʼs plans are met, tens of thousands of Hungarian households could enjoy the benefits thereof in the not so distant future. The smooth functioning of IoT solutions, however, assumes a powerful 5G network that ensures a quick response time, user security and the simultaneous serving of a large number of customers. “It will be fun to watch how active DIGI is going to be once the 5G frequencies are up for grabs,” Khell notes.

However, some analysts question the potential of DIGIʼs mobile service on the basis of the fact that itʼs extremely difficult and costly to build your own network.

There are simply too few available locations for installing stations, and it is equally problematic to find new suitable sites.

Incumbents tend to operate 1,400-1,500 towers, a scale of network that takes a long time to build. “However, there is no need to have your own towers all at once,” Khell reminds. “When Vodafone entered the market in 1999, it used the networks of Pannon [now Telenor] and Westel 900 [now T-Mobile] for its voice services for two years. DIGI is entitled to do the same.”

He adds, though, that it would be wishful thinking to bank on seeing Austrian mobile rates in Hungary any time soon.

The charges authorities set for frequencies are disproportionately high in Hungary

“Since everything is moving towards the internet, for the reasons above, the chances are high that DIGI could carve out a substantial piece of the mobile pie after all.” compared to Western practice, which places a huge financial burden on domestic providers and, at the end of the day, users must cough up the cash to cover those horrific costs.

No handsets please What could give hope for lower rates is that DIGI might not want to deal with selling handsets at all. “Lots of costs are related to selling phones – from support, to logistics, to repair services. Providers are starting to realize how much hassle this whole thing is,” Khell says. Relevant statistics show a shift from sales by mobile providers to those by individual consumer electronics players.

“The ratio used to be 80%-20% in favor of providers. Now around half of all handsets are bought in regular stores in Hungary.”

DIGI went down a classical evolutionary road in its home market in Romania by starting off with voice-based services, Khell explains. But in Hungary, it would be about to enter a mature market. “Since everything is moving towards the internet, for the reasons above, the chances are high that DIGI could carve out a substantial piece of the mobile pie after all,” the expert adds. And there wouldnʼt be much unusual about it. VoiP calls are on a path towards outnumbering conventional mobile voice calls worldwide, and that trend is only likely to intensify in the future.

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Telcos urge even stricter rules for prepaid SIM purchases

Magyar Telekom has confirmed to the Budapest Business Journal that negotiations have started between telco providers and Hungarian authorities in order to make the regulations covering the purchase of prepaid SIM cards even stricter and prevent potential criminal abuses.

CHRISTIAN KESZTHELYI

All three of the major telecommunications service providers in Hungary – Magyar Telekom, Telenor and Vodafone – were caught up in an international SIM card scandal in early October after unnamed national security service sources said that a huge number of SIM cards could have been purchased in Hungary for underground activities. Some reports even suggested

that SIM cards purchased in Hungary may have been used by terrorist cells involved in the recent Paris and Brussels attacks.

Initial reports suggested that 128,000 SIM cards may have been purchased from Magyar Telekom, the rest having been bought from Vodafone and Telenor; in total some 180,000 SIM cards could have been purchased using the name of a dead homeless person.

As the news gathered international media attention, the Hungarian government was said to be pondering stricter regulations for purchasing SIM cards. Interior ministry sources were reported to have said that negotiations had already started between the government, the National Media and Infocommunications Authority, and representatives of telcos in Hungary.

Strict regulations to be further tightened Magyar Telekom (MTel) confirmed to the BBJ that the Hungarian government is, indeed, in talks with local providers.

“Authorities and providers are in ongoing reconciliation about the modification of the rules of prepaid SIM card sales, in which process Magyar Telekom takes an active role with the aim of establishing a set of conditions encompassing all relevant aspects that is acceptable for all parties involved,”

the telco’s Communications Directorate said via email.

But it also pointed out that this is far from being a uniquely Hungarian problem; in fact, Magyar Telekom says the system in some EU states is noticeably more lax. “The regulation of prepaid SIM card sales is an issue not specific to Hungary, but relevant across the EU, as in many European countries (including some neighboring ones, like Austria, Croatia and Romania), SIM cards can be purchased under less strict conditions than those applicable in Hungary. In those countries, customers purchasing prepaid SIM cards are not identified at all, thus no records are kept.”

Telenor Hungary broadly agrees with MTel corporate communications expert Nelli Kadlok told the BBJ the company “welcomes reported proposals to introduce stricter regulation in prepaid card registration, and is working actively with the authorities and the industry to ensure the proper identification of existing prepaid customers and to introduce restrictions for future activations.”

She also referred to the stricter restrictions already in place in Hungary, but acknowledged there were shortcomings too. “The current regulation and identification process for buying a prepaid SIM card in department stores as an off-theshelf product is one of the strictest of

its kind within the European Union; however, the lack of limits for SIM cards registered under one person’s name created an opportunity for potential abuse,” Kadlok said. Telenor had been “self-regulating” in limiting the number of prepaid SIM cards that could be bought online to five per person, she said, but added that more must also be done internationally.

“The introduction of such a limit and a stricter identification process would be desirable in all European countries in order to prevent the abuse of mobile services,” Kadlok said.

For now, while negotiations continue on what the stricter regime may look like, and how it will be enforced, there is little else the telcos can say.

“Magyar Telekom shall be in a position to provide more detailed information on the specifics and effects of the new rules of purchasing prepaid SIM cards when the relevant statutes become public,” the Communications Directorate stressed.

The third big service provider, Vodafone Hungary, would only tell the BBJ that its internal controls help deal with potential abuses. “Please be informed that Vodafone does not wish to comment on the matter; however, we have an effective monitoring system in place to filter out similar cases,” Gabriella Berta, PR manager at Vodafone Hungary, said.

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Ericsson drawing on Hungarian talent for 5G

A front-runner in wireless broadband, Ericsson is busy developing the fifth generation of wireless technologies, or 5G. The company should finalize the prototype of 5G network at a global level this year, in which endeavors the Hungarian talent pool has played its fair share.

“We have managed to create a small version of 5G – smaller meaning a strippeddown system which lacks many functions needed for operation.”

BBJ STAFF

It will not be before 2020 when the rollout of 5G happens, yet global network developers are already working hard to meet the deadline. Ericsson, a key player in the field, will finish the research prototype of an entire 5G network by the end of this year which, with limitations, is supposed to operate as the real thing. The global team responsible for the development is coordinated by a Hungarian 5G expert Zoltán Turányi, along with whom many Hungarians from Ericsson’s R&D center in Budapest work on 5G and other new technologies. (Expert is the second of the three grades on Ericsson’s technology career path. There are only a few hundred expert-level professionals at Ericsson worldwide, and five in Hungary.)

“5G radio itself is a huge innovation”, said Turányi, when asked about innovations the company is currently working on. He also cites beam forming, a breakthrough technology in radio that enables 5G communication to happen faster.

The requirement for a transition from 4G to 5G comes mostly from industrial demand. Yet pressure is mounting for better wireless infrastructure from general users as well. For traditional browsing, video streaming, music downloads etc., the current 4G network speeds are sufficient. But this could quickly change if the number of users continues growing. Speed is relative anyway; the rates expressed in megabit per second (Mps) that the service providers publish on their web pages are often theoretical maximum speeds, measured in lab conditions.

In real life, they are hard to achieve due to interference from a number of sources, and also because speeds slow down as more devices compete for LTE resources. It also depends on how active connected users are at a certain moment, how far away they are from cells, even weather conditions can interfere with speed. Mobile operators respond by installing more antennas (or cells) to improve coverage, but during peak usage, this could still prove to be not enough.

BBJ_2420_spec_report.indd 17

Roland Jakab, managing director of Ericsson Hungary.

Zoltán Turányi, Ericsson Hungary Expert.

Beam forming can be one tool to address this issue. By placing a high number of antenna elements on an (existing) antenna, one can direct the radio beam towards one direction, much like the beam of a torch, while ‘muting’ disturbing elements, Turányi explained. All this can be achieved without physically moving the antenna which, unlike traditional TV satellites, does not comprise mechanic components. Using this technology, the antenna can send beams into several directions at the same time and the cells’ full capacity may available for each user. The innovation is too big to tie exclusively to Ericsson, Turányi said, but the company is at the forefront of developing it.

up and/or slide their phones in front of buildings, or reading a QR code on a washing machine that provides repair information, are just some examples of 5G’s potential use. All of these require video/data sending, analysis and response so fast that current 4G networks simply could not cope. On the other end, there is the demand for less intelligent, basic devices to communicate.

“With the creation of NarrowBand IoT [Internet of Things], the aim was to scale down the chip in LTE terminals and LTE-capable phones to cost roughly as much as a Bluetooth chip.

The bandwidth is reduced to 0.2Mhz bandwidth which is ‘noisier’ (that is, more interference is experienced) but it is not an issue as it is not designed for continuous conversation anyway,” Turányi said. Rather, NB-IoT is designed to provide sustainable technology for connecting billions of devices. Contrary to critical mission focused development, this is an example of massive use of simple things, like a key holder that can be beeped from a distance making it easier for its owner to locate it. The specification for NB-IoT includes a number of design targets: device cost under USD 5 per module; a coverage area that is seven times greater than existing technologies; device battery life that is longer than 10 years with sustained reachability; and meets a capacity density of 40 devices per household. NB-IoT was not developed

by Ericsson, but the company was among the most active using/applying it.

The number of new technologies may further increase when Ericsson Hungary, which celebrates its 25th anniversary in the country, moves to its new center in Budapest. The company recently laid the foundation of its future Budapest headquarters, where its existing national sites, including its R&D lab and incubation center, will

Prototype ready He also talks about what they have achieved in the development of 5G. “We have managed to create a small version of 5G – smaller meaning a stripped-down system which lacks many functions needed for operation,” Turányi said. It is in preproduction phase, and is still some way from becoming a fully-fledged product at this stage. So far, the various generations of networks have usually had a ten-year timespan. The standardization process of 4G finished in 2008, the product was launched in 2010, and so we are still within that time frame, Turányi says.

That said, things will be different this time. With digitalization, the amount of data to be analyzed and computed has grown enormously. What distinguishes 5G from former generations is its ability to communicate and compute.

It is an integrated system which also involves the use of clouds, Turányi notes. Controlling a robot remotely, augmented reality in the form of a tourist app that displays information on sights, bars, museums as users hold

be moved upon completion. This will become one of the biggest R&D centers of Ericsson in Europe, in accordance with the strategic agreement with the government. The Ericsson House, set to be finished by 2017, will be the first building of the Magyar Nobeldíjasok K+F Park (Hungarian Nobel Laureates’ R&D Park) where the buildings will be designed to reflect the specific demands of companies working in R&D. “The new design will boost creativity and closer cooperation between research and development and sales, which may contribute to more breakthrough technologies,” Gábor Éry, the President of Ericsson Hungary said at the ceremony.

Global portfolio “The Hungarian research base contributes substantially to Ericsson’s global portfolio,” Roland Jakab, managing director of Ericsson Hungary, told the Budapest Business Journal. The three main topics they are actively involved in are 5G, cloud, and analytics, which are also the most current topics in technology today. The company is in close cooperation with universities, including the Technology University in Budapest (BME) and Eötvös Loránd University, also known as ELTE. The firm operates a highspeed lab and a complex hardware design lab at BME, and a software technology lab and a communications network lab at ELTE. These labs produce a high number of theses, diplomas and scientific studies.

Some ideas even get to become a product at the firm’s incubator: Ericsson Garage. After Stockholm, Budapest was only the second city to host such an incubator. One recent example of cooperation between Ericsson Garage and Universities is SmartActive Squash. Engineers and researchers from Ericsson and universities together with students took a squash wall and made it smarter with the aim of being able to analyze the game to the extremes. The system gives instant feedback on everything from the strength of the drive to the angle the ball hits the wall to what stance the player took – all helping improve the game and make training interactive. The team created an IoT wall equipped with sensors and attached it to a cloud-based analytical tool. The product is already used in a Budapest-based sport center. Yet the major benefit for Ericsson, according to Jakab, does not necessarily come from the sales of the product, but its potential adaptability to other industries.

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Telecommunications equipment manufacturers Ranked by total net revenue (HUF mln) in 2015

2

pCe paRagon solutions kFt.

3

lg eleCtRoniCs magyaR kFt.

4

HuaWei teCHnologies HungaRy kFt.

www.samsung.com

www.foxconn.com

www.lg.hu

www.huawei.hu

758,586

312,827

92,118

67,530

✓

–

✓

–

–

✓

–

–

✓

–

–

✓

–

–

–

–

–

✓

–

–

✓

–

–

✓

–

–

✓

–

–

–

–

–

–

–

–

–

–

–

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Tablets, audiio-video cameras, monitors, printers, LED lights, SSD, portable SSD, memory cards, optical drivers

Data transmission unit

–

Ÿ

Roh youngnam Daemin Hwang Krisztián Szili

1097 Budapest, Könyves Kálmán körút 3/A (1) 455-6060 (1) 455-6066 –

2005

– Huawei Technologies Cooperatief U.A. (100)

Hui Chun, lu yong, Wang shengli – –

1138 Budapest, Népfürdő utca 22.

(1) 555-2300 (1) 555-8989 –

Ÿ

28

2002

– NEC Europe Ltd. (100)

lajos veres – –

1142 Budapest, Ungvár utca 64–66.

(1) 814-6424 (1) 321-8202 eszter.nagy@ emea.nec.com

–

117

1990

– Sierra Communications International LLC (99.99), AVAYA Emea Ltd. (0.01)

andrás turai, györgy gombár – –

1062 Budapest, Váci út 1–3.

(1) 238-8200 (1) 359-0583 –

✓

–

17

1990

– Alcatel-Lucent Participations S.A. (100)

kálmán topor – –

1116 Budapest, Kondorfa utca 6–8.

(1) 209-9500 (1) 209-9599 info@alcatel-lucent.hu

53

1997

– Cisco Systems Inc.(Ÿ), CISCO Systems Management B.V. (Ÿ)

evan sloves – –

1123 Budapest, Csörsz utca 45.

(1) 225-4600 (1) 225-4611 –

–

–

–

–

–

–

✓

✓

–

–

–

–

✓

–

8

avaya HungaRy kFt.

6,199

–

–

–

–

–

–

–

✓

–

–

–

–

–

9

alCatel-luCent HungaRy kFt.

3,635

–

–

–

–

–

–

✓

✓

✓

✓

✓

✓

10

CisCo systems magyaRoRszág kFt.

11

moHanet mobilsystems zRt.

BBJ_2420_spec_report.indd 18

1992

– LG Electronics Europe Holding B.V. (99.99), LG Electronics Inc. (0.01)

1092 Budapest, Köztelek utca 6.

(20) 977-7797 – –

8,071

www.panasonic.com

– HonHai Group (100)

2900 Komárom, Bánki Donát utca 1.

(34) 886-069 (34) 886-173 komarom@emea. foxconn.com

béla zagyva Erzsébet Tóth Andrea Nagykálnai

7

panasoniC maRketing euRope gmbH soutHNR east euRope bRanCH oFFiCe

2007

péter tálos – –

– Nokia Solutions and Networks B.V. (100)

neC easteRn euRope kFt.

www.mohanet.hu

1138 Budapest, Dunavirág utca 2.

(1) 453-1100 (1) 453-1103 –

2007

26,337

www.cisco.hu

Joseph (Jeongwoo) kim Kim Ki-sup Mónika Nagy Törökné

gábor Éry – –

nokia solutions and netWoRks kFt.

www.alcatel-lucent.com

237

1989

– Samsung Electronics Corporation Ltd. (100)

– Telefonaktiebolaget LM Ericsson (100)

6

www.avaya.com

Ÿ

addRess pHone Fax email

1990

42,631

www.nec.com

510

top loCal exeCutive CFo maRketing diReCtoR

1,900

eRiCsson HungaRy kFt.

www.nokia.com

Ÿ

oWneRsHip (%) HungaRian non-HungaRian

1097 Budapest, Könyves Kálmán körút 11/B (1) 437-7100 (1) 437-7467 valaszolunk@ ericsson.com

5

www.ericsson.com

no. oF Full-time employees on aug. 1, 2016

industRy-speCiFiC solution

message Handling system

CtC/CRm solution

voip

vsat system

Call/ContaCt CenteR

business pHone system/pbx

Fax maCHines

ansWeRing maCHines

isdn pHones

analog pHones

tRi-band mobile pHones ✓

otHeR teleCom and netWoRk equipment

yeaR establisHed

1

samsung eleCtRoniCs magyaR zRt.

dual band mobile pHones (900/1800 mHz)

Company Website

total net Revenue in 2015 (HuF mln)

Rank

types oF equipment

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

–

Ÿ

2,832

–

✓

–

–

✓

✓

✓

✓

–

✓

✓

✓

✓

Desktop UC system with messaging and phone functions, video conference and telepresence systems

283

✓

–

–

–

–

–

✓

–

–

–

✓

✓

✓

Ÿ

20

2006

Zoltán Havasi (90), Zsolt Mozgó (10) –

zoltán Havasi Norbert Szabó –

1152 Budapest, Telek utca 7–9.

(1) 271-1141 – info@mohanet.com

Ÿ

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

–

Ÿ

2010

– Panasonic Marketing Europe GmbH (100)

ireneusz piotr smaga – –

1117 Budapest, Neumann János utca 1.

(1) 382-6060 (1) 382-6066 –

2016. 10. 26. 21:51

www.bbj.hu

19

3

Budapest Business Journal | October 28 – November 10, 2016

Internet service providers Ranked by total net revenue (HUF mln) in 2015

1

magyaR telekom nyRt.

2

telenoR HungaRy ZRt.

3

www.telekom.hu

www.telenor.hu

vodaFone magyaRoRsZág mobil távköZlési ZRt.

502,275

157,833

134,824

Ÿ

Ÿ

3.50 millió

Ÿ

✓

✓

✓

✓

–

–

✓

–

–

✓

–

–

✓

–

–

✓

✓

✓

yeaR establisHed no. oF Full-time employees on aug. 1, 2016

oWneRsHip (%) HungaRian non-HungaRian

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone Fax email

✓

1991 6,160

Free float (40.79) Deutsche Telekom AG (59.21)

Christopher mattheisen János Szabó Mohamed Elsayad

1013 Budapest, Krisztina körút 55.

(1) 458-0000 – –

✓

1993 1,262

– Telenor Mobil Communications AS (100)

alexandra Reich – –

2045 Törökbálint, Pannon út 1.

(1) 464-6000 (1) 464-6100 –

✓

1999 1,912

– Vodafone Europe B.V. (100)

alexandre Froment-Curtil David Garcia –

1095 Budapest, Lechner Ödön fasor 6.

(1) 288-4288 (1) 288-3200 –

✓

1994 1,049

– UPC CEE Holding B.V. (100)

Robert Redeleanu Ádám Jakabos –

1095 Budapest, Soroksári út 30–34.

(1) 456-2600 (1) 216-7752 info@upc.hu

(0.01) Magyar Telecom B.V. (99.99)

david blunck Ákos Balogh –

2040 Budaörs, Edison utca 4.

(1) 801-1500 (1) 801-1501 info@invitel.co.hu

4g

mobile

miCRoWave

adsl

Cable

leased line

52,013 (min.)

1,008,588 (2016. jún. 30.)

modem

total no. oF subsCRibeRs on aug. 1, 2016

Company Website

net Revenue FRom inteRnet seRviCes in 2015 (HuF mln)

total net Revenue in 2015 (HuF mln)

Rank

means oF aCCess

www.vodafone.com

4

upC magyaRoRsZág kFt.

5

invitel távköZlési ZRt.

44,463

Ÿ

Ÿ

✓

✓

✓

✓

✓

✓

✓

1995 1,120(1)

6

digi távköZlési és sZolgáltató kFt.

39,253

Ÿ

Ÿ

✓

✓

✓

–

–

✓

–

1996 1,390

– RCS&RDS S.A. (100)

ungureanu Florin, Ryszka sambor – –

1134 Budapest, Váci út 35.

(1) 707-1000 (1) 707-0009 ugyfelszolgalat@hu.digi.tv

7

gts HungaRy kFt.

10,375

Ÿ

Ÿ

–

✓

–

✓

✓

–

–

1993 5

Magyar Telekom Nyrt.

(100) –

gergely árvai – –

2040 Budaörs, Ipartelep utca 13–15.

(1) 814-4000 (1) 814-4047 info@gts.hu

8

netFone teleCom kFt.

1,095

Ÿ

135 (ADSL, 2015. jan. 1.)

–

–

–

✓

–

–

–

2012 49

Morando Zrt. (80), Zsolt Wilhelm (10) Scanwinavia AB (10)

Zsolt Wilhelm Zsolt Wilhelm Lajos Varga

4400 Nyíregyháza, Tiszavasvári út 35/A (1) 878-1814 (1) 325-5675 info@netfone.hu

9

aCe teleCom kFt.

Ÿ

–

✓

✓

–

✓

–

–

1997 58

Individuals (68), ThreeF Kft. (32) –

attila Farmosi, gábor varga Gábor Varga Viktória Krall

1037 Budapest, Zay utca 3.

(1) 437-0590 (1) 437-0599 office@acetelecom.hu

10

exteRnet nyRt.

✓

2007 14

(100) –

örs lévay – –

3043 Egyházasdengeleg, Rákóczi út 40.

(1) 237-1865 (40) 209-021 externet@externet.hu

11

dRávanet ZRt.

–

1996 8

Pallas Office Kft. (81), other (19) –

Zsombor papp Rezső Dunay Csaba Csizmadia

7624 Pécs, Budai Nagy Antal utca 1.

(40) 811-118 (1) 890-0891 info@dravanet.hu

12

eQnet inFokommunikáCiós ZRt.

–

1999 7

(100) –

tamás graur – –

1038 Budapest, Váci út 175.

(1) 465-7800 (1) 465-7899 –

13

noRdtelekom nyRt.

✓

2009 4

BELTÁV Vagyonkezelő Kft. (76.58), other (23.42) –

mihály gácsi – –

1074 Budapest, Dohány utca 12–14.

(1) 492-0000 (1) 267-6114 info@nordtelekom.hu

www.upc.hu

www.invitel.hu

www.digi.hu

www.gts.hu

www.netfone.hu

www.acetelecom.hu

456

www.dravanet.hu

www.eqnet.hu

Ÿ= would not disclose, NR = not ranked, NA = not applicable

978

623

www.externet.hu

www.nordtelekom.hu

61,833

94

69

Ÿ

Ÿ

Ÿ

456

Ÿ

Ÿ

Ÿ

Ÿ

2,845

Ÿ

Ÿ

–

✓

–

✓

–

✓

✓

✓

✓

✓

✓

✓

–

–

–

✓

✓

✓

✓

✓

–

✓

–

✓

✓

–

✓

–

–

✓

This list was compiled from responses to questionnaires received by October 26, 2016 and publicly available data. Data is based on companies’ own data revelations. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

Notes (1) Aggregate staff of Invitel Távközlési Zrt., Invitech Megoldások Zrt. and Invitel Központi Szolgáltatások Zrt.

BBJ_2420_spec_report.indd 19

2016. 10. 26. 21:51

4 Socialite BBJ

Exploring Jewish Budapest

In the first of a two-part look at Jewish Budapest, David Holzer looks at the Jewish Hungarian mentality and some of the contributions its people have made to life here.

DAVID HOLZER

My brother and his wife were over from England this weekend. It was their first visit to Budapest. We decided to take them to Spinoza on Dob utca, a Jewish restaurant not far from the synagogue. I have to admit that when I told my brother ADVERTISEMENT

he had to try the flodni because it was the best in Budapest I was showing off a little.

If you don’t already know, flodni is a traditional Jewish-Hungarian apple, walnut and poppy seed pastry. You can find it all over Hungary and it’s delicious.

I wasn’t prepared for what the waiter, who had overheard, said next.

‘No, it isn’t,’ he insisted. ‘And the strudel is much better.’

Brutally honest to the point of bloodymindedness, the waiter’s answer somehow contained the essence of Jewish Budapest for me.

A brief history of the Jews in Hungary According to some accounts, there were Jews in what became Hungary even before the Hungarian conquest of the Carpathian basin in 895 AD. The persecution of Hungarian Jews dates back to at least

the 13th century and the reign of King Ladislaus IV of Hungary, who decreed that they should wear a piece of red cloth.

Centuries of oppression followed, including the expulsion of the Jews from Buda in 1746. However, in the late 18th century, Joseph II removed all the decrees that had oppressed the Jews. A national assembly emancipated the Jews in 1849.

By the time of World War I, the Jewish community made up 5% of Hungary’s total population, with 23% in Budapest. Jews rose to prominence in science, business and the arts.

Famous Hungarian Jews include Harry Houdini, the painter Imre Ámos, the great photographer Robert Capa and, admittedly much later, Tommy Ramone of The Ramones – born Tamás Erdélyi in Budapest in 1949.

After the Trianon treaty in 1920, when the boundaries of Hungary were redrawn and the country lost much of its land and population, its leaders cautiously aligned themselves with the fascist governments of Germany and Italy. This led, in 1938, to a series of anti-Jewish measures, deportation and, throughout World War II, massacre on a large scale.

Today, most of Hungary’s Jewish population of around 50,000 people lives in Budapest. Fewer and fewer people identify as religious Jews, and the intermarriage rate is around 60%.

But there are still plenty of active synagogues in Hungary, including, of course, the Dohány utca Synagogue, just around the corner from Spinoza.

Dohány is the largest synagogue in Europe and, depending on who you believe, the second largest in the world after the Temple Emanu-El in New York.

Consecrated in 1859, it was the first synagogue to be built with the onion shaped domes in the oriental, Moorish style that influenced the look of many other such places of worship.

Jewish Hungarian patriotism As an Englishman living in Hungary, one of the things that strikes me as most remarkable about this country’s people is their fierce patriotism. What is even more surprising to me is the fact that this extends to Hungarian Jews, who have historically had less reason to love their country. The story of the poet, writer and translator György Faludy (1910-2006) is an excellent example.

Faludy studied at the Fasori Evangélikus in Budapest, a Lutheran school, and then at the universities of Vienna, Berlin and Graz. In 1938, he published a collection of poetry called A pompeji strázsán (On a Pompei Watch) that contained antiNazi sentiments, and which caught the

BBJ_2420_socialite.indd 20

attention of the authorities. Faludy fled Hungary for Paris.

When the Germans occupied Paris in 1940, Faludy escaped to Morocco with his first wife. In 1941 he left for the United States, where he joined the Movement of Free Hungarians and, in 1943, enlisted with the U.S. army.

After the war, Faludy returned to Hungary. In 1950, he was charged with being an American agent. Displaying the savage black humor and contempt for stupidity that characterizes his work, Faludy named long-dead writers William Blake and Edgar Allen Poe as his CIA contacts. In the hope that he would survive Stalin, Faludy acknowledged the ludicrous accusations and spent three years in the terrible Recsk labor camp.

In the camp, Faludy wrote some of his best poems. Actually, “wrote” is a misnomer as Faludy couldn’t risk putting them to paper. Instead, Faludy memorized poems like his superb Western Australia, which contained the lines “I will fight this tyranny, give it no peace from my rhymes, not even when dead.”

When Stalin died in 1953, Faludy was given an amnesty. But, after the suppression of the 1956 revolution, he fled to London. While there, Faludy wrote what, for me, is his masterpiece, the 1962 memoir My Happy Days in Hell. Apart from anything else, the book – if it’s true, of course – offers an intriguing insight into early 20th century Hungary.

In 1988, as communism crumbled and after years in exile, Faludy, who had been diagnosed with cancer, returned to Hungary “just to die in my native land”. Back home, Faludy was adored by the Hungarian people and made an honorary citizen of Budapest.

A confirmed bisexual, he married the 27-year-old poet Fanny Kovács. Faludy was 91. When Faludy posed with Kovács for Hungarian Penthouse magazine, the two wearing little more than their wedding rings, the Hungarian public was outraged and titillated in equal measure. Over 70,000 copies of the magazine were sold in a country of no more than ten million people.

How could you not admire a man who poses in Penthouse in his early 90s, with a woman almost 70 years younger than him? It’s hilarious, defiant and absolutely crazy, all at the same time.

Apart from everything else, I’m fascinated by the fact that, despite all he suffered as a result of being born Jewish, Faludy chose to return not once, but twice to Hungary. His sheer bloodymindedness, accompanied by black humor, is quintessentially Jewish and Hungarian.

2016. 10. 26. 21:38

4 Socialite

www.bbj.hu

Budapest Business Journal | October 28 – November 10, 2016

21

The persecution of Hungarian Jews dates back to at least the 13th century and the reign of King Ladislaus IV of Hungary, who decreed that they should wear a piece of red cloth. Centuries of oppression followed, including the expulsion of the Jews from Buda in 1746. However, in the late 18th century, Joseph II removed all the decrees that had oppressed the Jews. A national assembly emancipated them in 1849.

At left, poet, writer and translator György Faludy (1910-2006), one of the most notable Hungarian Jews of the 20th century.

Spiritual heir

When the waiter in Spinoza rubbished his restaurant’s own flodni, it somehow felt to me like I was listening to a spiritual heir of Faludy. The waiter couldn’t help but speak the truth, even if it meant we didn’t invest in the flodni.

He gambled that we’d go for the strudel.

We did, and it was delicious even if it wasn’t as good as the flodni.

It’s perhaps difficult for natives of Budapest to appreciate the luxury of having a Jewish quarter, if you can call it that, in the heart of their city.

London’s Jewish areas are on the outskirts and, in any case, the number of traditional Jewish restaurants has shrunk to less than a handful. Whiling away the afternoon in Spinoza is a treat.

After three hours in the restaurant, we buttoned our coats and stepped out

into Dob utca. It was now dusk and lights twinkled all over the city. At the top of the street, we turned and looked in the direction of the synagogue. It was illuminated and absolutely beautiful.

In part two, I’ll take a look at modern Jewish life in Budapest. I’ll attempt to find out what means to be Jewish and Hungarian in the city today. This will also involve introducing you to some Jewish restaurants, bars and cafes which are rather more off the beaten track.

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2016. 10. 26. 21:38

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4 Socialite

www.bbj.hu

Budapest Business Journal | October 28 – November 10, 2016

Olaszrizling continues on upward spiral

The tenth month of the year really did really live up to the “Olaszrizling Október” moniker. Following in the wake of its centerpiece event, the Grand Olaszrizling Tasting covered in the previous issue, a group of winemakers from Csopak, a sub-region of Balatonfüred-Csopak, united under the high quality oriented Codex initiative, turned out in the capital on October 13 at the ETAP wine bar to impress with distinctive offerings from the 2015 vintage.

ROB SMYTH

The wines brought further evidence to the table that this supposed journeyman of a grape is capable of making unique wines with a strong sense of place, and put emphasis on individual vineyards – taking the grape to an exciting new level in the process.

After the annus horribilis of the 2014 vintage, in which some small quantities of very good wines were nevertheless made by certain savvy winemakers, 2015 provided ideal conditions for making dry whites across much of Hungary. This enabled Csopak’s vintners to bring out a series of sophisticated single vineyard offerings, rather than having to juggle grapes from various plots to balance out different levels of ripeness from different terroirs and combine them into one wine.

The complex cocktail of red Permian sandstone, rendzina, Triasic period limestone, dolomite and marl soils that characterize the BalatonfüredCsopak region, along with Lake Balaton’s moderating influence, enable the Olaszrizling grape to retain the kind of acidity required to make the wine lively and exciting, as the grapes ripen sufficiently to gain plenty of concentration. It’s a similar case further west along the same north Balaton shore for Olaszrizling originating from the volcanic basalt soils of Badacsony and Balaton-felvidék (where limestone also comes into play), which makes the wine regions of northern Balaton a powerhouse for the Olaszrizling grape.

While there is much ongoing debate about the use of the term minerality when describing wine, I personally feel it’s too much of a push to say we are directly tasting the minerals from the

BBJ_2420_socialite.indd 22

The certified 100% Olaszrizling vines of Csopak in Veszprém county, close to Lake Balaton. soil. Having said that, I’m convinced that these kinds of soils bring structurebuilding acidity that also brings out all manner of complex flavors in the wine.

At the Codex tasting (a Codex wine has to be 100% Olaszrizling), Petrányi’s Csopak 2015 from Szitahegy was partly oaked and comes from limestone and marl soil and had some of that vegetal and floral character that’s typical of Olaszrizling but also grape soda and honey notes on the palate to bring it individuality. Homola Hajnóczy 2015 had a good dollop of oak, but there was also juicy lime, baked apple and celery,

followed by a chalky finish. For an impetuous few this was too oaky, but it rewarded patience and a few swirls of the glass helped to rouse the abundant fruit.

Homola’s wines are made by Tokaj talent Attila Homonna, who is also cooperating with Burgenland legend Roland Velich, of Weingut Moric fame. Never the shrinking violet, Homonna was also brave enough to make a wine from the Hajnóczy vineyard from 2014, although this was quite austere with razor sharp acidity and a distinct lack of fruit.

The world of Hungarian wine is throwing up increasingly pleasant

surprises, and so did the Codex tasting.

From the pint-sized Fekete Pince, which has a single hectare of vines, Hegyalja 2015 was pineapply and petroly, striking a delicious balance between waxy texture and fruitiness. It costs a remarkably good HUF 1,800 a bottle, but you’ll have to go to the cellar to get it, according to lawyer/winemaker/ owner Zsolt Fekete.

The wine that put Csopak on the map many moons ago was Csopaki Rizling from the Jásdi winery. 2015 sees this estate blend of Olaszrizling back at its best value; a real bargain at around HUF 1,700 and a great introduction to the grape. Of Jásdi’s single vineyard Olaszrizlings, Siralomvágó 2013, from dolomite soils, impressed more than the 2015 Lőczedombi 2015, from Permian sandstone – the former being soft and juicy, oozing yellow apple and ripe pear and peach, while the latter was a little too austere in its current form, though it may well change with some ageing.

The rising (or possibly now established) star of Csopak is Szent Donát. The 60-year-old vines of the very steep Kishegy vineyard, with its marl, limestone and loess soil, yielded a floral, nutty and edgy wine in 2015. However, the winery’s Slikker 2015, which hails from red clay soil, really stood out with its green herbs, yellow apple and considerable length. This vineyard is planted with vines of 30 years of age, but is not as steep as Kishegy.

However, perhaps the most striking wine from Szent Donát was actually a red from what is a pretty much red-free wine region. Magma Kékfrankos 2015 was elegantly floral with potpourri aromas, focused acidity, smooth tannins and delicious red fruit.

Alongside the progress shown over in Csopak, the other side of this region has also had a stellar vintage with the Olaszrizling grape. Figula also sensed the potential of 2015 and has come out with six fine single vineyard bottlings from the Sáfránykert, Öreghegy, Gella, Lőczedomb (in Csopak), Szarka and Sóskút vineyards. All seriously impressed when I tasted them blind, with the last two a notch higher than the rest. Furthermore, they all have their own characteristics and a strong sense of identity, and as such are more than just very good wines. Indeed, they articulate their place of growth in a similar way that the best dry Furmints from Tokaj do. This is something that István Jásdi has long maintained and on tasting the wines mentioned in this article, I would have to agree with him wholeheartedly. Note that pan-Central European Olaszrizling has for long been the most widely planted white grape in Hungary, but über trendy Furmint is catching up fast.

From Balatonszőlős, officially part of the Balatonfüred sub-region, Béla és Bandi only released their second single varietal offering from 2015; prior to 2014, they only used the grape in blends.

The 2015 is very nice and has a bit of that almond note that can sometimes be picked up on Olaszrizling, along with juicy apple and pear, plus a floral touch.

Another good one from Balatonszőlos is Gellavilla’s 2015.

2016. 10. 26. 21:38

4 Socialite

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Budapest Business Journal | October 28 – November 10, 2016

WHAT’S

ON VIVALDI, AS NEVER BEFORE A unique concert, featuring impressive 3D visual effects alongside fantastic music virtuosity finally makes it to Hungary when the “Vivaldianno – City of Mirrors” production visits Budapest on November 13.

The show is based on baroque music, albeit mixed in with some contemporary flavoring, and tells the astonishing story of the composer Antonio Vivaldi, outlining the ambitious hopes and great losses in his life.

The concert comes to the Papp László Budapest Sportaréna as part of a world tour that has taken in Czech Republic, Turkey and Serbia, and will move on to Israel and Germany. It is due to play at London’s Apollo Theater in March 2017. “Our goal is to offer impressive music and visual experience to our audience, bringing them the masterpieces of Antonio Vivaldi, the baroque genius, in a modern approach,” say the organizers. The current “New Generation Concert” production debuted in 2015 with sold out performances in the O2 Arena, the largest concert venue in Prague. It is

Fun things to d o in Budapest for the nex t t wo weeks.

the work of Czech musician Michal Dvorak as producer, and librettist Tomas Belko, as well as the excellent violin virtuoso Jaroslav Sveceny. The key visual stage effects are produced by Kosuke Sugimoto.

A special feature of the tour, making each event unique, are the local artists and acknowledged world musicians invited to join the “core” creators and performers. In Budapest, cellist Tina Guo will perform on stage. She is already well-known to the Hungarian public, as she most recently performed a concert with Hans Zimmer in the Budapest Arena. This gifted musician often takes a diversion into the world of rock, having played with bands like the Foo Fighters, as well as with stars like Al Di Meola, Peter Gabriel, Carlos Santana and Stevie Wonder. According to the organizers’ Facebook page, she will also be playing at upcoming concerts in Riga, Latvia; Tallinn, Estonia and in Saint Petersburg and Moscow, Russia.

For more information, and a video trailer, check out vivaldianno.cz/en or look for the Vivaldianno – City of Mirrors Facebook page.

PATRON SAINTS OF FOOD, WINE AND ARTS MOVE INTO HOTEL GELLÉRT The annual St. Martin’s Day Wine Festival at the Danubius Hotel Gellért hits a significant landmark with this year’s sixth edition, as it is also the memorial year of Saint Martin, on the 1,700th anniversary of his birth. But the four-day event, which runs from November 10-13, will feature a veritable choir of the good and the great from the heavenly host.

Alongside St. Martin (judge of new wine and patron saint of horse and goose keepers, as well as of winemakers) there will be St. Gellért, of course (patron saint of Budapest and of the hotel which bears his name), St. Wenceslas, patron saint of Czech beers, St. Lawrence, patron saint of cooks, St. Martha (maids, housewives, cooks, waiters and waitresses), St. Vincent (another patron for the winemakers, but then when you are so dependent on the weather, you need all the help you can get), St. Brigid of Kildare (matured cheese), St. Cecilia (music and musicians), and St. Lucas (the arts).

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On Thursday, November 10, it is St. Wenceslas, who will take center stage. Beer specialties of the Zirc Abbey – preserving traditions of 300 years – will be introduced, along with a gourmet beer dinner. Guided by historian Csaba Katona, a beer history tour will wander through the suites of the famous hotel, where heads of state, movie stars and artists have previously stayed.

On Friday and Saturday, the festival will put the spotlight on selected premium wineries, gastro exhibitors, concerts, contemporary art exhibitions, a wine tour and what promises to be a sensational wine dinner led by Hungarian food blogger and TV cooking show host Zsófia Mautner, and featuring of some of the top restaurants of Hungary.

On both days the Hotel Gellért’s unique Suite Restaurant will also welcome guests; the luxury suit with its fantastic view of the River Danube is an excellent location for Michelin-starred chef István Pesti to introduce his Dom Perignon and black truffle compositions. And both evenings will see an after party in the world famous Gellért Bath Hall, starting at 10 p.m. on Friday with a Compact Disco show, and on Saturday with a concert by Kelemen Kabátban.

On November 13, the traditional Sunday Brunch will bring the sixth St. Martin’s Day Wine Festival to a close.

Further information: borfesztivalgellert.hu/ en/

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2016. 10. 26. 21:38

Cherish every moment qatarairways.com

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2016. 10. 26. 21:38