Budapest Business Journal 2920

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BUSINESS JOURNAL BUDAPEST

VOL. 29. NUMBER 20

NOVEMBER 5 – NOVEMBER 18, 2021

SPECIAL REPORT Telecoms

SPECIAL REPORT

Telcos Scurry to Modernize on Rising Demand With the increasing push towards a more hybrid approach to work and education, our COVID-changed world has boosted demand for telecoms service providers.

Hungary’s leading telcos have ridden the digital wave, expanding services and developing infrastructure. 14 SPECIAL REPORT

Growth, Acquisitions see 4iG Heading for the Stars A significant actor in the domestic IT market in the past two decades, 4iG seems set to become one of the key players in the Hungarian and regional telecommunications market. 18

Innovative Thinking

SOCIALITE

Csíkszentmihályi: The Father of Flow

Hungarian psychologist Mihály Csíkszentmihályi, who died recently, developed a theory he called “flow” that has profoundly impacted the way we think about work and life. Flow has entered pop culture as the concept of being “in the zone.” If you’re of a certain age, you may know it as being “in the groove,” writes David Holzer. 21

NEWS

High Hopes and Representation for Hungary at COP26 Ahead of the COP26 UN climate change conference in Glasgow, the Budapest Business Journal interviewes Attila Steiner, State Secretary for the Circular Economy, Energy, and Climate Policy, about his expectations. 7

N ES BUSI

S

SMEs must be helped to realize that innovation is a vital element for generating profit, says István Szabó, vice president for science and international affairs at the National Research, Development, and Innovation Offce. So, what is the state’s R&D&I support strategy? 8

BUSINESS

BMG Returns Fully in Person for 7th Summit

Having been held as a hybrid event last year due to COVID, the seventh annual AmCham-HIPA “Business Meets Government” summit was once again held fully in person, allowing analysis and discussion of our post-pandemic future. 9

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Budapest Business Journal | November 5 – November 18, 2021

BBJ

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia Czifra,

HUNGARY, GLASGOW, COP26, AND GREEN MAT TERS

Kester Eddy, Bence Gaál, David Holzer, Levente HörömpöliTóth, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth, Zsófia Végh.

LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu LAYOUT: Zsolt Pataki PUBLISHER: Business Publishing Services Kft. CEO: Tamás Botka ADVERTISING: AMS Services Kft. CEO: Balázs Román SALES: sales@bbj.hu

With the eyes of the world firmly on Glasgow over the next couple of weeks, there is only one place where we could start this issue’s editorial, and that is with the COP26 UN climate change conference.

In commemoration of the hopes invested in this 26th “conference of the parties,” as COP should more appropriately be called, we have boosted our environmental coverage. Our Green Matters column is relaunched this week with more detailed coverage and a new, dedicated reporter. Garry J. Morrell will be better known to regular readers as our real estate editor but has long been interested in environmental issues. If you have any Hungarian environmental news to share with us, please drop me a line, and I will gladly pass it on.

(In the weeks between now and Christmas, we will be introducing three other new columns dedicated to the automotive, healthcare, and HR sectors. Look out for more information on these in upcoming issues.)

On the page facing Green Matters, we carry an interview with Attila Steiner, the state secretary at the Ministry for Innovation and Technology responsible for developing the circular economy, energy, and climate policy. We got the interview, by the way, from those good old-fashioned journalistic attributes of being out and about. At an embassy event (a screening of the new James Bond film, since you asked), I met the wife of a past Expat CEO of the Year candidate. She happens to work in this area, and agreed to pass on contact details. Video conferencing can do a lot, but there is still a place for personal human interaction.

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In our interview, Steiner talks about what Hungary hopes to get out of COP. At the risk of sounding flippant, quite a bit would seem like a reasonable answer, since the country is sending its biggest COP delegation to date to Glasgow.

Hungary has relatively good climate change credentials, as evidenced by the KPMG Net-Zero Readiness Index Steiner references. President János Áder, who attended the world leaders’ summit at the start of COP26, has long been interested in environmental issues, especially around water supply, and presents his own podcast called Kék bolygó (Blue Planet; presumably they cleared the name with the BBC).

Back in 2007, there was a story about a Hungarian company donating a reforestation project to be called the Vatican Climate Forest that was supposed to make Vatican City the first carbon-neutral state in the world by offsetting its greenhouse-gas emissions. It seems that never happened (in 2010, the Vatican was even threatening to sue), but Hungary’s forests have more than doubled in the past 100 years, according to Áder.

What Hungary wants, by the way, is a fair and balanced transition to sustainable technologies, among other things. But I will leave you to read more about that yourself. You will find the interview on page seven.

Robin Marshall Editor-in-chief

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• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities.

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THEN & NOW

Lanterns and votive candles flicker in a cemetery at Salgótarján (111 km northeast of Budapest by road, not far from the border with Slovakia) during All Hallows’ Eve (Halloween) on October 31, 2021. The black and white image from the Fortepan public archive shows a still from a graveyard in Budapest, taken in 1896.

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Budapest Business Journal | November 5 – November 18, 2021

News///macroscope

The G20 leaders have endorsed a global minimum tax of 15% on the largest multinational businesses.

After a long debate, Hungary has also joined the agreement having reached what it calls a fair compromise, according to the Hungarian finance minister.

ZSÓFIA CZIFRA

In the spring of this year, Hungary’s foreign minister Péter Szijjártó and state secretary Norbert Izer were making statements such as “It has become clear over the past decade that raising taxes is a dead-end-street,” and “[the] global minimum corporate tax rate is a ‘violation of financial sovereignty.’”

Five months later, Minister of Finance Mihály Varga announced that the Hungarian government had successfully enforced the country’s interests concerning the global minimum tax.

The leaders of the world’s 20 biggest economies, the G20, endorsed a global minimum tax of 15% on large multinational businesses at the end of the G20 summit in Rome this October.

The tax rules, part of a reform plan inked by almost 140 nations, aim to make it harder for multinational corporations, including giants like Google, Amazon, Facebook, Microsoft, and Apple,

Photo by DesignRage / Shutterstock.com

Hungary’s Pathway to Joining the Global Minimum Tax Agreement

to avoid taxation by establishing offices in low-tax jurisdictions.

The rules will also aim to end decades of tax competition between governments to attract foreign investment.

The Organization for Economic Cooperation and Development, which steered the tax negotiations, estimates the minimum tax will generate USD 150 billion in additional global tax revenues annually. It says taxing rights on more than USD 125 bln of profit will also be shifted to the countries where they are earned from the low-tax countries where they are currently booked.

Work in Earnest

The OECD started to work in earnest on the idea of a global minimum tax in 2019. This July, the organization said that 130 countries and jurisdictions, representing more than 90% of global GDP, had joined a statement establishing a new framework for international tax reform. A small group of the so-called Inclusive Framework’s 139 members had not joined at that time, the organization said.

Back then, Hungary’s State Secretary for Tax Affairs, Norbert Izer, said Hungary supported the fight against base erosion and profit shifting but believed that the fight against harmful tax competition

should not become a fight against the competitiveness of tax systems.

Besides Hungary, only two other European countries, Ireland and Estonia, did not join the initiative; Hungary stayed out mainly because it said there were many uncertainties at the time.

However, as plans were finalized in October, an acceptable compromise was made, according to the Hungarian government.

“We have succeeded in having Hungarian interests enforced,” Minister of Finance Mihály Varga announced on his social media page.

The Hungarian standpoint had been that the government would only adopt a global minimum tax that would not lead to a tax increase in Hungary or endanger the competitive advantage of the Hungarian economy but did protect the workplaces of its people.

Most importantly, Hungary ensured that its corporate tax rate would not change and could remain at a record low of 9%. The finance minister said that the country would be able to collect the global tax using a targeted solution.

Fictive Activities

According to the government portal kormany.hu, Hungary also succeeded in achieving that genuine business

activities do not have to be taxed. This means that company assets and wage payments may be deducted from the rate of tax using a special method of calculation; companies that perform activities that involve tangible assets and the actual payment of wages, as opposed to fictive activities, will be eligible for this concession.

It is also beneficial for Hungary that, according to the deal, a special rate of tax will be valid for a transitional period of 10 years, meaning that for this period, the rate of tax will be calculated using a reduced tax return and using a reduced tax credit.

Hungary started to soften its viewpoint on the global minimum tax following an exchange between Minister of Foreign Affairs and Trade Péter Szijjártó and his American counterpart U.S. Secretary of State Antony Blinken at the beginning of October.

At the meeting, Szijjártó reminded Blinken that the Hungarian government would not accept the introduction of a global minimum tax, and the public had backed the stance in July in one of the countrywide “national consultations” the government periodically runs.

The U.S. Secretary of State “indicated that this is a very important issue for the United States, so they would like to see an agreement,” Szijjártó had said in a Facebook post following the meeting.

The foreign minister emphasized that the Hungarian government was “ready for a compromise if they can agree on a regulation that does not harm the Hungarian economy and does not endanger Hungarian jobs,” the foreign minister wrote in his post on October 7. “Based on today’s talks in Paris, I think there is some chance of that.”

Just a few days later came Varga’s announcement about Hungary joining the agreement.

Numbers to Watch in the Coming Weeks The Central Statistical Office will publish data on September industrial production on November 5 and release retail trade statistics for September on the same day. On November 9, the October consumer price index will be published.

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Budapest Business Journal | November 5 – November 18, 2021

1st COVID Restrictions Return to Hungary Coronavirus ///roundup

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NICHOLAS PONGRATZ

More controversially, in the same edition, the government issued a decree giving employers the power to require their workers to be inoculated against the coronavirus “as a condition of working.”

Employers may require COVID jabs of their staff “if they deem it necessary in the interest of the safety of people working there,” according to the decree.

Employers who instruct their workers to get vaccinated must give them

to get their first jab. Employees who do not comply may be put on unpaid leave for a period of one year and may

According to the announcement, before making a decision, managers should consider whether the number of coronavirus-infected people in a building exceeds 5% of the number of caregivers and whether isolation can be provided from other caregivers and their visitors.

NNK indicated that, unlike previous waves of the epidemic, social institutions are much better protected against the virus. Social workers were among the first to be vaccinated at the beginning of the year, and many have already received their third “booster” vaccination.

In addition to these workers, most people over the age

600

September

45 days

4041

Identified in Hungary Since September 1, 2021

Number of new coronavirus infections reported per day

837

To curb the fourth wave of the coronavirus epidemic, the government has decided to reintroduce a limited number of protection measures, once again requiring the wearing of a facemask on public transport as of November 1, according to the official Magyar Közlöny (Hungarian Gazette).

Number of new Coronavirus Infections

be terminated after that period if they with its introduction. It also warned still have not been inoculated. that employers could “abuse” their new Although the vaccination campaign power to expedite layoffs. The union has been relatively successful in association said Hungarians’ propensity inoculating the majority of the to get their COVID jabs could be boosted population, some still oppose its with measures other than ones that mandatory implementation. “strengthen the employers’ position while While the Hungarian Unions increasing workers’ vulnerability.”

Association (MASZSZ) acknowledged Visitation Ban the importance of inoculation against The leaders of social institutions have the coronavirus, they issued a statement saying the government decision allowing also been handed powers to protect their charges against the coronavirus. employers to require their employees The National Center for Public Health to get COVID jabs as a condition for (NNK) declared that the heads of all working is “unacceptable.” institutions providing specialized MASZSZ complained that unions were care in Hungary could order a ban on not consulted on the measure and said visiting or leaving the institution. a “number of issues remain unclear”

and those with a chronic illness have also been vaccinated, as have many people aged 12-18, virologist Miklós Rusvai said on TV news channel M1.

However, he emphasized that the group in between are at higher risk due to lower vaccination rates, and as a consequence, the average age of coronavirus patients has been declining.

Meanwhile, another 300,000 doses of the COVID vaccine developed by Pfizer and BioNTech were delivered to Hungary in the past two weeks, bringing the total to 9.9 million jabs.

Buoyed by its high vaccination rate, Hungary continues to provide medical assistance to countries in greater need. For instance, it recently sent 40 ventilators, 1,650 face masks for noninvasive ventilation and 3,000 boxes of favipiravir, a drug used to treat coronavirus patients, to 20 hospitals in Romania, mainly in Transylvania, to help the country’s pandemic defense efforts, according to Minister of Foreign Affairs and Trade Péter Szijjártó.

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Budapest Business Journal | November 5 – November 18, 2021

News | 5

Wing and Accor Agree Hotel Development Wing and Accor have concluded a long-term agreement for a 12,000-plus sqm hotel at the 42,000 sqm Liberty office development complex for a dualbranded hotel under the Ibis and Tribe names. The 3-star ibis and the 4-star Tribe will each operate half of the building, with 332 rooms. This will be the first Tribe Hotel in Hungary.

GARY J. MORRELL

Construction is underway, with the hotel due to open in the fall of 2023, according to Wing. The south wing’s ground floor will house the reception and lounge facilities, which will also function as a business area. The hotel will include a conference and event venue with a capacity for 220 people, a restaurant, and a gym. The rooms will be located

bicycle racks with changing rooms and showers, and electric car charging stations. A rooftop bar will be available to hotel guests and tenants.

The mixed-use hotel-office south wing is expected to be completed in early 2023, while the development of the 20,000 sqm north wing is taking place simultaneously and is scheduled to be completed by late 2023.

Liberty Hotel by Wing. on the fifth to eighth floors in the first phase of the two-phase development.

“As a multifunctional building, Wing’s flagship development, Liberty, will have a unique position in the Hungarian real estate market. The synergy of the hotel function and the office spaces in the building will offer unparalleled opportunities to modern businesses,” says Norbert Schőmer, deputy CEO and manager for office development.

The recovery in the Budapest hotel market has been slow since the removal of travel restrictions due to the coronavirus.

However, real estate consultancy CBRE estimates that 1,140 hotel rooms will be opened in Budapest this year.

“While performance metrics clearly show that demand for hotels decreased due to the effects of COVID-19, hotel development did not plummet.

Planned hotel pipeline peaked just before the pandemic, and while there were international delays in 2020,

most of the announced developments are being realized in 2021 and 2022,” comments CBRE.

Easy Access

The location of Liberty will make the hotel complex suitable for both business travelers and tourists with a direct road link to the Budapest Ferenc Liszt International Airport and easy access to the city center. Wing is aiming for BREEAM “Excellent” certification for the building, located in District IX on the outer Budapest boulevard at a tram, metro, and road transport hub.

The complex, penned by DPi Design Studio, will include a rooftop running track and sports fields, a 1,000 sqm quiet interior garden with outdoor workstations,

“While performance metrics clearly show that demand for hotels decreased due to the effects of COVID19, hotel development did not plummet. Planned hotel pipeline peaked just before the pandemic, and while there were international delays in 2020, most of the announced developments are being realized in 2021 and 2022.”

Wing has developed 1.2 million sqm of space in Hungary and has ongoing projects in the office, industrial, retail, hotel, and residential property sectors. The company is looking to expand in the Central and Eastern European region and is the majority owner of the Polish developer and investor Echo Investment, which is listed on the Warsaw Stock Exchange. The company has also purchased two office buildings in Sofia.

According to Cushman & Wakefield, the Budapest office pipeline for 2023 stands at 362,000 sqm, 57,000 sqm of which is already pre-let, according to Cushman & Wakefield.

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Top Real Estate Executives in Hungary 2021 The Top Real Estate Executives magazine is a special annual publication of the Budapest Business Journal. The magazine presents the profiles of the most influential real estate executives in the Hungarian economy. It puts a human face on the local development market, focusing on leading personalities’ profiles and outstanding achievements.

Please forward your subscription request to: circulation@bbj.hu, or order your copy in the webshop at www.budapestbusinessjournal.com

• Provides an essential overview of how Hungary’s real estate system operates.

• Get an insight into the most significant developments in 2020, and a look at what is in store for 2021.

• Get to know the personalities behind the real estate business.

• Read personal accounts from the country’s top real estate executives detailing how they got into the business and some of their proudest achievements, among other things.

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Budapest Business Journal | November 5 – November 18, 2021

change the future of the transportation environment. Because, in terms of environmental protection zones, congestion charges, or electric mobility, the CEE region is a bit behind the Western European countries,” Barta explains.

“It is expected that these elements will be introduced more and more into the CEE region to meet the decarbonization goals, but also to increase public health and air quality as well,” he says.

Urban Mobility

COP26 has Implications for Central and Eastern Europe

Graphic by urbanbuzz / Shutterstock.com

Climate change has come to the fore of the news agenda and social and political activism, with the COP26 United Nations climate change conference in Glasgow. Questions remain about how the event could impact Hungary and the wider Central and Eastern Europe region regarding energy usage, transportation policy, air quality, built environment, raw material use, and air quality.

GARY J. MORRELL

“Energy usage is more and more the subject of two main drivers: decarbonization and energy consumption reductions. COP26 will most likely strengthen these two elements, as the EU’s decarbonization strategy and EU climate law sets ambitious but also clear targets in this regard,” comments Zsombor Barta, founding partner at Greenbors Consulting and president of the Hungary Green Building Council (HuGBC).

“To reach zero-carbon operations in 2050, energy production must be transferred to low- or zerocarbon [sources], and overall energy consumption must also be reduced. This will cause major changes in Hungary and Central Europe, as a significant amount of energy is still generated by coal or natural gas,” he points out.

“Further, residential [buildings] especially are the subject of deep renovation strategies to meet the ambitious targets and zero-carbon

Energy Efficiency Central to Climate Goals As 90% of the buildings standing today will still be in use in 2050, climate goals can only be reached if the considerable potential in the energy-efficient renovation of the existing building stock is realized, according to Regina Kurucz, LEED Green Associate and building energy assessment professional. “Architects and designers have to realize

requirements. This will certainly affect the Hungarian and Central European markets,” Barta adds.

EU climate law and the overall decarbonization strategy are also impacting transportation policy. Some countries have already announced that internal flights will be forbidden and short distance flights will be eliminated, such as Budapest-Vienna.

“This will change the transportation environment a lot. Also, the focus on alternative transportation, electric mobility, shared mobility, etc., will

that every design decision has its environmental, social and financial impact. Architects and designers have to integrate life-cycle analysis, life-cycle costing, and energy modeling at an early stage of their design process,” she said.

PwC to invest in CEE ESG advisory Global consultancy firm PwC says it plans to invest EUR 5 million

“Air quality is connected to urban mobility/transportation and industrial activities. I think COP26 will also strengthen the view that urban mobility must be changed to reduce CO2 emissions but also to increase livability and air quality,” Barta believes.

“However, it is important to mention that the air quality issue has to be managed in a sustainable way; not only cars are responsible for emissions, but also ships and different heating sources.

Unfortunately, areas with high poverty are also subject to poor air quality in the CEE region – and this must be changed somehow as well – but this issue is more complex,” he adds.

According to Regina Kurucz, head of the HuGBC working group, COP26 goals will affect building development strategies. Real estate in areas where renewable energy sources, clean air, modern transportation, and connection to nature are a given or feasible with low effort will have an advantage. As ESG reports and green certifications become the cornerstones of development, these contributing factors are the new baseline.

“A global framework of principles is required for accelerating sustainability performance, to be adapted and verified at the local level that aligns to the 1.5 degrees [global warming] trajectory,” says the World Green Building Council.

In the meantime, raw material usage is increasing worldwide. “I do not see huge changes or signs of a real reduction in raw material usage,” Barta confirms.

“Unfortunately, we are still discussing the opening of new gravel and sand fields [in Hungary], but in the rest of the CEE, raw material usage is not reducing. I do not see a huge effect on this increasing trend coming from COP26, although all specialists agree that this is a huge problem, and one has to tackle this issue to direct our activities in a more sustainable direction,” Barta concludes.

over the next two years to develop services dedicated to ESG policies in CEE. The company also plans to establish a center of excellence to advise clients on ESG strategy and reporting. “Under pressure from regulators, investors, and society, the business community must demonstrate that it can create long-term value by managing ESG issues,” says PwC.

CPI Commits to Renewable Energy Developer CPI Hungary has announced that it will supply the electricity needed to run its property portfolio exclusively from renewable sources from 2022. This ties in with a groupwide policy only to purchase electricity from renewable sources from 2024 and aims to reduce greenhouse gas emissions by 30% by 2030. “It is of utmost importance for CPI Hungary to maximize the use of renewable energy in our property portfolio, thus significantly reducing the ecological footprint of our buildings. In addition, we are pleased to see that more f our tenants are specifically requesting that we provide them with green electricity. Our company’s conscious building concept, which encourages tenants to act responsibly and environmentally consciously, is taken to a new level with the green energy purchase,” said Mátyás Gereben, country manager of CPI Hungary.

33% of Plastic Waste Recycled Some 33% of packing waste in Hungary is recycled, among the lowest in the EU, according to data compiled by EU statistical agency Eurostat from 2019. This rate is under the 41% seen for the EU as a whole. According to the latest available data, rates are the lowest in Malta with 11% (albeit based on 2018 data), followed by France at 27%. The plastic package recycling rate of Hungary’s Visegrád 4 peers stands at 61% in the Czech Republic, 53% in Slovakia, and close to 32% in Poland.

ESG Investing Significant Impact on Private Capital Preqin, the global advisers on alternative assets data, tools, and insights, has explored some of the crucial issues around implementing ESG criteria into investment practices, the impact of climate change on investments, how investors are approaching greenwashing, and how regulators are stepping up their efforts. The report “ESG in Alternatives 2021: Navigating the Climate Crisis” says the desire to integrate ESG principles is running high with private asset investors and managers worldwide; 76% of investors have seen an increase in demand for ESG capabilities over the last 12 months.

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Budapest Business Journal | November 5 – November 18, 2021

High Hopes and the Highest Representation for Hungary at COP26 Ahead of the COP26 UN climate change conference in Glasgow, the Budapest Business Journal interviewed Attila Steiner, State Secretary for the Development of Circular Economy, Energy, and Climate Policy at the Ministry for Innovation and Technology, about his expectations.

BBJ: Hungary is sending its biggest delegation to date to Glasgow. Why such a large party?

BBJ: What does Hungary hope to see from COP26 for itself, the region, and the planet?

AS: According to the last report of the Intergovernmental Panel on Climate Change (IPCC), approved in August 2021, reaching climate neutrality is a precondition for capping global warming between 1.5 °C and 2°C, and for the major, sustained, and largescale reduction in all greenhouse gases.

We hope that this aspiration of the European Union and its Member States will inspire other countries, especially major emitter economies, to commit themselves to reach climate neutrality by mid-century (along with more ambitious climate action). Thus, we hope to come to an agreement on outstanding issues on the implementation of the Paris Agreement aiming to keep global warming below 1.5°C, including the rules of a new emissions trading system;

out and a just transition, as well as green mobility. We aim to phase out our last remaining coal-fired units of the Mátra Power Plant by 2030 at the latest. To ensure a sustainable and just transition for the region, we are implementing a strategic project through EU- and national co-financing and the partnership of 22 stakeholders. The Hungarian Green Bus Program is one of the most ambitious green mobility programs in Central Europe, which enhances green mobility solutions in cities and broader areas, such as the Mátra region.

BBJ: The government has made great efforts to boost the contribution of solar power to the energy mix. There seems no such enthusiasm for wind. Why is this so?

ROBIN MARSHALL

Attila Steiner: Yes, our COP26 delegation consists of 44 delegates, of which 17 represent civil society and the scientific sector. Compared to previous years, the number of participants from the civil and scientific sectors (the so-called Party Overflow delegates) has increased substantially. Hungary will be represented at the highest possible level at this year’s COP, as our Head of State, President János Áder, took part at the World Leaders Summit, delivering our national statement at the conference. Our negotiation team, as part of the EU group, will participate throughout the conference. COP26 is taking place at a globally crucial moment to enhance the green recovery and commit to ambitious climate action to achieve Paris Agreement goals.

News | 7

Attila Steiner plus on advancement regarding climate adaptation and funding the fight against climate change that could step up climate action throughout the world.

BBJ: Do you have any concerns that environmental regulation might harm Hungary’s competitiveness?

AS: Over the past decade, our economic growth has been decoupled from greenhouse gas emissions, which means we achieve GDP growth while we keep reducing our emissions. According to projections, this tendency is set to continue through investment in our economy’s just and green transition; we are approaching climate neutrality, to which goal Hungary is fully committed.

All in all, a gradual green transition is an absolute necessity. However, it can only occur if the industrial and economic changes required do not impose a disproportionate burden on society and do not impair the competitiveness of EU businesses or endanger thousands of jobs. It is crucial that the transition to sustainable technologies does not disproportionately hamper economic growth or lead to mass shutdowns.

This would affect the entire society, and there is a risk that we may lose its support, which is otherwise a source of pressure to stimulate change. I believe that industries facing a significant risk of losing competitiveness need to be effectively protected. If we make people exasperated with climate policy, that could cause an end to all climate action. We should not risk our future

by choosing the wrong measures to reach our targets. Hungarian people and companies believe it is essential to act against climate change; we have to make it possible for them to make headway.

BBJ: What are the most significant environmental challenges facing Hungary?

AS: Global climate change affects Hungary and the Carpathian Basin region with above-average warming levels. We already see unexpected, extreme weather events, more frequent and longer-lasting heatwaves, sometimes heavy precipitation, then drought, for example. Forests, which are supposed to absorb more and more carbon dioxide, are highly vulnerable to changes in climate zones. Complex issues also need to be addressed in water management, agriculture, public utilities, food security, and many other sectors.

The Hungarian Government adopted a comprehensive report on the effects of climate change in the Carpathian Basin in January 2020, which provides a significant scientific base and foundation for all our major strategies and action plans in energy and climate policy.

BBJ: Which areas present the most significant opportunities for the country?

AS: We see great opportunities in green investments as we are committed to achieving our ambitious goal of becoming climate neutral by 2050.

We especially welcome the priorities of the British COP Presidency, such as the ending of carbon dioxide phase-

AS: Our country is particularly wellsuited to generate large quantities of electricity from solar panels, so with the Climate and Environmental Protection Action Plan announced last year, our goal is to increase the output capacity of solar power plants sixfold in 10 years. In mid-October, the government launched a large-scale HUF 201 billion grant application program for enterprises, and one for households will start in December. The tender is the largest EU Recovery Instrument program in Hungary, pre-financed by the government from the newlyestablished National Recovery Fund.

The call for tender will help sustain the results of the energy consumption cuts by enabling families, who otherwise would not be able to invest in solar panels, to become more self-sufficient in electricity generation. Almost 35,000 households earning less than the national average income will benefit from this incentive, 11,600 of which will be eligible to receive funding for heating system upgrades.

Wind energy already comprises a part of our renewable energy mix, but due to our natural conditions, weatherdependent renewable energies can be exploited to varying degrees across the country. A comparison of solar and wind energy shows that we are better off with the former than with the latter.

BBJ: Are there any uniquely Hungarian approaches to environmental issues?

AS: Hungary used to be unique in opposing the idea that the most vulnerable groups should pay the cost of ambitious climate policies; however, now our example seems to be followed by more and more countries, both in Eastern and Western Europe, and they opt for regulating gas and electricity prices.

The fact that our country is making earnest efforts to protect the climate is even recognized by KPMG’s recent study, the Net Zero Readiness Index (NZRI), which assesses the performance of countries according to their decarbonization strategies. In this list, Hungary ranks 13th, ahead of countries such as the United States, Singapore, and Australia. Even better, we are one of the top five countries with the highest scores in the area of legislative action. Of course, the occasion for this survey was the COP26 climate summit in Glasgow, where I believe we have nothing to be ashamed of; quite the contrary.

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Budapest Business Journal | November 5 – November 18, 2021

Business PRESENTED CONTENT

Bringing Innovation Consciousness to Hungary’s Businesses

While state expenditure on research, development, and innovation (RDI) is growing, there are several areas where supporting RDI is not a matter of money.

Small- and mediumsized companies must realize that innovation is a vital element for generating profit.

István Szabó Ph.D., vice president for science and international affairs at the National Research, Development and Innovation Offce, sat down with the Budapest Business Journal to explore the R&D support strategy.

BALÁZS BARABÁS

BBJ: On what is Hungary’s RDI financing system based?

István Szabó: A few years ago, we restructured the financing system of RDI to mirror Horizon Europe, the framework program for supporting RDI across the European Union. The basic concept here is that if you want to impact RDI, both in terms of science and innovation, you have to make sure you form some critical mass among the scientific branches and create networks between science and innovation. To this end, Horizon Europe came up with the concepts of “mission-oriented research” and the “challenge-based” approach of RDI projects. Again, you have to form within the communities certain hubs capable of making breakthrough achievements in their respective thematic fields. These are not only scientific disciplinary fields. Climate change is an excellent example here because it is not just about engineering and environmental sciences

To support these two concepts, we recently launched the “Thematic Excellence Program.” It aims to help institutions strengthen their respective fields, and it targets mainly RDI. It is essential for the institutions to be able to provide a single point of contact for each of these thematic fields. This is pretty much in line with the concept of national laboratories, launched last year.

These serve as a single point of contact, but they incorporate all the relevant scientific players for each thematic field identified by the national laboratories.

We believe that domestic science needs to be part of the international networks, so we encourage researchers to go global.

With the national laboratories, we are trying to make sure that institutions have international access as well. In the case of thematic research, it is also important that the institutions conduct their R&D and contribute to national innovation.

There is what we call the European Paradox: Europe is strong in R&D and not very strong in innovation. Hungary is no exception because we are still lagging in innovation performance, mainly because most Hungarian enterprises do not really see why they should innovate. This is surprising because surveys show that innovative companies have nearly twice as much revenue per employee as those who don’t innovate.

BBJ: How can doctoral students cooperate with companies?

István Szabó but also involves economics and society, in a way. This is the concept of the so-called “challenge-based” approach, which we have primarily mirrored in designing our RDI funding.

BBJ: How is this done specifically?

ISz: We have three main “pockets” in RDI funding. The first is for individual researchers, and we support what we call “curiosity-driven” research activities.

There are two criteria for providing funding: one is obviously the researcher’s curiosity in a topic, and the other is that a researcher already has a proven track record of achievements. This concept is pretty much in line with international best practice, meaning individual researchers are granted the funding based on their previous successes. We have also introduced “scientometrics,” a system for measuring scientific performance. Thus we can make sure that we fund curiositydriven research for those who will likely impact their respective scientific branches.

This logic pertains to researchers who already have a proven track record, but it is also the funding scheme for the to-be scientists. For this reason, we have introduced the New National Excellence Program, which provides

funding to students at the earliest stage of their studies, to help them begin their research. In their first years, they may not make any impact, but they will become familiar with the concept and methodology of research. For the final years of the academic activities, covering the full spectrum of a research’s career path, we offer the “Up with Science!”

(Tudományra fel!) program, aimed at doctorate graduates who have received their degree in the past three years.

The second pocket of funds is, again, in line with the Horizon Europe concept.

This is for the institutions where the topdown and the bottom-up approaches of RDI are somewhat mixed. Bottom-up here means that higher education institutions have to find the fields of comparative advantage where they can allocate their resources and show the international community that they are strong in particular thematic areas, which, again, are much broader, such as the health industry. Here institutions have to decide the directions in which they go to have a lasting impact. As for the top-down approach, together with the scientific community, we have identified some challenges, and we expect higher education institutions to respond to them.

ISz: Innovation never happens by itself.

We have to create specific networks of innovation. That is why we have introduced regional platforms for companies already active in innovation in their region and those potentially interested in it. Here, innovators can provide newcomers with their insight, advice, and connections.

At the individual level, there is the Cooperative Doctoral Program, launched in 2020. Doctoral students can conduct their Ph.D. studies in their way, working along with a professor. But there’s also an external consultant from a private enterprise who, by introducing the student to its business needs, can drive the research toward innovation, and the research findings can be utilized by the enterprise. This is how the academic sector and private businesses can cooperate on the level of innovation.

Finally, funds from the third pocket go to businesses and address business innovation. We are pleased to see that the demand for RDI support in the business sector has been steadily increasing. The tendency in the number of new patents has also been pleasantly improving for the past two-to-three years. Patents are crucial for any business as they are the signs of conscious innovation; I am convinced that such innovation consciousness will be the key to our success in the coming years.

Description of the new Open Science initiative: nkfih.gov.hu/openscience Description of the international Frontline Research Excellence Programme nkfih.gov.hu/english/forefront

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Budapest Business Journal | November 5 – November 18, 2021

Having been held as a hybrid event last year due to COVID, the seventh annual AmCham-Hungarian Investment Promotion Agency “Business Meets Government” summit was once again held fully in person on October 21, allowing analysis and discussion of the macroeconomic trends that will lay the foundations of our post-pandemic future.

ZSÓFIA VÉGH

In his opening speech at the conference, held at the Marriott Hotel Budapest, the Minister of Foreign Affairs and Trade Péter Szijjártó talked about what made Hungary stand out from Europe in handling the pandemic. The key was that Hungary realized early on that the coronavirus was not only a healthcare challenge but would also have severe effects on the economy, he said.

The major debate last spring was around whether the state should finance unemployment or the prevention of it, he said. “We decided on the latter and put together the most robust investment incentivizing program to date.”

Last year a total of 1,435 companies decided to take advantage of the scheme, he added. As a result, HUF 1.7 trillion in investment has been made and 270,000 jobs saved, with 22 U.S. companies involved in the program securing 14,000 jobs.

Meanwhile, the state had not ended the regular cash incentives available before the pandemic either, Szijjártó noted.

Photos by Hajnalka Hurta and Lázár Todoroff

Business Meets Government Returns Fully in Person for 7th Summit

Minister of Foreign Affairs and Trade Péter Szijjártó.

Of this, USD 220 million in investment was related to U.S. companies, and 15 new contracts were signed. American companies created the highest number of jobs in 2020, the minister said.

Talking of records, Szijjártó highlighted that the country has never seen such a high growth rate as in the second quarter of this year (18%), and there have never been so many people employed since the days of Communism.

During the summer, the economic performance of the country reached the level of the pre-pandemic times, Szijjártó continued, adding that the global economy will only arrive at a similar stage in the second quarter of next year according to forecasts.

“This means we are 1.5 years ahead of the level of the global economy”, he said.

Quicker Reopening

Launching an extensive vaccination program earlier than many countries was one reason for that “advantage,” Szijjártó said, as it allowed Hungary to reopen sooner than most European states.

“The second reason was that you kept people employed, invested in new capacities and modernized technologies so when it comes to the global race for the redistribution of the economic capacities, without exaggerating, I can say that Hungary is one of those who won,” Szijjártó told the audience.

AmCham president Zoltán Szabó.

The minister also talked of future plans, including further investment in higher education, digitization, and the steps the state has taken to ensure the security of the energy supply.

Deputy Governor of the National Bank of Hungary (MNB) Barnabás Virág gave a brief overview of the country’s macroeconomic performance after the pandemic.

“Only 11 member states of the EU have been able to reach pre-crisis GDPlevels; six of these are from the CEE region, including Hungary,” he said.

Looking ahead, the region and Hungary will also be the fastest to recover from the pandemic, he added.

The country is in a good position in terms of employment, having managed to retain and even increase its employment rate.

“We were able to hold the rate of investment at a relatively high level, at around 27%,” Virág said. Keeping this rate high had contributed to a great extent to the country’s recovery, he noted.

Top Priority

Inflation is a top priority for Hungary, and elsewhere, the deputy governor said.

Once economies reopened, inflation rates jumped. Supply chain disruption, soaring fuel and commodity prices, and environmental issues have been the main factors behind it. Since rapidly rising inflation can jeopardize the recovery

Robin Marshall editor-in-chief of the BBJ and Fabian Zuleeg, chief executive of the European Policy Center.

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process, it is critical that the MNB focus on the fight against it, Virág said.

“We were among the first central banks in Europe to have opened a monetary tightening cycle in June, and we will go as long as is needed.”

Turning to future challenges, Virág highlighted several areas. “The labor market shortage bottleneck reappeared, and the competition for talent will be tougher, though still quite far from what Western economies have,” he acknowledged. In the future, wage convergence will continue, and Hungary must increase salary levels and improve productivity. It will also have to prepare for an extremely rapid digital transformation, he added.

In the third section of the plenary, Fabian Zuleeg, chief executive of the European Policy Center, and Robin Marshall, editor-in-chief of the Budapest Business Journal, discussed the challenges Europe faces in a global competitiveness race.

“Sustainability is not an option.

This is an existential question. If we continue to put it off, we are not going to address the problem and what we are going to end up with is a global ecosystem that is not functioning,” Zuleeg said, addressing a question from Marshall on the greening efforts of the continent. “We can discuss how quickly this transition should take place and what sensible steps are along the way.”

He also emphasized the need for Europe to catch up in many areas in new technology where it is currently lagging.

“One way to catch up is to create the right frame to boost not only public but private investment,” he said.

“Trans-Atlantic ties are the most important ones we have in the world in terms of business volume, etc.,” Zuleeg said regarding relations between Europe and the United States. “But we should also note that the U.S. acts in its own interest, and that will not always coincide with those of Europe.” He added that the key focus of the current administration is China, “and that will affect our transatlantic relations.”

The plenary meeting was, as usual, followed by several breakout sessions to discuss matters in more detail. With panels drawn from various government ministries and departments, experts, and relevant businesses, audience members could choose from: Business Environment; Digitalization and Data; Healthcare, Labor and Employment; and Sustainability. These sessions were followed by lunch and networking.

Deputy Governor of the MNB Barnabás Virág.

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Budapest Business Journal | November 5 – November 18, 2021

PRESENTED CONTENT

Cutting-edge Biomedical Research From Hungary Whether for cancer or cardiovascular disease, in-depth biomedicine research is underway at the Hungarian Center of Excellence for Molecular Medicine, thanks to a dedicated group of topnotch researchers.

Industrial partners now have the chance to team up to help turn invaluable research results into reallife success stories.

LEVENTE HÖRÖMPOLI-TÓTH

Biomedical R&D is fast gaining ground in Hungary, and one clear indicator of this is the Hungarian Center of Excellence for Molecular Medicine (HCEMM). Some 16 research groups, with more than 120 staff, have already been established; at least six more groups will be added before this year is out.

The operational concept relies heavily on collaborations with academic and industrial partners; the idea is to conduct cutting-edge biomedical

an advanced genomic characterization of these tumors using cutting-edge genetic technologies has enormous potential in the fight against cancer.

Blood Diagnosis

research that holds the promise of longterm commercial success. The focus of research topics at HCEMM seems sure to ensure the latter since they cover the leading causes of aging-related disease, an essential aspect for Western societies in general and the Hungarian population in particular.

A key research pillar concerns cardiovascular and metabolic conditions.

As junior researcher Zoltán Varga explains, digging deep into identifying connections between cardiac diseases and metabolic co-morbidities, such as obesity, diabetes, or even liver issues, has become a hot topic.

“We strive to determine what is common in these additional conditions; we look for inflammatory mechanisms to find the actual link between them and cardiovascular problems,” Varga says. Take non-alcoholic steatohepatitis, for example, a long-term consequence of obesity. By examining a so-called “interorgan cross-talk,” it is possible to investigate how this liver disease can harm the heart.

“The problem is that there is no dedicated medicine to cure nonalcoholic steatohepatitis, which is now also considered a cardiovascular

Csaba Bödör

“Liquid biopsy is one of the key areas where we aim to achieve a breakthrough,” Bödör says. “Blood carries traces of tumorderived DNA, so-called cell-free DNA. The idea is to use these molecules for early genomic characterization of the tumors as well as sensitive disease monitoring.”

This is significant as, in some instances, no tissue sample can be obtained during the follow-up of the disease.

“Of course, the best would be if blood samples were enough by themselves, and tissue samples could be replaced entirely. But for now, examination of tissue samples still Zoltán Varga represents the gold standard of cancer diagnostics,” Bödör adds.

Indeed, diagnosing all kinds of diseases from blood, but most of all co-morbidity. Tests do exist, and different types of cancer, has been a development is underway, though,” long-held dream. But the recent scandal Varga says. And new molecular research of Theranos is perhaps the best example might pave the way to find a solution. of why this ideal scenario is still a long Dead-end Development? way off. Theranos’ business model was “Drug development faces a dead end based around the idea that the company here in a way. To date, preclinical tests could run blood tests using proprietary have been run using healthy, young technology that required only a finger male animals to keep research costs pinprick and a small amount of blood. down. However, the humans that The tests were supposed to be able to will eventually get the treatment are detect medical conditions like cancer normally old, suffer from co-morbidities, and high cholesterol. The startup, which and around half of them are female,” at one time had a USD 9 bln valuation, the expert adds. Therefore, research collapsed once it was revealed that their should be redirected to deal with tech was a fraud. multiple co-morbidities and offer “Precisely because of such incidents, help to all patients. it’s crucial to keep the public informed Another segment where Varga is about the availability of treatments active is drug repositioning. Making that actually work and have been existing drugs suitable for treating tested,” Bödör says, emphasizing that multiple diseases can dramatically research in this area has a fair chance of short-cut development. One example is moving from development to trial phase gout medicine, which researchers could relatively fast, within a few years. thus alter to improve heart disease “What we are working on can improve treatment as well. risk assessment as well,” he says.

On the other hand, certain drugs “Detecting genetic alterations in liquid have undesired side effects that biopsies also has the potential to predict harm the heart directly. Even the an impending clinical relapse.” new immunotherapies developed HCEMM is co-funded and frequently against tumors typically do so, reviewed by the EU Teaming Grant and causing cardiovascular issues such as works closely with its Scientific Advisory myocarditis and heart failure.

Panel to ensure the high quality of the “Our job is to eliminate such side work done. Funds are also granted by effects, but first we need to figure the Hungarian National Laboratory out why certain patients develop Program of the Ministry for Technology them in the first place,” Varga says. and Innovation and contributions from HCEMM uses advanced animal HCEMM’s owners. tests for this purpose.

HCEMM’s world-class R&D activity The genetic roots of hematological predestines the facility to be a sizeable tumors are also high on the agenda. piece in the global biotech research One of the research objectives is puzzle. At the same time, industrial to identify biomarkers and genetic partners are constantly being sought to mutations from the blood to help help turn research into real-life solutions. develop diagnostic approaches and To laymen’s eyes, it certainly seems that tools for better therapy. This is Csaba whoever joins forces with this team can Bödör’s area of expertise; he says that surely expect high-level results.

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Budapest Business Journal | November 5 – November 18, 2021

Monetary Tightening Will be Transitory. Inflation is Here to Stay.

Monetary policy over the past few years has been the most accommodative in the history of financial markets. The U.S. Federal Reserve has been purchasing about USD 80 billion in U.S. Treasuries and USD 40 bln in mortgagebacked securities per month. The European Central Bank and other major central banks are following similar policies.

Global Debt as a Percentage of Global GDP 360% 350%

356%

340% 330% 320% 310%

LES NEMETHY

The Fed has now changed the game.

Recently released minutes of the September Federal Reserve meeting indicate that, by mid-November, the Federal Reserve will begin to taper bond purchases by USD 10 bln in bonds and USD 5 bln in mortgagebacked securities per month. This would imply completion of tapering by mid2022, after which the Fed might choose to raise its benchmark interest rates.

Similarly, the Bank of Canada recently announced its intent to reduce hyperaccommodative monetary policy.

Bond purchases drive the price of bonds up, hence yields and interest rates down, serving to prop up financial markets. The concern is that, by tapering bond purchases, interest rates may rise, and financial markets may crash, as happened during the 2013 “taper tantrum,” compelling central banks to augment bond purchases to new heights to prevent a full-blown recession or depression.

This article looks at whether central banks will succeed in this newest round of monetary tightening, or whether a repeat of the 2013 taper tantrum is likelier; and if we do

experience a taper tantrum, what is 300% the fallback strategy for central banks?

14 16 18 20 On the first question, I am of the view Source: International Institute of Finance, Axios that a repeat of the 2013 taper tantrum is the likelier scenario.

History would judge today’s central bankers irresponsible if they did not at least try to wean the world from all United States, EU, and other developed this monetary stimulus, which creates a countries, today’s inflation rates are closer crazy world of negative interest rates and to 5% and accelerating. Many central distorted economic signals; interest rates, bankers are stretching the timeline of the price of capital, are perhaps the most what they mean by “transitory.” important set of prices in the economy.

We are seeing a self-inflicted energy Why do I believe this latest balancing price shock caused by poor planning act of tapering will fail? Two very simple in transitioning to a green economy. reasons: much higher global debt levels Wind does not always blow, and the and much higher inflation than in 2013. sun does not always shine: alternative As can be seen from the chart, total energies today are singularly incapable global debt (government, corporate and of supplying baseload energy. individual) has surged from below 310% Meanwhile, capital expenditures to in 2013 to more than 355% in Q4 2021. bring new fossil fuels on stream have The world today is less capable of significantly diminished. withstanding higher interest rates than Two other major supply-side in 2013. Given the mountain of debt, bottlenecks facing the world today are even a modest rise in interest rates microchips and shipping containers. will squeeze corporate profits, trigger Most experts maintain that it will take mortgage defaults, and swell deficit years for these bottlenecks to work spending by governments, triggering at themselves out of the system. least a recession and an adverse reaction If you accept the view that these and by financial markets. other bottlenecks will continue to exert Inflation is also in a very different place inflationary pressures for the next few today compared to 2013. Whereas back years, within that time horizon, the then, inflation was well below 2% in the expectation of higher inflation may

The Corporate Finance Column be enough to prevent inflation from settling back to lower levels. The anticipation of higher non-transitory inflation rates could drive interest rates up, once again contributing to the likelihood of a tantrum.

The fallback scenario is financial repression. Under this scenario, central banks would perform whatever bond purchases are necessary to keep treasury rates at 4-6% lower than inflation, allowing governments to inflate away the national debt.

This has been done successfully at various historical junctures (for example, in the United States during the post-World War II decade). Financial repression is a form of institutionalized theft, with savers (e.g., anyone holding cash or debt, such as pensioners and pension funds) subsidizing borrowers (including governments).

In conclusion, both equity and bond markets are likely to experience headwinds in the coming months. At some point, when economies can no longer support higher interest rates, markets may experience a taper tantrum (resulting in a crash of both bond and equity markets). Having failed at weaning the world from monetary expansion, central banks may settle for a policy of financial repression.

Brace yourself for market volatility, followed by financial repression.

Disclaimer: This article is for educational purposes only and must not be construed as investment advice. Investors should obtain their own financial advice.

Les Nemethy is CEO of Euro-Phoenix Financial Advisers Ltd. (www.europhoenix. com), a Central European corporate finance firm. He is a former World Banker, author of Business Exit Planning (www.businessexitplanningbook.com), and a previous president of the American Chamber of Commerce in Hungary.

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A Smart Parking Solution so Seamless, one can Easily Miss It Rollet owner András Dubitz talks with the Budapest Business Journal about the startup’s smart parking system, its recent acquisition, and expansion plans.

BENCE GAÁL

BBJ: How many people make up the Rollet team?

AD: In our four-year history, we have had a team as large as 25, split pretty evenly between hardware/ software engineering and operations.

We aimed to step out into international markets in early 2020, but we all understand the reasons why we had to postpone this.

BBJ: How did the core idea of Rollet come about, and how did your startup journey begin?

András Dubitz: The idea of Rollet came about in 2016 when electronic payments were developing rapidly, and we wanted to improve the convenience of payments vastly when driving. Since our car and its license plate are uniquely identifiable and well protected legally, Rollet essentially turns it into a giant credit card, much like many of our phones or watches.

We also realized that the system we developed is vastly superior in capability and performance to most existing parking management solutions. Many office and industrial customers such as Graphisoft Park and Audi Hungaria chose us to solve their parking pain points and the rest is history.

WHO’S NEWS

András Dubitz BBJ: How does the company’s contactless parking solution work?

AD: Rollet primarily relies on your car’s number plate; once you register in the Rollet app with your car and credit card, you can simply drive in and out of off-street parking facilities without doing anything, literally. On top of that, you get your parking ticket directly pushed to your phone, and

Do you know someone on the move? /// Send information to news@bbj.hu

Roche Hungary Announces Managing Director Significant changes are taking place at the Hungarian subsidiary of the Swiss Roche Group, with the arrival of new managing director Raffaella Bondi and the company’s planned move into the Budapest One Office building, according to a press release sent to the Budapest Business Journal.

Raffaella Bondi With almost two decades of experience in a wide range of areas across the Roche Group, from diagnostics to pharmaceuticals and diabetes care, Bondi has previously worked in Switzerland, Denmark, and her native Italy.

– especially useful in Hungary – you get your VAT invoice electronically as well. Behind the scenes, we have a cloud-based backend system that powers everything from monitoring parking activity to secure payments, and ultimately customer support is available 24/7 to resolve any outlier problems that could come up.

The Swiss pharmaceutical company F. Hoffman-La Roche, which celebrates its 125th anniversary this year and has been present in Hungary for more than 35 years, also announced it is moving to what it calls an agile corporate structure to provide Hungarian patients and healthcare professionals with more effective medical and diagnostic solutions.

A change of headquarters accompanies the transition: the company, which currently employs nearly 200 people in Hungary, is moving from Budaörs to the Budapest One building developed by Futureal, where it will set up a new activity-based office on 1,800 sqm with an interior design concept by Jones Lang LaSalle and design by LAB5.

“The healthcare industry is changing globally, with data-driven digital solutions and complex, mutually supportive services gaining ground, as the COVID-19 epidemic has reinforced,” said Bondi.

“At Roche, we are working on the innovations of the future and providing agile responses to the challenges of today, and we will continue to work in a model that supports our teams to collaborate more effectively than ever before.

STA R T U P SPOTLIGHT

Hungary’s largest private parking operator, leading to synergies that can accelerate our growth much further.

BBJ: Are there concrete plans regarding expansion? Where can one currently use the system apart from Westend?

AD: Rollet is available in more than 20 parking facilities in Budapest and Debrecen, and you might encounter it at office or industrial locations as well. However, it’s so seamless you are more likely to miss it. Westend has been a great partner in rolling out seamless parking, and we plan to continue the efforts to bring smart parking to more high-traffic locations to reduce congestion and wasted time.

BBJ: What do you consider the most crucial milestone in the company’s history to date?

AD: We were very excited to win over our first big customers like Debrecen’s municipal parking company or Audi and learned enormous amounts from these early experiences. Rollet won Property Forum Vienna’s “Most Promising Startup” award at the end of 2019.

Since then, our product has grown tremendously. Significantly, Rollet was recently acquired by Star Park Group,

Our goal is for Roche to create even more added value for society as a systemic partner in Hungarian healthcare.”

Budapest One has been designed to BREEAM and WELL Platinum standards. There are no dedicated workstations in the new office, employees can book the space that best suits their work for the day through an app: small and large meeting rooms, desks, and collaboration areas, but also have the option to retreat if the task requires it.

HBLF Names Managing Director The Hungarian Business Leaders Forum (HBLF) has announced the appointment of Krisztina Bélai as managing director, effective from October.

After five years of working in strategic communications consulting in Germany, she returned to Hungary to take up her position at HBLF. As secretary-general of the Direct and Interactive Marketing Association and the Association of Hungarian Confectionery Manufacturers, she gained experience in the management of a non-profit organization, including professional advocacy, PR, and communication.

Before that, she was responsible for building the non-profit brand

of SOS Children’s Villages Hungary as chief communications officer and fundraising manager.

Krisztina Bélai “I am delighted to join HBLF because its values in the field of social responsibility are absolute trendsetters, whether it is the X-Mentor program, which won this year’s Mentor Oscar, the Diversity Charter, or the Romaster Program," she said.

"As the managing director of HBLF, I can see my main task as expanding membership and continuing our highquality professional programs such as the CEO Forum, the Women Leaders Forum, and the HR Workshop. Next year, HBLF will celebrate its 30th anniversary, and we would like to organize a special exclusive celebration event,” Bélai added.

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Photo by metamorworks / Shutterstock.com

Special Report Telecoms

Telcos Scurry to Modernize on Rising Demand

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Sustainability and Equality: How can a Telco Contribute?

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Striving to be the Data Leader on the Market

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4iG’s Growth and Acquisitions Sees it Heading for the Stars

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Internet Service Providers

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Telecommunications Equipment Manufacturers

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How are Hungary’s telcos (who did well during lockdown) navigating the reopening of the markets and rising to the challenges and opportunities presented by new technologies and changing customer needs?

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Special Report

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Budapest Business Journal | November 5 – November 18, 2021

Telcos Scurry to Modernize on Rising Demand With the increasing push towards a more hybrid approach to working and education, the COVID-changed world has boosted the demand for telecommunications services providers.

The three leading telcos in Hungary (Magyar Telekom’s T-Mobile, Telenor, and Vodafone) have ridden the digital wave and spent the past two years expanding services and developing their infrastructure.

CHRISTIAN KESZTHELYI

a new transport, core, and multi-band radio units. This is a multi-year process, but it will lead to higher performance both on legacy technologies (like 4G/ LTE) and give us the ability to deliver 5G capabilities to our customers. We are excited to bring this capability to our consumer and business customers,” Dávid explains.

Business Development

Development in the 5G and IoT arena lays the groundwork for the third market driver: new business development opportunities, such as smart cities, industry 4.0, digital infrastructure, and autonomous vehicles.

How does Hungary compare to its Visegrád Four peers (the Czech Republic, Poland, and Slovakia)? While the underlying customer needs for staying connected are on the same level in the

V4,

Zoltán Dávid, chief strategy, and digital officer at Telenor Hungary The pandemic has upended the market for telecommunications services providers positively; demand for their services has shot through the roof.

“Telenor’s performance has been strong in the last years, and we have been quite resilient during the COVID pandemic.

We are fortunate to be in an industry where there is a growing general demand for data, and our role became even more critical during the COVID waves. We played a key role ensuring our customers could keep connected digitally, to enable homeschooling and home office operations,” Telenor’s Dávid tells the BBJ. This increasing demand has elevated hunger for mobile data, which is considered the second most important driver of the market today. The trend has been ongoing since the shift from

In the second half of 2021, three main drivers are shaping the Hungarian telecommunications market: Digitalization, mobile data growth, and emerging opportunities relating to fifthgeneration technology and the internet of things.

“In terms of digitization, we have seen a step-change in the number of customers that interact with us via digital channels (web and applications). to 4G with a similar, albeit amplified, This is the case for our own services as expansion during the switch to 5G. well as for other service providers in Hungary,” Zoltán Dávid, chief strategy, Infrastructure Investment and digital officer at Telenor Hungary, “As such, we have invested in both 5G tells the Budapest Business Journal. spectrum bands and also in modernizing The emphasis on digitalization is our networks, with our infrastructure ubiquitous. Magyar Telekom said in service provider partner CETIN, to a recent press release that, since the provide the highest quality and fastest epidemic eased in the second quarter, it data rates to our customers,” Telenor’s could work under improved conditions Dávid says. on its goal, which is “Hungary’s The three main telcos in Hungary digitalization.” Vodafone Hungary hold spectrums for operating 5G committed itself to supporting students services under the 15-year-long learning from home and society working licenses (in the 700, 2100, and 3600 from home since the outbreak of the pandemic via new services and discounts Mhz bands) they acquired during the 5G auction held on March 26, 2020. under the aegis of digitalization, it said.

3G

The fourth-biggest player in the market, Digi Hungary, also applied for spectrums at the auction, but the National Media and Infocommunications Authority (NMHH) did not register it following a formal investigation. Digi appealed against the decision. On February 4, 2021, the Curia, the highest judicial authority in Hungary, upheld the NMHH’s decision to exclude the service provider.

Hungarian telcos with the 5G spectrum are busy modernizing their infrastructure; this next-generation connectivity means a significant technological advancement is on the cards. During the summer, Magyar Telekom emphasized the quality of its mobile networks around Lake Balaton and holiday resorts in general. The telco says this modernization enabled it to “successfully cater for” increased data traffic generated by

4G

customers in these locations during the summer, in addition to areas where MTel’s 5G is already present.

Vodafone Hungary also focused on expanding its 5G network over the summer in summer resort areas.

A recent press release expressed a commitment to continue with its 5G development across the country in the second half of the year.

Like its peers, Telenor is also actively modernizing. “We are also focusing on modernizing our network in collaboration with CETIN, which entails

the level of infrastructure development and the position of market participants are dissimilar.

“In mobile, we see similarities in terms of network development, mobile penetrations, data usage, and revenue per customer in Hungary, Slovakia, and the Czech Republic.

However, there is a bigger contrast in the fixed infrastructure domains as Hungary has significantly higher nextgeneration fixed broadband and pay-TV penetration compared to the Czech Republic,” Dávid says.

“In terms of digitization, we have seen a step-change in the number of customers that interact with us via digital channels (web and applications). This is the case for our own services as well as for other service providers in Hungary.”

In a wider context, Hungary, like much of Central and Eastern Europe, is on a similar trajectory as the rest of the European Union in terms of digitalization, data usage, and network upgrades.

“There are some differences as markets such as the Nordics have much higher data consumptions than in the CEE; however, when we look at our service capabilities, we are on par with the best networks in Europe,” Dávid adds.

While the post-pandemic world is increasingly widely discussed, businesses must remain alert, especially with the fourth wave looming, if not already here, as well as low vaccination rates in many countries around the world.

Nevertheless, there are lessons to be learned, such as remaining flexible and keeping customers safe and happy.

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Sustainability and Equality: How can a Telco Contribute?

BBJ: How does Vodafone Foundation emphasize environmental awareness?

AO: A category of Vodafone Foundation’s Vodafone Digital Award is “Planet and Sustainability,” in which we award digital solutions that help save our planet and encourage as much of society as possible to participate in environmental protection. Formerly, we have awarded several solutions, including an automatic underwater robot, a digital cotton bollworm trap system, and an ecological footprint application, just to mention a few.

Sustainability and gender equality are among the most pressing issues of the 21st century.

To make progress in these areas, economic actors, including large companies, must take a lead. In recent years, Vodafone Hungary has initiated many measures to reduce its carbon footprint, while gender equality has long been a strategic goal. The Budapest Business Journal spoke with Anita Orbán, Vodafone Hungary’s external affairs director, about the company’s future plans.

BBJ: Vodafone Hungary is one of the founders of Women in Technology Hungary. What should we know about the association?

AO: WiTH is a knowledge-sharing and networking community that creates a dialogue among organization members and brings together women in technology. The association was launched to highlight the achievements and successes of women in the sector, providing inspiration to youngsters. We believe the future is about equality and openness, so we must do everything we can within our field. I am also happy to announce that, from October, anyone, male or female, can join the association.

ROBIN MARSHALL

BBJ: The latest example of Vodafone’s environmental commitment was the addition of more than 100 hybrid autos.

What percentage of the corporate fleet operates on fossil fuels, and when will they be replaced? When will the fleet become solely electric?

Anita Orbán: Beyond the group-level environmental objectives, we also take local commitments seriously. From 2025, the company’s entire fleet of cars, more than 400 vehicles, will be purely electric. For starters, 106 Škoda Octavia IV plug-in hybrid cars were acquired in September. Although less than a month has passed since then, the results speak for themselves. The first month resulted in 93 kg CO2 savings; our colleagues filled their cars more than 400 times and traveled 12,423 km “electrically.”

Sixty more environmentally conscious vehicles, including plug-in hybrids and pure electric autos, will become part of our fleet by 2022.

BBJ: Last October, Vodafone Hungary said it became the first company in the country to run on 100% renewable energy. (Since June this year, all Vodafone subsidiaries in all European countries have done so.) Can you tell us about this?

Special Report | 15

Anita Orbán AO: Our parent company announced last summer that it would operate its European network on renewable energy by July 2021 at the latest, creating a green network that can continue to grow sustainably.

Vodafone Hungary was the first to complete this commitment. We are proud that our customers have been using wind- and water-based services since October 2020. This was of crucial importance, as it was a massive step towards Vodafone Group’s 2030 commitment to reduce its carbon footprint to net zero and extend it to its entire supplier and partner network by 2040. We are also very proud that Vodafone is one of more than 500 companies whose objectives in reducing greenhouse gas emissions have been validated by the Science-Based Targets initiative.

BBJ: You have altered the design of your SIM cards. Why was this, and how has it been received?

AO: We have always considered it very important to include our clients in our sustainability efforts. Besides customers using our renewable energy network, we have also tried to find green solutions for SIM cards.

In 2020, we halved the size of the SIM card holders saving nearly two tonnes of plastic annually. After that, in August 2021, we made a plasticfree eSIM available to our customers.

Furthermore, we have announced in recent weeks that, for non-eSIM compatible devices, we will provide a 100% recycled plastic ecoSIM for our customers.

BBJ: What is the next step at Vodafone Hungary regarding environmental protection?

AO: Above the aforementioned grouplevel sustainability goals, the next milestone at Vodafone Hungary will be our relocation to the Budapest ONE office park, where sustainability has been core to its construction. The office park meets the requirements of the WELL Building and BREEM Ecodesign building qualification systems. In addition, the new office building will be equipped with a power-saving, intelligent central building management system, and the garage will have electric car chargers.

All of this is perfectly in line with Vodafone’s sustainability goals.

We are expected to move to the new building from October 2022.

“Our parent company announced last summer that it would operate its European network on renewable energy by July 2021 at the latest, creating a green network that can continue to grow sustainably. Vodafone Hungary was the first to complete this commitment.

We are proud that our customers have been using wind- and water-based services since October 2020.”

BBJ: What is Vodafone doing to make the sector more appealing to women?

How do you promote the STEM area for girls and women?

AO: WiTH ties in with Vodafone’s global goal to become the best workplace for women by 2025; hence, we are working to fill at least 40% of management positions in the company with women by 2030. The objective set out to 2025 is also supported by the #CodeLikeaGirl workshop for girls interested in computer technology, a global policy on maternity leave, the ReConnect program helping to reintegrate women returning to the labor market after a long absence, and Vodafone’s company guidelines on domestic violence.

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Striving to be the Data Leader on the Market BBJ: I understand several eco measures are at play at Telenor as well.

MES: Indeed, we are very much dedicated to the cause of environmentalism. For one, using split SIM cards help us cut plastic consumption. Thanks to our effort to go paperless, some 80% of our B2B customers already sign electronically, and we are also thinking about relying on renewable energy in the future.

Thanks to its customer experience-oriented strategy, Telenor Hungary says its annual revenue from mobile services is showing very healthy growth. As Mohamed ElSayad, chief commercial officer at the telco tells the Budapest Business Journal, the hunger for data will grow with the number of connected devices increasing.

Telenor aims to serve related customer demand by being the data leader on the market.

BBJ: How high up the customers’ agenda is handset insurance?

MES: The number of hours Hungarians spend using their phone has constantly been going up, which increases the probability that something unpleasant could happen to your handset. With devices getting more expensive, people love that they can be insured against damage. In parallel, we are getting into offering insurance for other devices too, and our plans include the introduction of travel insurance, or, basically, any additional insurance that can be activated easily on the go.

LEVENTE HÖRÖMPÖLI-TÓTH

BBJ: How has the telco landscape changed in the past year? Your neckto-neck race to the second-biggest operator in Hungary tells a tale of fierce competition.

Mohamed ElSayad: We are like big football clubs; there is a constant rivalry between us, which is totally normal. We’ve been hiring the best talent in the past three years since the takeover by PPF Group, and regarding annual revenue from mobile services, we’ve had very healthy growth. We aim to stay on this growth track while offering the best customer experience we can. We are planning to use our recently extended operator license to enhance the latter further. Part of this effort is home internet services, and this is where we are stepping out of the role of being a mobile-only operator to become an integrated operator in the long term.

BBJ: Why is there a demand for your home internet in the first place?

Broadband is traditionally strong in Hungary; infrastructure is the factor Hungary can pride herself on when it comes to digitalization.

MES: Indeed, the infrastructure is world-class; yet, there are still areas in the country that are not that wellconnected. People also tend to leave their provider for emotional reasons.

Mohamed ElSayad Ultimately, it’s about being able to supply customer demand wherever you are, whether at home, in the office, or on the go. What matters is the stability and speed of the connection. The quest for integrated operations is a global trend where more people want to be served by just one single operator, and that’s where we are headed.

BBJ: Being connected became even more crucial during the pandemic.

How did you respond to the situation?

MES: For starters, we gave customers 100 Gigabytes of data for free. Demand for data was soaring, and we wanted everybody to know that we were there for them no matter what. We also made available a more reliable internet connection with bigger data packages. Contactless services were in high demand; therefore, we focused on them more strongly than before.

For one, we were the first to introduce mobile account-based ticket and pass purchases for public transportation in Hungary. The need for contactless is here to stay, so we are constantly working on these types of services.

BBJ: There are some three million dogs in Hungary, and in Budapest, every fourth adult has one. Is that why it was important to appeal to dog owners by making stores dog-friendly?

MES: Being a dog owner myself, I can confirm that it’s a massive relief if you don’t have to leave your dog outside when running your errands. In Hungary, more and more people have pets. Telenor introduced dog days in the office a few years ago, and it has been very popular with employees.

Customers love our dog-friendly approach too. And the dog trackers we’ve been giving out to help monitor the different records of pets are a hit.

BBJ: This animal-friendly approach must come in handy at your community store at Astoria, too, I imagine.

MES: Our flagship store had some unused space we wanted to share with the public. Now you can go to work and hang out there; the internet is provided. Co-working is picking up anyway, and everybody clearly appreciates what this location has to offer.

“Telenor is known for providing generous data packages as we want to be the data leader on the market. Being connected has actually become a human right by now, and we are delighted to help you exercise it. Dubai, where I used to work, set the goal to become the happiest country in the world through technology as it makes you more efficient, thus also more pleased.”

BBJ: Smartphone-based internet traffic went from 62 million Gigabytes in Q4 2019 to 87 million GB in one year, a trend that is set to continue. How are you preparing to serve this evergrowing mobile data hunger?

MES: Screens are getting bigger, people don’t mind spending more time glued to them, and the number of connected devices is also soaring, so there is a good reason for the 30% increase you mentioned. Telenor is known for providing generous data packages as we want to be the data leader on the market. Being connected has actually become a human right by now, and we are delighted to help you exercise it. Dubai, where I used to work, set the goal to become the happiest country in the world through technology as it makes you more efficient, thus also more pleased. Tech should, therefore, serve a bigger purpose for humanity.

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Budapest Business Journal | November 5 – November 18, 2021

ITM Signs MoU With Huawei Hungary Hungary’s Ministry for Innovation and Technology and Huawei Technologies Hungary signed a memorandum of understanding on long-term cooperation in Budapest on October 26, according to novekedes. hu (Growth). Minister for Innovation and Technology László Palkovics and Huawei Technologies Hungary CEO Colin Cai signed the MoU at a conference organized by the company. The framework extends to digital education, the development of 5G and fixed-line networks, and smart city solutions. Huawei Technologies said the document establishes Huawei’s continued close cooperation with local educational institutions and the development of digital instruction through innovation and knowledge transfer.

The company will support higher education in Hungary with the testing and implementation of intelligent campus solutions. It will continue to upgrade Wi-Fi systems and broadband networks at schools and offer cooperative and virtual desktop solutions to boost the efficiency of remote learning.

Driverless Forklift in Operation at BorgWarner Magyar Telekom’s private mobile data network and the industrial solution T-Systems developed for it are being tested under actual production conditions at the site of BorgWarner Oroszlány Kft., writes business daily Világgazdaság (Global Economy). An automatic, driverless forklift, which will promote more efficient material handling, has been put into operation at the turbocharger plant. Additionally, a private mobile data network based on the factory’s individual needs is being tested in other internal logistics and production control areas. It is currently running on 4G / LTE technology but is ready to move to a 5G network in the future.

eSIM Available for Vodafone Customers Having already cut down on the size of its SIM cardholders to reduce plastic use, Vodafone now makes more environmentally friendly eSIMs, without plastic cards, available to its customers, media1.hu reports. An eSIM is built into the device. The service is available free of charge to Vodafone’s new and existing customers with physical SIMs and is available for any

residential voice and mobile data-based subscription. Telekom was the first in Hungary to introduce an eSIM, and demand for it has been growing steadily since June 2018. Telenor is also scheduled to bring in eSIMs this year.

Telenor Offering Managed Firewall, Optical Internet Mobile telco Telenor Hungary has been offering a managed firewall and optical internet service to businesses since October. The telco said close to 40% of its turnover comes from corporate subscribers, and the expansion into the new markets is expected to boost its share in the segment. The firm is using the optical network of Magyar Telekom to provide internet service in a wholesale construction.

Telenor Hungary had net revenue of HUF 192 bln last year, up 5%.

Hungary’s 1st Industrial 5G Private Network Goes Live After a six-month test period at Foxconn’s Komárom factory, Hungary’s first industrial 5G private network went live in June. The construction of the 5G infrastructure was implemented with the help of Ericsson and Vodafone Hungary.

Within the framework of a partnership agreement concluded in the summer of 2019, Ericsson provided the network tools for development, while the 5G connection for communication between the devices was established on the Vodafone Hungary network.

The parties say that they are committed to working together to boost the industrial development of 5G in Hungary. The main benefits of the private network are information security, network capacity to meet industrial needs and customizability.

Spacecom Extends Agreement With MTel Israeli satellite company Spacecom, an acquisition target for listed Hungarian IT company 4iG (for more on this, turn to page 18), signed an extension agreement with Magyar Telekom’s direct-to-home service worth USD 8.6 million, business daily Világgazdaság (Global Economy) reported earlier this summer. The new contract for service on Spacecom’s AMOS-3 satellite runs until the end of 2024. Magyar Telekom’s T-Home DTH platform broadcasts more than 160 channels throughout Hungary, including more than 30 in HD via the AMOS fleet.

INSIDE VIEW

The Notorious 5G: Opportunities and Legal Challenges Dóra Petrányi

Eszter Csapó

Partner and CEE Managing Director; Head of the Technology, Media, Telecommunications (TMT) practice

Senior counsel, TMT practice

CMS BUDAPEST

CMS BUDAPEST

5G is one of the hottest topics in the tech industry, with high expectations and a wide range of concerns from conspiracy theories to legitimate worries.

Since 5G deployment is currently underway, let’s focus on some key benefits of the technology, along with a few potential legal and socio-economic issues.

The fifth generation of mobile networking technology is expected to be one of the fastest wireless technologies yet created. In fact, through its significantly improved performance characteristics, 5G is the first mobile technology truly able to extend the reach of broadband wireless services.

Compared to 4G, 5G offers higher speed (more bits-per-second able to travel the network), lower latency (the time taken for device-tonetwork communications), less power consumption (it can rapidly switch to low-energy use when cellular radios are not in use) and better use of bandwidth (due to the greater number of devices that can be connected to the network).

Such performance upgrades will speed up the evolution of new technologies and the development of existing ones, including the Internet of Things through which devices could transmit data over the internet. This technological advancement will most probably revolutionize the way we live and work but also implies various legal challenges and consequences, some of which will have to be addressed soon.

Despite the potential benefits, there is a genuine concern that the high levels of investment needed to deploy 5G would deter operators from investing in 5G networks outside of densely populated urban areas. As a result, rural and even suburban areas are less likely to enjoy the benefits of 5G, potentially widening the digital divide.

Another significant advantage of 5G is network slicing (meaning that the same physical infrastructure can host several networks) which also brings some legal concerns. As the result of network slicing, an internet service provider could provide various services with different performance characteristics (e. g., download speed, latency, or download usage limits) on

the same physical network to meet a particular need. That could lead to the infringement of the current principle of net neutrality, the concept of an open, equal internet for everyone, regardless of device, application, or platform used and content consumed.

The implementation of the 5G technology could pose other problems related to data protection and cybersecurity. The increase in the number of participants (manufacturers, developers, network operators, and service providers), thus increasing the complexity of the service chain in respect of services optimized for 5G, could: (i) make it necessary to distribute the liability of these participants transparently so that the final recipients of the service can clearly identify against whom they should assert their potential claims; (ii) make it necessary to provide the users with additional means of control over their processed and stored data; (iii) make the information of the data subjects (especially regarding the person of the data processor, the purpose of the processing of data, and the exercise of the rights of the data subject) an even more essential issue.

In addition, due to the significantly greater bandwidth of the 5G network and consequently the greater number of devices (and users) connected to the network, it might become easier for hackers to find ways to exploit vulnerabilities.

There is also a concern that, with increased connectivity and speed, it will be easier for cybercriminals to gain access to data and systems.

Therefore, particular attention should be paid to applying suitable security measures within 5G networks to ensure the integrity of the network and the safety of the users’ data.

To summarize, the development of 5G networks enables various sectors to improve and broaden their performance in new directions. However, this process also entails legal challenges that need to be addressed to prevent the risks associated with the latest technology from overshadowing the benefits of 5G.

cms.law

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

News///in brief Telecom

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Growth and Acquisitions of 4iG see it Heading for the Stars 4iG, a significant actor in the domestic IT market in the past two decades, is set to become one of the key players in the Hungarian and regional telecommunications market. The company has added several domestic and regional assets to its portfolio in the past few months. By acquiring a majority stake in Israeli firm SpaceCom, you might say it is aiming for the stars.

The most recent example for the company’s regional expansion efforts is the acquisition of mobile network operator Telenor Montenegro, part of the Czech PPF Group, which had acquired Telenor’s assets in the region, including Telenor Hungary, three years ago.

At the end of October, 4iG announced that the due diligence process of the Montenegro outlet was coming to an end, and PPF had agreed to sell its

100% stake

in Telenor Montenegro to 4iG for an undisclosed price.

The transaction, which is subject to statutory regulatory clearances, is expected to be completed before the end of 2021.

Stable Growth

“Telenor Montenegro is a mobile operator with a stable growth background, the acquisition of which is an important step to the implementation of our strategy in the Western Balkans. The acquisition may open up additional opportunities for us in the region in the telecommunications and ICT markets,” Jászai commented on the transaction.

György Regyep and ICT solutions,” said Gerald Grace, the CEO of Invitech.

A further step to expand its reach in the telecommunication business is the planned acquisition of the majority stake in Israel’s Spacecom, a satellite operator and service provider with global coverage.

In mid-October, 4iG announced that Hungaro DigiTel Kft., a joint subsidiary of 4iG PLC (75%) and Antenna Hungária Zrt. (25%), had entered into a final agreement with Space-Communication Ltd. to acquire a

51% stake

in the company. Spacecom operates four geosynchronous satellites, which provide services in Hungary and the Central and Eastern European region via the AMOS 3 satellite.

The successful completion of the transaction is subject to approval from the General Assembly of Spacecom and the Israeli Ministry of Communications.

ZSÓFIA VÉGH

Founded by a group of IT specialists in the 1990s, the company has since become a significant service provider and, through mergers and acquisitions, it is also aiming to become a major player in telecommunications.

In August, the company signed a partnership with Antenna Hungária Zrt., the state-owned television and radio broadcast and telecommunication company. The agreement aims to create a super holding strong enough to compete with multinational players even at a regional level.

“The acquisition of the majority stake in Antenna Hungária and the combination of the two companies’ telecommunications portfolios, expertise, and know-how will contribute to the technological development of the Hungarian telecommunications sector and the provision of competitive and highquality services in the business and retail segments,” Gellért Jászai, president and CEO of 4iG, said when announcing the cooperation.

Exchanges. If it goes ahead, 4iG will acquire a 100% stake in the group.

Meanwhile, the company is also gaining more ground in IT services. In spring, 4iG acquired majority ownership in SpaceNET and became a key partner of Cisco in Hungary in data center and online networking solutions.

In June, it closed the acquisition of Poli Computer PC Ltd. The transaction made it the market leader in outsourced and managed IT services in Hungary, the company writes in a statement.

Most recently, 4iG and Telenor Hungary announced a new firewall service offered to Telenor’s business customers and provided by 4iG. “The number of blackmailing viruses and malware attacks has tripled recently, and it is Europe where they have been more prominent,” György Regyep, cybersecurity head of 4iG, said at the announcement.

Digi Next?

Gellért Jászai A month earlier, at the end of September, the company completed the acquisition of Invitech, one of Hungary’s leading telecommunications and infrastructure service companies. More than 600 employees, 5,000 customers, and the country’s second-largest (11,000 km) optical backbone network changed hands with the transaction.

“4iG and Invitech have very complementary product sets.

Cooperation between the companies will create significant cross-selling opportunities where we can provide our respective customers with even more comprehensive telecommunication

In spring, 4iG announced the potential acquisition of Digi Group’s Hungarian operations. The company entered into a preliminary, non-binding agreement in March with the Romanian RCS & RDS consortium on the purchase of Digi Távközlési Szolgáltató Ltd. and its subsidiaries, Invitel Ltd. and I TV Ltd. Digi Group has

23 years

of experience and a broad service portfolio covering cable TV, fixed internet and data, mobile telecommunication services, fixedline telephony, and direct-to-home (DTH) services. The proposed transaction has been announced on the Budapest and Bucharest Stock

Gerald Grace The company has been running a poll among its corporate customers, and the results show that most are unprotected against such attacks, he added. The joint service between 4iG and Telenor will also provide secure VPN, artificial intelligence, in-depth virus detection, and data leakage protection, 4iG says.

4iG Plc. describes itself as one of the leading companies in the Hungarian IT and ICT market and the country’s knowledgebased digital economy. It has been involved with innovative technologies for more than 25 years, gradually expanding its services, staff, and portfolio in response to the changing needs of the ICT market. The company has significant interests in IT, telecommunications, and infrastructure development. It aims to establish dominant market positions in Hungary and the Central and Eastern European and South-Eastern European regions in a broad spectrum of ICT services.

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Budapest Business Journal | November 5 – November 18, 2021

Special Report | 19

Internet Service Providers

1991 6,982

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tibor Rékasi Daria Dodonova Melinda Szabó

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–

1996 10

CubeComp Zrt. (62.56), Officelink Kft. (20), individuals (17.44) –

zsombor attila Papp Rezső Dunay Csaba Csizmadia

7624 Pécs, Budai Nagy Antal utca 1.

(80) 811-118 info@dravanet.hu

A = would not disclose,

NR = not ranked, NA = not appliacable

415

5,348

✓

✓

✓

✓

✓

–

1999 A

1995 A

2012 A

This list was compiled from responses to questionnaires received by November 3, 2021, and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time.

The list is based on companies’ voluntary data submissions. 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

20 | 3

Special Report

www.bbj.hu

Budapest Business Journal | November 5 – November 18, 2021

Telecommunications Equipment Manufacturers Ranked by total net revenue in 2020

moHanet 10 mobilsystems zRt. www.mohanet.hu

11

panasoniC maRketing euRope gmbH soutH-east euRope Fióktelep www.panasonic.com/hu

CtC/CRm solution

message Handling system

industRy speCiFiC solution

✓

–

–

–

–

✓

✓

–

✓

–

–

–

–

✓

A

A

–

–

–

–

–

A

A

–

–

–

–

–

A

A

–

–

–

–

–

–

A

–

–

–

–

–

–

A

–

–

–

–

–

A

A

–

–

–

–

–

A

A

✓

✓

–

–

–

A

A

✓

✓

✓

–

–

A

A

–

–

–

–

–

A

A

–

–

–

–

–

A

A

–

–

–

–

–

A

A

–

–

–

✓

–

A

A

✓

✓

yeaR establisHed no. oF Full-time employees on July 1, 2021

9

CisCo systems magyaRoRszág kFt. www.cisco.hu

2,558

✓

otHeR teleCom and netWoRk equipment

8

avaya magyaRoRszág kFt. www.avaya.com

4,937

voip

7

neC easteRn euRope kFt. www.hu.nec.com

38,470

vsat system

6

nokia solutions and netWoRks kFt. www.nokia.com

50,105

Call/ContaCt CenteR

5

eRiCsson magyaRoRszág kommunikáCiós RendszeRek kFt. www.ericsson.com/hu

64,822

business pHone systems/pbx

4

HuaWei teCHnologies HungaRy kFt. www.huawei.hu

143,793

Fax maCHines

3

lg eleCtRoniCs magyaR kFt. www.lg.com

525,160

ansWeRing maCHines

2

Cloud netWoRk teCHnology kFt. www.foxconn.hu

998,004

isdn pHones

samsung eleCtRoniCs magyaR zRt. www.samsung.com

analog pHones

1

total net Revenue in 2020 (HuF mln)

tRi-band mobile pHones

Company Website

dual band mobile pHones (900/1800 Hz)

Rank

types oF equipment

oWneRsHip (%) HungaRian nonHungaRian

–

1989 1,522

(100) –

Hyang Hee kim Sang-Woo Lim, Witsch Gerda –

5126 Jászfényszaru, Samsung tér 1.

(80) 726-7864 –

–

2017 573

– Focus PC Enterprises Ltd. (100)

dr. péter tálos Gabriella Pistauer –

2900 Komárom, Bánki Donát utca 1.

(34) 886-888 komarom@ emea.foxconn.com

–

1992 107

– LG Electronics European Holding B.V. (100)

kim dae Hwan, kim Hyeong tae – –

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

–

2005 198

– Huawei Technologies Cooperatief U.A. (100)

Cai lingyu – –

1138 Budapest, Népfürdő utca 22.

(80) 482-934 –

1990 2,053

– Telefonaktiebolaget LM Ericsson (100)

gábor Éry, edina Rózsa, bernadette mária bohács – –

1117 Budapest, Magyar Tudósok körútja 11.

(1) 437-7100 meghivo@ ericsson.com

–

2006 2,225

– Nokia Solutions and Networks Oy (100)

balázs kökény, erzsébet tóth, béla zagyva – –

1083 Budapest, Bókay János utca 36–42.

(20) 977-7797 nokia.hungary@ nokia.com

–

2002 25

– NEC Europe Ltd. (100)

lászló magyar, edit Cserháti Hontiné – –

1142 Budapest, Ungvár utca 64–66.

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

1990 88

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

györgy gombár, andrás turai – –

1062 Budapest, Váci út 1–3.

(1) 238-8200 SALES-HUNGARY@ avaya.com

ottó zoltán dalos – –

1123 Budapest, Csörsz utca 45.

(1) 225-4600 –

–

–

–

1997 87

– Cisco Systems Inc. (A), Cisco Systems Management B.V. (A)

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone email

2,360

–

✓

–

–

✓

✓

✓

✓

–

✓

✓

✓

✓

Desktop UC system for messaging and telephone functions, video conferencing and telepresence systems

292

✓

✓

–

✓

–

–

✓

✓

–

–

✓

✓

✓

–

2009 19

Zoltán Havasi (100) –

zoltán Havasi Norbert Szabó –

1152 Budapest, Telek utca 7–9.

(1) 271-1141 info@mohanet.com

A

A

A

A

A

A

A

A

A

A

A

A

A

A

–

2010 26

– Junichi Suzuki (100)

david leslie preece – –

1117 Budapest, Alíz utca 4.

(1) 382-6060 –

4

www.bbj.hu

Budapest Business Journal | November 5 – November 18, 2021

Socialite Mihály Csíkszentmihályi: The Father of Flow Hungarian psychologist Mihály Csíkszentmihályi, who died recently, developed a theory he called “flow” that has profoundly impacted the way we think about work and life.

DAVID HOLZER

Flow has entered pop culture as the concept of being “in the zone.” If you’re of a certain age, you may know it as being “in the groove.”

Csíkszentmihályi described flow to cutting edge tech-mag Wired as “being completely involved in an activity for its own sake. The ego falls away. Time flies.

Every action, movement, and thought follows inevitably from the previous one, like playing jazz. Your whole being is involved, and you’re using your skills to the utmost.”

He was born in Rijeka, Croatia, in 1934 to a career diplomat at the Hungarian consulate. The family name Csíkszentmihályi derives from the village of the same name in Transylvania.

Immediately after World War II, his father was appointed Hungarian Ambassador to Italy. Csíkszentmihályi senior resigned in 1949 rather than work for the communists.

In retaliation, the family was stripped of its Hungarian citizenship.

No doubt the experience of communism influenced Csíkszentmihályi’s observation that “When people restrain themselves out of fear, their lives are by necessity diminished.”

Csíkszentmihályi’s father opened a restaurant in Rome, and his son dropped out of school to work there and help earn money.

In a 2004 TED Talk, “The Secret to Happiness,” Csíkszentmihályi explained that his experience of WWII and the realization that “few of the grown-ups I knew were able to withstand the tragedies that the war visited on them” led him to become interested in “understanding what contributed to a life that was worth living.”

According to Finnish IT development company Valamis, gamification uses game mechanics, elements, and principles applied to non-game contexts to engage users better. Businesses often use gaming in areas such as employee training, recruitment, evaluation, and organizational productivity.

Dr. Zoltán Buzády, associate professor of management and leadership at Budapest’s Corvinus University with connections to the London School of Economics and Political Science and the University of London, is making good use of Csíkszentmihályi’s work.

Buzády describes himself as a “global expert in Flow and leadership development Hungarian-American Széchenyi Prize winner and Prima via serious games” who champions Primissima Prize-winning psychologist Mihály Csíkszentmihályi, the idea that flow promotes leadership. who died on October 20, aged 87. He was an external member of Working with Csíkszentmihályi, he the Hungarian Academy of Sciences. Photo by Nándor Veres / MTI. developed a leadership simulation game where players “assume the role of the new manager of a family-owned For Csíkszentmihályi, intrinsic winery in California, where morale Philosophy and art didn’t offer any motivation is all about being goalis low, productivity stagnates, and answers; psychology did. As a young directed and enjoying challenges, your management team remembers man, Csíkszentmihályi attended a which leads to happiness. When we only [….] a distant memory of ever lecture in Zurich by Carl Jung in focus on intrinsic motivation, we’re having been in Flow.” which the pioneering psychologist and able to develop work orientation. This psychiatrist explained his theory that Europeans were projecting flying saucers he described as a combination of “achievement, endurance, cognitive into the sky because their psyche had “[Flow is] being completely structure, order, play, and low been traumatized by WWII. involved in an activity for its impulsivity.”

It seemed to Csíkszentmihályi that You can see why the concept of psychology might have the answer to own sake. The ego falls away. flow appeals to the business world. his desire to find what constituted a life Time flies. Every action, Csíkszentmihályi suggested that “after worth living. a certain point […] increases in material movement, and thought Emigration well-being don’t seem to affect how follows inevitably from the In 1956, Csíkszentmihályi emigrated to happy people are.” the United States. Here he worked nights Cultivating autotelic, intrinsically previous one, like playing while studying at the University of motivated behavior at work can, in Chicago. He received his bachelor of arts theory, make real-world realities such as jazz. Your whole being is and doctorate from that university and remuneration or working conditions fade involved, and you’re using became a professor there in 1969. into the background somewhat. your skills to the utmost.”

From then on, Csíkszentmihályi Feel the Joy focused on finding the secret of In the 2004 TED Talk, Csíkszentmihályi happiness, and he found it in flow. references Masaru Ibuka of Sony. Ibuka’s The notion, or reality of flow, is that The game enables managers to learn idea was to “establish a place of work we’re happiest when in this state. We about “flow-promoting leadership” while where engineers can feel the joy of are fully immersed in what we’re doing, their bosses audit their management technological innovation, be aware of whether writing, running a marathon or skills. Buzády and Csíkszentmihályi playing a game, and nothing else matters. their mission to society and work to argue that skills are at the core of their heart’s content. I couldn’t improve Csíkszentmihályi defined flow as any company or corporation’s future on this as a good example of how flow having nine components: the “challengecompetitiveness. enters the workplace.” skill balance, merging of action and Personally, I wish that more schools that Presumably, the title of awareness, clarity of goals, immediate teach creative arts promoted the concept of and unambiguous feedback, concentration Csíkszentmihályi’s book “Good Business” flow. Speaking as someone who abandoned includes a double meaning. Good as on the task at hand, paradox of control, learning music as an adolescent, if I’d in “decent” and good as in “flourishing.” transformation of time, loss of selfknown that mastering an instrument He may also be responsible for the conscious, and autotelic experience.” would enable me to get into a highly nauseatingly ubiquitous use of the word Autolelic means something with pleasurable state, I’d have stuck with it. “passion” in business. no end or purpose beyond its own Today, it does seem to be business existence. We behave autotelically when that most appreciates the value of we do something that’s intrinsically You can watch Csíkszentmihályi’s Csíkszentmihályi’s findings. His rewarding to us rather than because 2004 TED Talk “Flow, the Secret observations have contributed we’re chasing external rewards. This of Happiness” at ted.com. enormously to the gamification of is closely connected to intrinsic aspects of work. motivation and work orientation.

22 | 4

Socialite

www.bbj.hu

Budapest Business Journal | November 5 – November 18, 2021

Southern Wine Region of Szekszárd Continues to Sizzle The southern region of Szekszárd has continued to solidify its reputation as a producer of reliable and affordable, and often superb, red wines. It is putting increasing emphasis on the three-pronged approach of Kadarka, Kékfrankos, and Bikavér, with the first two black grape varieties also being vital components of the blended latter.

ROBERT SMYTH

Within these and beyond, the region’s vintners are constantly innovating, planting new grapes, and adopting alternative ways of winemaking to broaden the region’s palette further.

The black Malbec grape originally hails from southwest France, where it is also known as Côt. It makes the broodingly dark and turbo tannic wine of Cahors but later found worldwide fame in Mendoza, Argentina. It is now also making waves in Szekszárd.

Mészáros’ Grandiózus Malbec 2019 (HUF 4,190 from meszarosborhaz.hu) is perfumed (violets) and plummy, with a

creamy, smooth, round, and full-bodied palate with blueberry and black cherry notes. It’s quite striking how varietally pure it is, yet nothing sticks out, and it’s more balanced than many Mendoza Malbecs that I’ve tried, with the alcohol of 14% and oak nicely integrated. The Mészáros family planted the grape in Szekszárd in 2007 after learning about Malbec on a trip to Argentina but had to wait until 2016 until the grape’s name could be used on the label.

Another lighter-bodied, fruit-forward, yet also pure Malbec comes from Bodri.

The 2020 was aged for five months in Flexcube, an increasingly popular aging vessel that enables the wine to take in oxygen, helping build the developing structure without the oaky influence that

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barrels impart. The wine is excellent value for HUF 1,900 from bodribor.hu.

Flexcubes were also used to good effect in Lajvér’s Kadarka 2020, with some oak staves inserted into the polymer cubes to add just a hint of woody character. The resulting wine is made from grapes from the widespread P9 Kadarka clone. Known for its spiciness and fruitiness, it has a stunningly vibrant pale ruby color, with anise, rosehip, and strawberry aromas and flavors. With a delightful lightness of touch on the light-bodied palate that is nevertheless long and lingering, it is outstanding value at HUF 2,390 from Bortársaság.

Lajvér first made single varietal Kadarka only in 2019 and was also aging some Kadarka in oak when I was shown around the cutting-edge, gravity-fed winery, but that portion is to be used exclusively in the Bikavér blend.

A real novelty at Lajvér is its white Kékfrankos, or a Blancs de Noir, known as Incognito, which is really distinctive and well worth a sip. The 2020 Incognito is so light it’s almost the color of water, with a citrusy yet spicy and floral nose and palate that opens up to reveal a tropical pineapple note; it costs HUF 2,500 from lajverwine.com.

“Kékfrankos is a grape with a thousand faces,” declares winemaker Rebeka Vida.

She works closely with Ildikó Markó (who used to ply her trade at Sauska, down in Villány, and now also takes care of laboratory analysis at Lajvér), and viticulturist Attila Nagy, who manages Lajvér’s 27 hectares of terraced vineyards, and is also trained as a winemaker.

The three taste together constantly and take joint decisions on winemaking considerations, and the results have moved the winery into the top flight. Its flagship wine is Signum, which is, in fact, a Bikavér, although that name only appears on the back label. It is soft and juicy with delightfully refined tannins and costs HUF 3,390 from Bortársaság.

Incidentally, for a white Kadarka, head back to Mészáros, whose 2020 is really lemony and distinctively herbal, with 10 g/l of residual sugar taking the edge off of the acidity. Meanwhile, the Fritz winery has been experiencing so much demand for its white Kadarka that it doesn’t even make a single varietal red Kadarka.

Making white wines from black grapes is practiced in other areas of the world, notably in the Swiss region of Ticino, which is predominantly planted with Merlot. Nevertheless, noting soaring demand for white wine, Szekszárd’s wineries are busy growing white grapes and adding whites to their portfolios.

At the Fritz winery, Decsi Zöld Szagos is a rediscovered ancient grape that has been identified, patented, and replanted in conjunction with the Pécs Research Institute. Tasted from the tank, the 2021 was fruity and floral with a light and fresh palate.

Critics have often dismissed Szekszárd as a source of only simple, uniformly fruity (but not much else) wines due to the loess soils that dominate the region, but the truth is that charming wines, which are often varietally pure, like the aforementioned Malbecs, can come from loess.

“I really like working here as loess helps bring the grape’s varietal character,” says Lajvér’s Vida. Elsewhere loess, which accounts for up to 10% of the planet’s topsoil, is strongly associated with quality wine. Places where loess is loved include Wagram and parts of Wachau and Kremstal in Austria, where it is prized for its ability to make fuller Grüner Veltliner. But it is also a feature in many top German vineyards and in eastern Washington, in the United States. Indeed, some of Tokaj’s most elegant wine comes from loess-dominated vineyards.

Szekszárd is, in any case, about more than loess since other soils and rock types are lurking under and alongside it, with lots of iron-rich red clay and chunks of limestone in the mix (the latter providing acidity to counterbalance the region’s ripeness). The red clay, also known as terra rossa, regularly pokes through the surface as you drive around this region of hills and valleys.

At the Sebestyén winery, the focus is on showing Bikavér from different places of growth, with wines from three vineyards – Porkoláb-völgy, Iván-völgy (völgy meaning valley) and Görögszó – set to be made available simultaneously shortly. Meanwhile, the Heimann winery is showing the ability of the Kadarka and Kékfrankos grapes to capture the nuances of individual vineyard sites via the Heimann és fiai (and son) series.

At Schieber, the much-traveled winemaker József Rappay has set himself the goal of upping the quality of the basic wines, including by using resistant varieties. He’s a great friend with Jani Márkvárt, who is certified organic, not only for the consumer’s benefit but also for his own health. An almost-ready selection of his old bush vine Kadarka, spontaneously fermented in the 2021 vintage, tasted incredible and will later be available at Bortársaság.

For orange wines, check out offerings from Dúzsi and Posta.

4

www.bbj.hu

Budapest Business Journal | November 5 – November 18, 2021

News///in brief Cultural

Michelin-starred Stand Staff Win Bocuse d’Or National Round The sous chef and commis chef of Budapest’s Michelin-starred Stand Restaurant have won the national round of the international Bocuse d’Or gastronomy contest, the Hungarian Bocuse d’Or Academy said, according to azuzlet.hu (The Business). Sous chef Bence Dalnoki and commis chef Patrik Nyikos will represent Hungary at the 2022 Bocuse d’Or Europe, which Budapest will host in March. Hungary last hosted the European qualifier for the competition in 2016.

British Translator Len Rix Presented Hungarian Gold Cross of Merit The British translator Len Rix was presented with the Hungarian Gold Cross of Merit in London, in recognition for his translations of important modern Hungarian literary works such as Antal Szerb’s “Journey

by Moonlight” and Magda Szabó’s “The Door,” according to state news agency

MTI. Hungary’s Ambassador to the United Kingdom, Ferenc Kumin presented the award. In a laudation, Máté Vincze, the head of the Liszt Institute London, said Rix developed an admiration for Hungary as a boy, first learning of the country after the defeat of England by the Hungarian national team in 1953, then seeing Hungarian youth challenging Soviet tanks in 1956 in cinema newsreels. Rix taught himself Hungarian, with the help of textbooks, recordings, and literary works, determined to learn the language after hearing an acquaintance speak it, he added.

2 Concerts to Celebrate Polish Independence The Embassy of the Republic of Poland and the Polish Institute in Budapest will commemorate the restoration of Polish independence with two concerts, according to profitline.hu. JMK Poniatowski’s “Mass in F major” will take place on November 7 at the Assumption Parish Church in downtown Budapest, while a concert of the Wroclaw Baroque Ensemble will happen on November 11 at the Academy of

Socialite | 23

Hungarian State Opera Opens Eiffel Art Studios

The Eiffel Art Studios of the Hungarian State Opera House were inaugurated on October 25, 2021 (World Opera Day). Photo by Balázs Mohai / MTI.

The Hungarian State Opera has celebrated the grand opening of the Eiffel Art Studios, its new performance center, and workshop, at a landmark industrial area in the capital, according to Magyar Nemzet (Hungarian Nation). In a more than HUF 33 billion project, parts of a network of vast covered

Music. The Polish Institute said Poland regained its independence on November 11, 1918, after 123 years of division.

Hungary Joins Open Science International Initiative Hungary has joined the open science international initiative, which aims to make research and development and innovation accessible to all. Tibor Gulyás, Deputy State Secretary of the

spaces constructed late in the 19th century for the upkeep and repair of rolling stock were converted to suit the modern needs of the opera house. Gergely Gulyás, the head of the Prime Minister’s Office, called the opening “an important moment for the strengthening of Hungary’s cultural identity,” adding that a popular music education center and the new Transport Museum would complement the new venue. Hungarian State Opera director Szilveszter Ókovács said the Eiffel Art Studios was “not just brick and mortar” but a space for “benefiting from human values [...] using the strength of preparation, experimentation, and discovery.”

Ministry of Innovation and Technology, made the announcement at the National Research, Development, and Innovation Office, according to profitline.hu. Gulyás emphasized that the accession will allow the free use of results, documents, and information created during research and development. The open science movement, which is already widespread in international science policy, is also linked to the relevant policy objectives of the European Union, he explained.

PROMOTION

Over 200 Years Old, With all the More Vitality The 210-year-old Pannon Philharmonic fosters a centuries-long musical tradition in a state-ofthe-art and dynamic framework. In December this year, the orchestra is awaiting the audience with its festive jubilee concert.

The Pécs-based musical ensemble has become of central importance in the Hungarian music scene, reflected by widespread international acclaim. It is the only non-Budapest-based orchestra in Hungary to run a hugely successful subscription series in Müpa for 15 years.

It is a true breakthrough in the history of Hungarian music that the Pécs-based orchestra will have the opportunity to perform in the grand hall of the Musikverein on six occasions, within the framework of the longstanding Musik der Meister series between October 2021 and June 2023. The orchestra can thank its high standards and quality for the invitation.

The resident orchestra of the Kodály Center in Pécs will celebrate the 210th anniversary of its birth with a homage to founder Johann Georg Lickl in a festive jubilee concert in Pécs, the Baranya county seat, on December 9, and in Müpa in Budapest on December 10.

The legal predecessor of the ensemble was the Music Association, founded in

1811 by Lickl, a contemporary of Mozart and a student of Haydn, who had moved to Pécs. The association gave its first concert on December 9, 1811. In the early 19th century, Lickl was already a celebrated composer in Vienna and was offered a position by the Bishop of Pécs in 1806.

Intense Music Life

The young master’s presence catalyzed an intense music life in the city. Lickl employed musicians from Vienna and soon turned the ensemble into Hungary’s best orchestra. The close and vigorous musical relationship between Vienna and Pécs of old, when compositions premiered in Vienna soon followed on the stage in the Baranya county seat, cannot be revived fully through the Musik der Meister series, but it undoubtedly keeps Lickl’s tradition alive.

In December, the opening piece of the festive jubilee concert will be the orchestral version of a four-hand piano sonata written by Lickl himself. The

transcription for a symphony orchestra was carried out by the ensemble’s permanent conductor, András Vass.

The night will continue with Brahms‘ burnished “Piano Concerto in D minor,” representing a serious technical and mental challenge for the soloist. The event will conclude with Mussorgsky’s “Pictures at an Exhibition,” simultaneously revealing to us the joy of visual art, the Russian universe of legends, and Romantic program music.

The audience will see and hear the acclaimed concert pianist Nelson Goerner on the stage, with the

orchestra will be playing under the baton of the chief conductor, Gilbert Varga. The National Cultural Fund of Hungary is funding the production.

For further information, please visit our website at https://www.pfz.hu/en.