UPC Hungary announced plans to launch mobile internet services from today, relying on Vodafone’s network. UPC also considers launching mobile voice services, but not in the in the short term (decision to be made in about 6-9 months). UPC expects to attract several thousands of subscribers from its current customer base (UPC has a 27% market share in the Hungarian TV segment).
Our view:
It seems like the cable operator UPC could become another MVNO in Hungary (UPC has MVNOs in the Netherlands and in Chile). (338,1 GBp, -0,37%) Mobile and the soon to be launched Btel (Business Telekom) will also use Vodafone’s network (Vodafone has 23% market share in mobile voice segment in Hungary). The trend is such that incumbent operators are using MVNOs or branded resellers to increase market share in either the pre-paid market or in the mobile internet segment. For example (420 HUF, -0,24%) has created an agreement with Lidl (branded reseller) earlier this year, while Telenor has an agreement with Red Bull. We expect neutral reaction to the UPC announcement, but acknowledge that competition in mobile internet and mobile voice segment should intensify in the future.