The liberalization of Hungarian telecom market attracted a number of international investors such as Deutsche Telekom, Vodafone, Telenor and UPC, which have considerably improved telecom infrastructure, providing now real effective competition and expanding coverage and quality of offered services. The market became truly dynamic only after Hungary’s accession to the European Union in 2004. The regulator, the National Communications Authority, has rigorously promoted competition, reducing interconnection tariffs and number portability fees, and has also ensured that a fair access regime is in place, with a number of LLU agreements concluded. However, new entrants in the fixed-line sector will be fighting for a shrinking market, with fixed-line numbers in decline.
Hungary has successfully made the transition to a market economy, with a per capita income nearly two-thirds that of the EU-28 average. In late 2008, Hungary was heavily affected by the global financial crisis and had to require financial assistance from the EU, the IMF, and the World Bank. The global economic downturn, declining exports, and low domestic consumption and investment, dampened by government austerity measures, resulted in a severe economic contraction. After a series of policy changes in the taxation system, the government rejected EU and IMF economic policy recommendations. Global demand for high yield has since then helped Hungary to obtain funds on international markets, making significant progress in reducing its deficit to under 3% of GDP.