Hungary

1) REFERENCES

Commission Opinion [COM(97) 2001 final - Not published in the Official Journal]

Commission Report [COM(98) 700 final - Not published in the Official Journal]

Commission Report [COM(1999) 505 final - Not published in the Official Journal]

Commission Report [COM(2000) 705 final - Not published in the Official Journal]

Commission Report [COM(2000) 700 final - SEC(2001) 1748 final - [Not published in the Official Journal]

Commission Report [COM(2002) 700 final - SEC(2002) 1404 - Not published in the Official Journal]

Commission Report [COM(2003) 675 final - SEC(2003) 1205 - Not published in the Official Journal]

Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

In its July 1997 Opinion, the European Commission did not foresee any major problems in the field of research and technological development, in realising the potential of the Information Society or in telecommunication liberalisation.

The November 1998 Report confirmed that Hungary had paid special attention to research and technological development and to the Information Society. In the area of telecommunications, further efforts were needed with regard to liberalisation and the monitoring of fair competition.

The October 1999 Report stressed that Hungary had continued to put emphasis on the Information Society and had continued to make progress in the field of research and technological development, in particular through participation in the Fifth Framework Programme. The Report also noted that Hungary had made progress in opening up the telecommunications market. Further efforts were nevertheless needed to complete the regulatory framework, in particular on licensing.

In October 2000, the Commission confirmed the efforts that Hungary had made in this area. The telecommunications market, for example, was already closely aligned with the acquis and with the markets. Efforts still had to be made as regards postal services.

The October 2002 Report noted that Hungary had made continuous progress in the field of science and research. The Report highlighted the major progress made with liberalisation of the telecommunications market and the implementation of its regulatory framework.

The 2003 Report indicated that Hungary was meeting the majority of the commitments and requirements in the telecommunications sector and was partially meeting the commitments and requirements arising from the accession negotiations in the postal services sector. Implementation of the telecommunications acquis needed to be speeded up, inter alia by setting reasonable terms for interconnection.

The Treaty of Accession was signed on 16 April 2003 and accession took place on 1 May 2004.

COMMUNITY ACQUIS

Research and technological development (RTD) activities at Community level, as provided for in Article 164 of the EC Treaty (former Article 130G) and the Framework Programme (Article 166, former Article 130I), are aimed at improving the competitiveness of European industry and the quality of life, as well as supporting sustainable development and contributing to the development of other common policies.

The European Association Agreement provides for co-operation in these areas, notably through the participation of the Associated State in the Framework Programme. The White Paper on the countries of central and eastern Europe and the internal market of the Union (1995) includes no direct measures in this field.

The aim of Community telecommunications policy is to remove barriers to the proper functioning of the single market in equipment, services and telecommunications networks, to open up foreign markets to Community companies and to make modern, accessible services available to EU nationals and companies. These aims are to be achieved by harmonising standards and requirements for the provision of services, opening up the terminals, services and networks markets and adopting the necessary regulations.

The European Association Agreement provides that the improvement of standards and practices in the field of telecommunications and postal services, standardisation, regulations and infrastructure modernisation to Community level should be done by means of cooperation. The White Paper places emphasis on the alignment of regulations, networks and services and the measures to be taken for the gradual liberalisation of the sector.

EVALUATION

Research and technological development

With regard to research and technological development (RTD), the present Community acquis does not require transposition into national legislation. The Hungarian Government has nonetheless significantly increased financial support for the sector from 0.6% of GDP in 1998 to 1% in 1999. Since 1999, Hungary has been fully associated with the Fifth Framework Programme (1998-2002). It also participates in the Euratom Fifth Framework Programme on research and training activities (1) and has expressed interest in being associated with the Sixth EC Framework Programme (2002-2006).

Hungary has also decided to open up its research activities to businesses, scientists and universities in the Member States. Significant salary increases were granted in 2001 for universities and research institutes. New National R&D Programmes were launched in 2001 to support the implementation of comprehensive research, development and innovation projects with much higher grants.

The 2002 Report notes that the government has introduced further tax benefits to support companies in their efforts to increase their research activities. A Hungarian enterprise can now deduct up to 200% of its research expenditure from tax, a situation which will particularly benefit SMEs, which are not normally in a position to conduct expensive in-house research. However, efforts should be made to increase the participation of SMEs. The gross domestic expenditure on R&D is still relatively low and needs to be increased. This is envisaged by the Ministry of Education which is responsible for research and science policies.

Telecommunications

In the field of telecommunications, Hungary has made important progress both in terms of networks and services. Several measures have been adopted for alignment with the acquis. The telecommunications sector has grown substantially, in particular with regard to the penetration of mobile and Internet services. Penetration in mobile services now exceeds 50%. There are three GSM operators but UMTS licences have yet to be issued. Fixed network modernisation is complete, but penetration peaked at 37% and is now slowly falling. Price rebalancing still has some way to go, and more emphasis on fair competition is needed. The Hungarian Government has adopted a decision which outlines the basic principles of the info-communications infrastructures and services until 2005.

The Hungarian market has been further liberalised, in particular by allowing the commercial provision of voice telephony to closed user groups, by authorising the provision of Internet services by cable TV operators and by issuing two licences for Internet telephony to a private company. According to a government decision of May 1999, all free mobile operators received allocations for both GSM 900 and DCS 1800 frequencies providing them with equal chances to compete in the mobile telephone market. The operator of the ground-based telephone network is now about to be completely privatised. Hungary opened the main fixed voice market in December 2001.

In June 1999, Hungary adopted new legislation prohibiting voice telephone providers from having exclusive rights to establish or acquire cable television networks in their area of concession. This aims to promote a competitive environment after the opening of the voice telephony market.

As regards the regulatory framework, the Hungarian telecommunications market has been open to competition since the entry into force of the new Communications Act in December 2001, and the harmonisation of primary and secondary law with the acquis is almost completed. Some important adjustments are still needed with regard to carrier selection and transparency of the implementation of the interconnection acquis, however, and the universal service provisions are not yet entirely in line with the acquis. To develop further competition in the market, measures need to be taken to reduce both interconnection and wholesale Internet access prices. In 2003 the Government adopted a new Telecommunications Act aiming at full transposition of the 2002 acquis.

The provisions of the acquis relating to data protection in data telecommunications have been implemented for GSM mobile networks. Tariff re-balancing is progressing rapidly following the reduction of rates for leased lines and interconnection. Local call charges and rental fees for residential and business lines have increased substantially. The main issues remaining are the alignment of the provisions on universal service, numbering and licensing.

Postal services

Some progress has been achieved in postal services following the signature of an agreement with UNEX (Unipost External Monitoring System) and the establishment of a department responsible for licensing and supervising the postal sector. In 2002, postal liberalisation continued in line with the acquis. Only services which may be reserved in accordance with the EC Directive had not been liberalised. The abovementioned Communications Act is also aimed at ensuring universal service funding for postal services. New legislation has still to be adopted on the Universal Postal Service Fund. Administrative capacity in this sector needs to be stepped up, including through further staffing and training.

Information Society

In the field of the Information Society, Hungary is actively participating in the High-Level Committee on Information Society. The number of households with a computer and the number of Internet users has risen sharply. A National Information Society Strategy has been elaborated with the aim of promoting the development of the Information Society. An important implementing instrument of this strategy is the development of the Information Society and Economic Development Programme, which takes into account the priorities of the eEurope+ (2) Action Plan.

(1) Decision of the EU-Hungary Association Council of 12 July 1999 adopting the terms and conditions for the participation of Hungary in Community programmes in the field of research, technological development and demonstration (1998 to 2002) and in programmes for research and training activities (1998 to 2002).

Official Journal L 245, 17.09.1999

(2) The eEurope+ Action Plan aims to accelerate economic reform in the candidate countries through the use of technology and the tools of the Information Society.

Last updated: 20.02.2004