Crisis looms for Hungarian cable

A new utility tax due to come into effect at the beginning of 2013 could result in the closure of several dozen cable operators in Hungary.

In a statement, the Hungarian Cable Communications Association (HCA) says it has undertaken a survey among its 170 members, who together provide services to more than 2 million households.

The results of this survey show that in some small communities, where the establishment of subscriber connections has required cable sections longer than average, the amount of tax per subscriber may reach or even exceed the monthly fee of the service.

In some instances the provider would have to pay over HUF8,000 (€27.7) per subscriber each month in tax, and in dozens of cases the tax would amount to between HUF1-8,000.

The HCA concludes that cable services received in at least 28,000 homes now face the real threat of closure.

Even at least 59 networks with brand new telecom infrastructure built with subsidies could be closed.

As a result, the association has asked the ministry concerned, government and parliament to review the utility tax.

The utility tax is some respects compensates for a controversial telco tax that the Hungarian government recently withdrew, arguably due to pressure from the EU.