Hungary - Country Commercial Guide
Information and Communication Technology

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-11-19


There is a significant government focus on the ICT sector, still, the digital transformation is progressing at a slower pace than necessary.  The ICT sector produced gross value added (GVA) is estimated to amount to USD 20 Billion (HUF 6,000 Billion) in 2020, which means that the digital economy makes up at least 20% of Hungary’s overall GVA. With the in-house digital developments of non-ICT companies (e.g., car manufacturers or financial service providers) included, the digital economy accounts for at least 25% of the total GDP. The mid-term outlook is positive as the pandemic accelerated the momentum for digital transformation and cloud adoption in the private and public sector.  There could also be significant opportunities derived from the EU recovery investment strategy, which has a major digital element.

Software development in Hungary contributes significantly to the country’s economy, representing about 6% of GDP. Hungary also has a large share of outsourcing within the region, with 80,100 specialists employed in the IT sector. IT-friendly policies such as financial support for R&D have helped the country attract several multinational companies such as Siemens, Microsoft, Deloitte, Ericsson, Nokia and TATA to establish R&D centers in the country. Sectors of relative weakness, including transportation, banking and healthcare represent opportunities in terms of future IT-related growth. Hungarian IT spending is expected to grow at 2% through 2022, driven mainly by an increase in public sector spending, which reflects three major drivers:

1) Digital transformation: investment in future technologies, including Internet of Things in manufacturing, retail, utilities, agriculture, logistics and AI, particularly in customer service and customer-facing deployment.

2) GDPR-related backlog: regulatory compliance (mainly GDPR) has been a key driver in the Hungarian IT services market during 2018. Continued investment in systems and processes still required to catch up with best practice.

3) Public-sector investment to increase efficiency and reduce overheads: the public sector in Hungary spent more than USD 167 Million (HUF 50 Billion) on IT services in 2018, 21% of the whole information service market, driven by EU funding through to 2021 (although this is expected to be extended through 2026, when the next five-year EU budget is agreed).

The hardware segment is forecast to be broadly flat through 2023, with systems integration growing at a rate of 2% and software at close to 7%. Bearing these differing growth rates in mind, the Hungarian market offers opportunities in high-demand new technologies including digitalization, deep learning, artificial intelligence, Industry 4.0, cyber security and fintech.

Systems integration (SI) and application development represent approximately a quarter of the market, while the public, finance, telecommunications, and manufacturing sectors make up around two-thirds of market revenues. The fastest growing segment of the system integration market is outsourced services, forecasted to grow at a CAGR of 3.5% (2018–23) creating market opportunities for global IT integration companies, most of which are not yet present in the market, such as Accenture, Cap Gemini, Citrix, etc.

The mobile telecommunications market has 12.775 Million subscriptions. The number of mobile subscriptions grew by 1.1% over the year with a gain in post-paid subscriptions having more than offset the loss in prepaid subscriptions. Operators are trying to maximize their revenues from selling premium services and high-speed data packages to existing clients and business customers.

The 5G strategy based on the proposals of the 5G Coalition (5GC), has yet to be adopted by the Hungarian government.  It aims to make Hungary a major European center for 5G development.  It should also take the leading role in the region in testing 5G applications. The multi-band award process took place as an auction in March 2020. The mobile sector’s three major players – Telenor, Vodafone (UK) and Magyar Telekom (the successor of the former monopoly telecommunications firm, now majority owned by Deutsche Telekom) – won licenses.  It involved 700 MHz, 3400-3800 MHz bands and remaining spectrum in the 2100 MHz and 2600 MHz bands. In terms of market share, by the end of 2019 Magyar Telekom had a 44.8% market share, Telenor 27.2%, and Vodafone 26.7%.  Other operators include DIGI – which is owned by RCS&RDS (Romania), but agreed to sell its operations to local firm 4iG in March 2021 – and MVM Net, a state-owned company that focuses on the public sector and which has recently been transferred to digital broadcaster Antenna Hungária.  DIGI was barred from the 5G auction. Immediately after winning the license, Magyar Telecom launched commercial 5G services together with Ericsson. Vodafone launched services in October 2019, in partnership with Huawei.  The third operator, Telenor, has yet to launch commercial 5G services.  During May 2019, it launched pilot services in Győr (Northwest Hungary) using technology from ZTE Corporation, which also provided 5G-capable mobile phones for testing.

Broadband connectivity: According to the European Union (EU) Digital Economy and Society Index (DESI) 2020, Hungary ranks 7th in broadband connectivity after showing significant improvement in the past year, mainly due to good broadband coverage, speed, and high 4G coverage. In 2019, the coverage of next generation access (NGA) grew to 90%, which is above the EU average. Opportunities exist in digital public services and in the integration of digital technologies in businesses, such as cloud computing and big data.

Satellite communications:  The launch and operation of the first Hungarian satellite, scheduled for 2024, will create sales opportunities for a wide range of products, services, and solutions ranging from the satellite itself to launch services.  Hungary’s first commercial satellite will be suitable for broadcasting; internet and telephone services; data transmission; commercial, governmental, and scientific research missions. In addition to participation from Hungarian universities and researchers in the commercial satellite launch program, 4iG – an Hungarian IT company, holding a 51% controlling stake in the company ‘CarpathiaSat Zrt’, which was formed with the goal to launch the satellite – aims to establish a strategic collaboration with domestic and international companies with significant experience in the space industry.

Smart city initiatives in Hungary, until now, were incentivized by collaborations of municipal and business players in this sector, often focusing on specific technical advancement. Hungary has yet to embark on a large scale and centralized smart cities undertaking as seen in many other Western European countries.  To enforce a more centralized management in this area, in 2015 the government assigned the Lecher Center ( ) to coordinate and support upcoming smart city initiatives and to link public and private players, thus igniting a movement for more smart city projects in Hungary. There is no specific ministry assigned by the government to be responsible for smart city projects, although it is mostly covered by the Ministry of Innovation and Technology, as well as the Ministry of Interior’s e-Government Secretariat. The concept of smart cities appears in several government programs including the Modern Cities Program (MCP) that is a development project running until 2022, with a budget of HUF 3,500 Billion (USD 12 Billion) available for 250 projects in 23 municipalities across Hungary.  By the end of 2020, 75 MCP projects had been completed.  During the next EU cycle, several ministries plan smart city developments with a projected budget of HUF 100 Billion (USD 330 Million).

Smart mobility is one of the best prospects. Intelligent transportation systems are being installed in several cities.  The development of such solutions has become a priority for local municipalities and includes radar, cameras, automatic scales, and advanced electronics for road transport.  Hungary’s Modern Cities Program includes USD 133 Million for public transportation and smart mobility development projects.  The construction of a 5G trial zone is in progress in Zalaegerszeg (western Hungary), aiming to embody autonomous operation, 5G development and all the other specific features of the smart city.

Smart buildings and construction are other areas of focus. Both the public and private sectors are converting current buildings into smart buildings, including renewable energy sources, advanced access controls, and sophisticated security management among other innovations. Hungary’s Modern Cities Program, for example, is managing funds worth USD 343 Million for the development of energy systems and public utilities in 8 cities.

Cyber security: Hungary’s cyber security ranking has slightly deteriorated and has fallen to 35th place on the International Telecommunication Union’s Global Cybersecurity Index (GCI) 2020 list (from 31st place three years ago).  The Hungarian government has approved the National Cyber Security Strategy, which provides a framework for improved cybersecurity. The country has also adopted the EU Directive on the Security of Network and Information Systems (NIS Directive) that is expected to boost demand for cybersecurity solutions.

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U.S. Embassy - U.S. Commercial Service
Eva Bosze, Commercial Specialist
Budapest, Hungary
Tel:  +36 (1) 475-4234