Market Insight

DIGI Hungary to acquire rival telco Invitel

July 27, 2017  | Subscribers Only

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DIGI, one of the key players in the Hungarian pay TV and telecoms market, has reached an agreement to buy Invitel’s retail and small business customers for €140.7m. Invitel is the leading alternative telco in the market, offering pay TV, internet and fixed line telephony. The company is part of Invitel Group, which was sold to the CEE China fund by Magyar Telekom earlier this year. 

After the sale of its retail and small business base, Invitel plans to focus on the corporate IT and telecommunications market, under the brand Invitech Solutions. By broadening its IT scope and expanding its optic network, together with new acquisitions, Invitech Solutions is planning to double its annual revenue. The parties negotiated a reciprocal provision of services for a period of ten years. 

Our analysis

Overall, this strategic move will consolidate DIGI’s position in the Hungarian market, improving its competitive position in cable TV, IPTV and fixed-line services. DIGI’s parent company RCS & RDS has operations in several countries in Europe, including Hungary, Italy, Spain and Romania. While the majority of the company’s revenues are generated from its home market Romania, Hungary is a key market in terms of pay TV. Over the past year, both IPTV and cable have recorded a strong growth in subscribers in Hungary, proving to be a profitable sector to invest in.


One of the key strategic goals of DIGI’s acquisition of Invitel is further expansion of its cable network in order to challenge the current market leader, UPC. 

Digi is the leading satellite operator in terms of subscribers. However, only 1 in 4 pay TV households in Hungary have opted in for satellite TV. The country’s dominant pay TV platform remains cable, accounting for more than half of all pay TV households. Liberty Global’s UPC holds a very strong position in this sector, with a 35% share of the country’s cable subscriptions at the end of2016. By bringing Invitel’s customers under its own operation, DIGI will strengthen its share of cable subscribers in Hungary. 

DIGI will also be entering the IPTV market with an already existing subscriber base

IPTV is the third most popular pay TV platform in Hungary. In 2016, IPTV accounted for 18% of the country’s households. Magyar Telekom’s T-Home is currently dominating the IPTV market with 87% share of the subscriptions, due to its extensively developed broadband network. Invitel is the second largest provider of IPTV services, with 11% IPTV market share in terms of subscribers. With IPTV services rapidly gaining popularity across Europe, this is a good time for DIGI to enter the IPTV market. 

The acquisition of Invitel will grant DIGI the largest share of Hungary’s broadband market

Currently DIGI provides cable and satellite television, together with fixed broadband and fixed voice services, however, in terms of fixed line connections it has not yet reached the breadth of the two market leaders, Magyar Telekom and UPC. The acquisition of Invitel fits well into DIGI’s multiplay strategy, as this will secure 250 thousand additional broadband subscribers from Invitel’s DSL and cable networks. 

In 2015, the broadband market in Hungary was dominated by the incumbent Magyar Telekom; however its subscriber base has been declining over the past year. Despite the incumbent’s rigorous investments in innovation and network development, UPC became the leader in Hungary’s broadband market with 22% subscriber market share at the end of 2016. 


The acquisition of Invitel will prove important for DIGI in gaining a more competitive position in the broadband market and is likely to result in DIGI becoming the leading broadband provider in Hungary. Nevertheless, UPC and Magyar Telekom will still present a significant challenge and all three operators will remain in close competition in the near future. Magyar Telekom continues to improve its existing networks and aims to provide broadband services to additional 111 thousand households in previously uncovered areas. Meanwhile, UPC has experienced the strongest growth in broadband subscriber net additions over the last couple of years and nearly all of its network has been upgraded to the DOCSIS 3.0 standard, meaning that they are able to provide high-speed connections over their network. 

In face of the strong competition in the Hungarian broadband sector, adding Invitel’s subscribers to DIGI’s own base may not be sufficient for DIGI to maintain its newly acquired leading position. The company will need to continue to invest in infrastructure upgrades in order to maintain its competitive advantage.

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