Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study 
CENTRE FOR REGIONAL STUDIES 
OF HUNGARIAN ACADEMY OF SCIENCES 
 
 
 

DISCUSSION PAPERS 
 
No. 42 
Regions in Information Society 
– a Hungarian Case-Study  
 
 
 

by 
Bálint CSATÁRI  – Imre KANALAS 
– Gábor NAGY – Tibor SZARVÁK 
 
 
 
 

Series editor 
Zoltán GÁL 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Pécs 
2004 
 


Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study 
 
 
 
 
 
 
 
 
ISSN 0238–2008 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2004 by Centre for Regional Studies of the Hungarian Academy of Sciences. 
Technical editor: Ilona Csapó. 
Typeset by Centre for Regional Studies of HAS 
Printed in Hungary by Sümegi Nyomdaipari, Kereskedelmi és Szolgáltató Ltd., Pécs. 
2   

Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study 
Contents 
Introduction (B. Csatári).........................................................................................   7 
The importance of information sector within national economy 
(I. Kanalas) ........................................................................................................  8 
1  The theory of information society (G. Nagy) ....................................................  13 
1.1  Basic trends in the revolution of information technology..........................  13 
1.2  The economic impacts of transformation into an information society.......  15 
1.3  The social and cultural challenges of the information age.........................  18 
1.4  Prognosticated impacts on spatial structure ...............................................  20 
2  Telecommunication infrastructure, networks, services 
(I. Kanalas – G. Nagy)......................................................................................  22 
2.1  The development of telecommunication and data transfer networks.........  22 
The historical past – Role of telecommunications services .......................  22 
The legacy of Hungarian telecommunication ............................................  22 
New development trends following the change of regime.........................  26 
Concluding remarks ...................................................................................  31 
2.2  Telecommunication and data transfer technologies ...................................  32 
Fixed telephony..........................................................................................  32 
Mobile communications.............................................................................  37 
VSAT services ...........................................................................................  39 
Cable television networks ..........................................................................  40 
Microwave networks..................................................................................  44 
Outlook ......................................................................................................  45 
2.3 The future trends of telecommunication and data communication 
market.........................................................................................................  46 
Future trends in services ............................................................................  47 
Possible changes in transfer technologies and telecommunication 
networks.....................................................................................................  48 
3  Internet in Hungary (I. Kanalas)........................................................................  52 
3.1  The evolution and development of the Internet .......................................... 52 
The first steps towards internetworking.....................................................  52 
The HBONE-system ..................................................................................  53 
The “Sulinet” Schoolnet-system ................................................................  55 
Commercial networks ................................................................................  56 
3.2  Internet access in Hungary from international perspectives ......................  59 
3.3  The future development trends of Internet in Hungary..............................  60  
 


Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study 
4  The competitiveness of counties within the Information Society 
(B. Csatári – I. Kanalas)...................................................................................  62 
4.1  Spatial diffusion and distribution of domain name servers........................  62 
4.2  The realitive position of counties in the rising information society ..........  71 
5   Regional information society strategies (G. Nagy)...........................................  76 
5.1  Core regions ...............................................................................................  78 
5.2  Traditional industrial areas – Strategies for regeneration ..........................  79 
5.3  The spatial organisation models of new industrial areas............................  80 
5.4  The programmes of rural areas ..................................................................  83 
5.5  Peripheral areas ..........................................................................................  85 
Final remarks (B. Csatári – I. Kanalas – G. Nagy – T. Szarvák)...........................  88 
Annex.....................................................................................................................  93 
References............................................................................................................  108 
4   

Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study 
List of figures 
Figure 1  Optical fibre networks in Hungary (1998) ..........................................  27 
Figure 3  Number of phone main lines by small regions (per 1000 
inhabitants, 1993) ................................................................................  34 
Figure 4  Number of phone main lines by small regions (per 1000 
inhabitants, 2000) ................................................................................  36 
Figure 5  Technical characteristics of CABLE TV networks, 2001 ...................  42 
Figure 6  Number of flats with CABLE TV connections (per 1000 
inhabitants, 2000) ................................................................................  43 
Figure 12  Spatial diffusion of domain name servers in Hungary 
(November, 1998) ...............................................................................  64 
Figure 13  Spatial diffusion of domain name servers in Hungary 
(November, 2001) ...............................................................................  65 
Figure 14  Cumulated rank of counties in the spaces of “traditional” and 
“information” potential (2000) ............................................................  73 
Figure 15  The rank of counties in the dimensions of “traditional” and 
“information” potential (2000) ............................................................  74 
Annex 
Figure 2  Concession areas and service providers of fixed 
telecommunication ..............................................................................  94 
Figure 7  Microwave-based communication network of Antenna 
Hungária Co.  ......................................................................................  95 
Figure 8  The costs of Internet using in 2000, in the countries of OECD (30 
hours outside of „peak-hours”, USD, in PPP, incl. VAT)...................  97 
Figure 9  Changing rate in number of Internet-hosts per 1000 inhabitants in 
some European countries (Hungary = 100%)......................................  98 
Figure 10  Number of Internet-hosts in Hungary (1991–2001) ............................  99 
Figure 11  Changing number of domain-name registrations (1991–2002)...........  99 
List of tables 
Table 1 
Some economic indicators of telecommunication and 
broadcasting industry ............................................................................  9 
Table 2 
The number of businesses and employees within the 
telecommunication sector....................................................................  10 
Table 3 
Changes in the number of businesses between 1995–1998.................  10 
 


Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study 
Table 4 
The share of ICT sector within companies with double entry 
book-keeping within the national economy (percentage) between 
1995–1998 ...........................................................................................  11 
Table 5 
The comparison of GDP with telecommunication investments 
(running costs, in million HUF) ..........................................................  23 
Table 6 
The number of fixed telephone stations in some European 
countries ..............................................................................................  24 
Table 7 
The density of telephone stations by counties .....................................  25 
Table 8 
The number of fixed phone subscribers ..............................................  48 
Table 9 
The division and density of ISDN by counties....................................  49 
Table 11  Changes in Internet access fees in Hungary (HUF/month) .................  57 
Table 12  The number of Internet subscriptions within the categories of 
access method......................................................................................  58 
Table 13  The number of information service providers sorted by service 
type ......................................................................................................  59 
Table 16  The division of domain name proprietors by their basic function.......  68 
Annex 
Table 10  The speed of data-communication in national R&D networks 
(2001) ..................................................................................................  96 
Table 14  The number of internet users in some European countries .................  96 
Table 15  Registered domain-name servers by counties and regions................  100 
Table 17  Main categories of domain-name owners by counties (2001)...........  101 
Table 18a  Rank of counties I. – Demography, Employment, Housing..............  102 
Table 18b  Rank of counties II. – Economy, Enterprises  / .................................. 103 
Table 18c  Rank of counties III. – Infrastructure, Higher education, R&D 
sector .................................................................................................  104 
Table 18d  Rank of counties IV. – Culture, ICT-sector, Media ..........................  106 
6   




Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Introduction 
Some phenomena of regional development – in our opinion – bring ‘special content 
and forms’ into the evolution of information society. On the one hand, shortly after 
easing the gaps of ‘traditional’ regional disparities new development shortages 
arise in the field of information infrastructure but, on the other hand, the spread of 
new technical-informational devices and technologies has or may have some pull-
up effects on the development and catching-up process of underdeveloped areas. 
(Nagy, 2000b, About the information society 1996) 
Space has a new interpretation in this ‘special’ world of telematics (Mészáros, 
2003). Information and knowledge can access any part of the world at a fantastic 
speed. The development of information networks all over the world, Europe and 
Hungary is filtering into every segments of life including spatial changes and re-
gional development as well (The information society, 2000). 
Its consequences on regional policy and regional development are as follows: 
•  First, as a new factor of networking, technical and human infrastructure, it 
may have a pushing force on spatial development, 
•  Second, with its accumulation of enormous data, knowledge and information 
capacities from different areas of human knowledge it may facilitate the in-
novation process of complex spatial development, 
•  Third, according to its character it functions decentralised, which is in per-
fect harmony with the basic principles of regional development and policy, 
•  Fourth – with an adequate technical basis – it may facilitate the development 
of human resources and lifespan learning (e.g. through distance education) 
•  Fifth, it may facilitate – partly in new dimensions – the integration into the 
spatial distribution of labour, the efficiency of regional and urban marketing, 
and also may strengthen regional identity,
 
•  Sixth, it may quickly and effectively set up the multilateral partnership sys-
tem of regional development, 
•  Seventh, – through its data and information basis – it may have a key role in 
the monitoring of regional development
Thus, the development of information technology starting whether from infor-
mation infrastructure or from the development of information society – in case of 
adequate co-ordination and multilateral co-operation – may have a key role in the 
future of regional development in Hungary as well. 

In our paper we are going to provide an analysis on the existing special interac-
tions between the spatial features information technology and the evolution of so-
ciety. We are also going to investigate the special role of regions, the ‘spatial lo-
cations’ of the development of information society.
 
 


Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
The answer for the first issue is relatively easy. It covers only the review of the 
spatial features of the installation and evolution of information infrastructure and 
technology of the near past. However, this problem arises a new interesting ques-
tion: whether the spatial diffusion of IT development follows a similar pattern to 
that of traditional linear infrastructure (telephone, public road) or implies new 
forces of spatial development? (Dilemmas of information society, 2001.) 
The answer for the second issue is far more complicated. The concrete regions 
within the ‘virtual space’ of information society – several so-called ‘intelligent re-
gion’ projects are running within West European states – may be interpreted in two 
ways. Partly in concrete, partly in abstract forms (Fehér–Varga, 2002). 
The concrete results of scientific or public interpretations on regions and other 
spatial units (counties, micro-regions) – they are available on different information 
channels and networks – may only be evaluated in an indirect way. However, the 
extremely high visitors’ traffic at the websites of regional development verifies that 
there is a growing general interest for regional science information. This indicates 
that the development of information society and infrastructure has some spatial 
features and regional aspects that deserve special attention. 
The importance of information sector within national economy 
Telecommunication was the only sector within the national economy, which had a 
straight and intensive development trend. The rate of development was extremely 
high after the completion of privatisation within this sector. By taking a glance at 
the annual development indicators of telecommunication and broadcasting industry 
one can notice that the development rate of this sector had by far exceeded the an-
nual growth rate of GDP between 1996 and 1999 (Table 1)
Thus, the share of telecommunication and broadcasting sector from the GDP in-
creased to 3.5% by 1999. According to the Central Statistical Office, the volume of 
communication sector was 850 billion HUF, of which the total revenue of tele-
communication and broadcasting was 228 billion HUF. Although this sum is in-
creasing every year, it is still below 20% of the average revenue of the Euro zone 
countries (The info-communication sector... 2001). 
According to estimations, the average annual growth rate of the three most 
dominant service branches of telecommunication is about 30%. Within these three 
branches data transfer services are producing the most dynamic growth, though in 
comparison with other segments of telecommunication it is still standing on a low 
base level. 
8   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 1 
Some economic indicators of telecommunication and broadcasting industry 
(Running costs in 
1996 1997 1998 1999 
1997/1996 1998/1997 
1999/1998 
billion HUF) 
Total revenues 
281.0 
399.3 
532.8 
728.4 142.1 134.9 135.2 
Operational revenues 
38.0 
65.9 97.3 
138.7 173.4 147.6 142.5 
Investments 106.7 
142.7 
141.9 192.5  133.7 
99.4  135.7 
Change of GDP (%) 
– 
– 
– 
– 
104.6 
104.9 
104.4 
Source: Ministry of Transport, Communication and Water Management, Central Statistical Office, 
1999. 
Between 1996–1999 the total valorised value of assets invested into the tele-
communication sector exceeded the value of 145 billion HUF (with an annual av-
erage of 146 billion HUF). The preparation for the liberalisation of telecommuni-
cation is well illustrated by the fact that the total value of assets invested into tele-
communication companies was over 200 billion HUF in year 2000. This is 10.9% 
of the total value of investments into the national economy (Business outlook, 
2001). 
The economic perspectives of telecommunication and data communication are 
clearly illustrated by a permanent increase in the number of registered companies 
and private businesses since the political and economic transformation (Table 2–4). 
However this did not generate an automatic change in the number of employees 
within this sector. By this we mean that while on the one hand some new segments 
(data network services, Internet services) significantly increased both market ac-
tivities and the number of new jobs, other areas (wired voice services) were rather 
initiating the rationalization of their existing resources.  
Within the major tendencies of global digital revolution the concentration of 
telecommunication and information sector has become the most dominant during 
the past ten years. It has created a homogenous info-communicational sector
which through the integration of all the major media sectors, beginning from the 
production through the storage, processing and dissemination of information may 
turn into a complex system of information economy (Farkas, 2000). 
This process requires foreign capital involvement for some firms and trusts, ac-
celerating in this way the concentration of telecommunication profiled ventures. In 
such a small market as Hungary the chances for starting a large-scale competition 
among several companies are very small. The chances are far better for an oli-
gopolic market system
 with few competitors to achieve dominant positions on the 
market with a large number of small firms to fill out the gaps within this sector. 
 


Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
These small firms would at first establish their presence in the market then look for 
chances of further expansion. Another driving source of concentration is that a 
company striving for long-term competitiveness should either have dominant posi-
tions within some partial segments or should be transformed into a complex com-
municational trust to reduce its economic risks in the global competition for mar-
kets (Farkas, 2001). 
Table 2 
The number of businesses and employees within the telecommunication sector 
 
1996 1997 1998 1999 
1997/1996 1998/1997 
1999/1998 
Number of registered 
–  1249 1,312 1,532 
–  105.0  116.7 
businesses 
Of them: the number 
– 446 497 624 
– 111.4 125.5 
of companies 
the number of 
– 803 815 908 
– 101.4 111.4 
private businesses 
Employment (number 
21,481 21,765 21,350 21,732  101.3 
98.1 
101.8 
of employees) 
Of them: employed at 
– 17,456 16,329 14,958 
– 
93.5 
91.6 
wired services 
employed at mobile 
– 1,932 2,098 2,417 
–  108.6  115.2 
services 
Source: Central Statistical Office, Statistical Yearbook of Communication, 1999. 
Table 3 
Changes in the number of businesses between 1995–1998 
(previous year = 100.0) 
Name 
1996/1995 1997/1996 1998/1997 
Changes in the number of businesses in ICT sector 
116.5 
113.6 
110.6 
Changes in the number of companies with double 
116.5 114.1 108.6 
entry book-keeping in national economy 
Changes in the number of total businesses within 
103.2 103.8 108.6 
the national economy 
Source: The Information and Telecommunication Sector in Hungary 1995–1999, Central Statistical 
Office, 2001. 
10   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 4 
The share of ICT sector within companies with double entry book-keeping within 
the national economy (percentage) between 1995–1998 
Name 
1995 1996 1997 1998 
Gross output 
6.3 
8.4 
11.4 
11.7 
Gross added value 
8.0 
10.0 
11.4 
12.0 
Source: The Information and Telecommunication Sector in Hungary 1995–1999, Central Statistical 
Office, 2001. 
The future development potentials of the information sector will mostly depend 
on education, R&D, brain potential, creativity, the demand for improving living 
conditions and for high quality services.  
It is expected that information services will be the most rapidly developing eco-
nomic sectors, which will be manifested in the employment structure as well. It is 
difficult to forecast what economic impacts will ICT technologies have, but the 
current tendencies are showing some basic trends and changes. 
In some areas of ICT sector (information services, e-commerce) such business 
organisations can be established with a relatively small investment that may flexi-
bly follow the changes of the demand side of market. Their number and economic 
importance may significantly increase in the next few years. 
In all segments of economy the information about market changes will have es-
sential importance. For this reason, a growing number of business organisations are 
building up their internal and external information networks. 
New schemes of corporate organisation and layout models are being introduced 
(e.g. the spread of telework projects is expected after passing the relevant legal 
regulation system). The intensity of horizontal inter-firm relationships will in-
crease. Due to the small size of the Hungarian market company fusion’s and new 
strategic alliances are expected within the telecommunication, information industry 
and media sectors (Havass, 1995). 
Site selection criteria are also in change. Instead of traditional factors (natural 
and energy resources, the abundance of manpower) the elements of qualitative pro-
duction will enjoy priorities. Not only easy physical accessibility, but also the pres-
ence of innovative and adaptive consumer markets that count. 
Due to their high demand of human capital ICT companies during their site se-
lection are taking special care for the proximity of research and high education in-
stitutes that offer advanced technological and creative brainwork environment. 
Therefore, the core areas of the “new economy” and advanced information services 
 
11 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
will be Budapest and Hungary’s regional centres (Pécs, Szeged, Debrecen, Győr, 
Miskolc, Székesfehérvár) where information activities are on the highest level. At 
the same time in the “semi-peripheral areas” – even if their potentials of informa-
tion technology are improving – the traditional industrial sectors, agriculture and 
public services will keep their dominance (Nagy, 2001). 
12   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
1  The theory of information society 
Theoretical specialists generally agree that the major trends of economy have fun-
damentally changed during the past twenty years. The majority associate these 
changes with the long-term cyclical periods of economy, i.e. they think we are 
facing a new Kondratev cycle, which has two leading sectors: information science 
and biotechnology.1 This new technological paradigm has two basic features. On 
the one hand, new technologies are in close relationship with information. Infor-
mation may be considered both as resource and final product. On the other hand, 
the major impacts of innovations here can far better be observed in processes than 
in products. Although there are very important renewal processes in production and 
the distribution of new products has vital importance in economic development, it 
is the transformation, the changing of ongoing processes that have the deepest im-
pact above all (Bell, 1979). 
This period is characterised by the free generation, distribution, access and utili-
sation of information and knowledge, by the establishment of their social environ-
ment, the globalisation of several areas of life, all of which are the products of the 
rapid development of computerisation, telecommunication, entertainment elec-
tronics and media industry (commercial and public media, printed and electronic 
press and their services) and their co-ordinated and accelerated integration proc-
ess2. Within their impacts the possibility of multilateral communication and the 
access to an enormous volume of information are the most dominant (Havass, 
1998). 
1.1  Basic trends in the revolution of information technology 
The information age is based on quite different organisation models, processes and 
phenomena from the period of modern industry, its previous socio-economic para-
digm, which was also completely differing from the previous formation character-
ised by the dominance of agricultural society and economy. In this chapter we are 
                                                      
1 Each periods of the Kondratev cycle has different technological-economic paradigms. They are 
characterized by a coherent and hierarchical structure of activities and technologies, by the complex-
ity of technical standards, by the utilization of dominant materials, instruments and systems, by the 
restructuring of the institutional models, by the assimilation of new phenomena, and by the chang-
ing relationship between economic partners. For this phenomenon Gershuny (1987) in used the term 
social-technological system. 
2 In literature this process is described as the simultaneous concurrence of development and conver-
gence. 
 
13 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
going to describe those trends that – in our opinion – are the most adequately rep-
resent the mainstream of the whole transformation process. 
1  The big turns into small – Schumacher’s (1991) model on the shifting of 
economic standpoints seems to work in other areas too but behind the sur-
face these phenomena are not so definite and clear. It is true, that the de-
gree of individual autonomy and the independence of small communities 
are increasing – just as the local dependency of small communities is de-
creasing, the freedom of decision is increasing and the equalisation of spa-
tial distribution processes is accelerating. But on the other hand, the new 
global systems allow less and less actors and potential competitors on the 
market, they are creating uniformed firms, institutions and they are also 
trying to create standardised consumers on their markets. The standardisa-
tion of large regions and the growing demand of small regions for auton-
omy are simultaneous spatial tendencies now. 
2  Material stuff is pressed out by information – the turning of information 
into equal or even superior productive force has already been mentioned 
but in this context the dilemma of cultural values here is that whether, to 
preserve traditions and/or their modernity (Gerken,  1993). Thinking over 
this matter one should realise that here the preservation of socialised man-
kind as the consumer of social values is the question (Hamelinck, 1994). 
3  The industrial age turns into post-industrial – according to Bell’s (1973) 
theory, post-industrial refers to a service-based economic structure, while 
in social context this term means the dominance of services, the 
transformation of knowledge into primary resource. The majority of 
innovations cover the fields of computer science, telecommunication and 
media. As a result of convergent development these sectors are integrated 
into a homogenous information economy. 
4  Centralisation turns into decentralisation – there is a kind of reaction be-
tween large industrial organisations to tackle those problems they have cre-
ated themselves (Erdősi, 1991). 
5  National turns into global – according to György (in: About... 1996), radi-
cal globalism is such an economic environment which has been developed 
through various networks representing such an enormous intellectual, fi-
nancial and technological power which has not been seen before since the 
evolution of modern capitalism. An elite structure is evolving on the basis 
of technological dominance, marginalizing those local societies and tech-
nological cultures which are not suitable or unable to follow their techno-
logic development trends. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
6  Hierarchical structures turn into networks – these issues will be discussed 
later when describing their sectoral and spatial impacts (See: Batten, 1995; 
Graham, 
1994). 
7 Representation 
democracy 
turns 
into participation democracy – quite often 
fears are expressed that the age of uninformed and under-informed society 
is coming because the majority of human society will be unable for orien-
tation in the quickly growing mass of information due to the absence of 
their selection abilities and on the basis of acquired information they can-
not make right decisions (Naisbitt, 1993). 
8  The emergence of self-aid and solidarity as a response to alienation – this 
will be a final result of rather contradictory processes. On the one hand, in 
general, the position of the poor and the old generation will worsen, spatial 
disparities will grow and there will be worse chances for equal living con-
ditions (Gershuny, 1987). On the other hand, the weakening force of geo-
graphical determination, the spread of new activities at the same time will 
reduce the existing disadvantages the spread of globalisation will counter-
balance regional disparities. 
9  The emergence of new (virtual) reality with a new (virtual) space in which 
a part of processes is going on – this will result in a fundamental transfor-
mation of time and space. This is simultaneous with the commercialisation 
of new and traditional mediums of cultures (such as the Internet since the 
early 90s!) (Graham – Marvin, 1996). 
10  A radical change is undergoing in values 3 – knowledge has of the greatest 
value (Knight, 1995). Not any knowledge but such as needed for a particu-
lar – sectoral or local – market segments, but this does not exclude the de-
valuation of several traditional – technical, cultural, ethnical elements of 
knowledge. 
1.2  The economic impacts of transformation into an information 
society 
A flexible, transformable kaleidoscope-type economy is being built. New eco-
nomic sectors are being shaped and very profound, sometimes fundamental 
changes are going on within the existing economic sectors as well. The develop-
ment of information sector is permanent, education, culture, knowledge, human 
resources, living standards, economy and their service areas are the strongest driv-
                                                      
Hamelink (1994) defines the major trends of transition from industrial into information age as fol-
lows: digitalisation, deregulation, concentration, globalisation, consolidation and the intensification 
of civil initiatives. 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
ing forces of growth. The information content of products in other sectors is also 
increasing.  
New corporate organisation models have been introduced that are based on the 
development of horizontal organisation and networked corporate structures 
(Nahrada, 1995). Within the corporate system priorities are given to the applica-
tion of computer technology and high-tech communication devices. Internal and 
external information networks are being built the automatization level of produc-
tion and office work is increasing.  
Virtual companies’ are being established and they are in a continuous transfor-
mation process. Due to these transformations only their original company trade-
mark will remain the same (Gerken, 1993). 
Sale systems are also in change. Consumer relations and the configuration of 
services to changing individual demands have an increasing importance. Not only 
export, the direct investments and presence of foreign capital but also the agree-
ments with local distributor systems are the key factors of the transformation proc-
ess (van der Knaap–Tortike, 1991). 
In countries of central location services, namely high-volume information ori-
ented services, the so-called information services, are the most rapidly developing 
sectors and a growing rate of employees are involved in the information sector. In 
semi-peripheral areas the industrial features of the economy remain strong, due to 
the increase of producer capacities transferred there from central locations. Here 
the transfer of local industrial capacities into less developed countries is not a gen-
eral phenomenon. Usually the number of decision centres does not increase, serv-
ices are rather organised on national level with less number of employees and 
weaker centre-forming force than in developed countries (Cséfalvay, 1999). 
The production organisation system is undergoing a reform at first in the new 
industrial sectors, then in the remaining sectors of economy. The earlier fordist and 
taylorist type mass production system is being replaced by small-scale just in time 
specialisation, which is much more tailored to the customers’ needs through the 
utilisation of the highest production, communication, storage and distribution 
methods and technologies (Fuá, 1993). 
The postfordist production system is characterised by a small number of direct 
employees, by the simplification of technology and by the segmentation of produc-
tion into small units, which can serve as a basis for deconcentrated location even in 
rural areas. The company seat may build a spatial network of economic relations 
around itself, which is elastic, flexible and not limited to traditional economic 
zones (Buijs–Pellenbarg, 1989). 
The average energy consumption per manufactured product and the volume of 
goods transportation are decreasing and the demands for storage and working 
capital are also getting lower but the demand for human capital is increasing. 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Monetary and real economic processes are getting more and more separated
The levels of management, control and financial market are getting independent 
from real manufacturing process (Naisbitt,  1992). This process started with the 
stock-market crisis in 1987, the scandals around cheap bonds, real estate and sec-
ondary bond transactions, and some speculations against some national currencies 
and economies (Mexico, Thailand, Argentina). 
Services, especially business services are undergoing a comprehensive mod-
ernisation process, which is simultaneous with the growing externalisation of these 
activities. The building of advanced information networks and the introduction of a 
wide-range telematic services are indispensable for the renewal of the whole sector 
(Charreyron-Perchet, 1990). 
Site selection criteria are in change now. Instead of traditional factors (natural 
and energy resources, the abundance of manpower) the elements of qualitative pro-
duction (accessibility, availability, information flow, specially trained labour force) 
with some non-economic factors (information oriented, creative environment, good 
living conditions, rich cultural life, large variety of recreational facilities, valuable 
built-in environment, positive local image) will enjoy priorities (Enyedi, 1996). 
The intensity and extent of these processes and impacts will be influenced by 
technical facilities, the degree of competition dependence, the quality of company 
site, the degree of urbanisation, the company’s marketing strategy, professional 
competence, financial situation, and by the users’ professional competence, readi-
ness and accommodation of innovation. All these emphasise the importance of in-
dividual and community attitudes towards innovation (de Castro et al1995).  
The exclusivity of national economic organisation model will disappear and the 
whole economy will stand on new spatial platforms. Globalisation, which at first 
covered only multinational firms expanding through acquisitions and purchasing 
property rights, will further expand (Erdősi, 1998). But now the strategic alliance 
of those companies will get into key positions that had built up an oligopolic mar-
ket structure in several economic sectors.4 With globalisation markets are becom-
ing fragmented (Barta, 1998). 
On the level of cross-national integration the expansion of free trade zones is 
the most significant phenomenon. However the European Union’s example has 
shown how decreasing of economic competitiveness enforces giving up national 
sovereignty in some areas and tightens the trends of integration. 
On subnational level districts and regions having strong inbound cohesion and 
identity will gain more and more autonomy in tackling their own economic prob-
                                                      
4 Extremely strong concentration is going on within the information sectors. For example in adver-
tisement markets in the field of sound carriers or in the world of news. The 20 largest communica-
tion firms have leading market positions at least in two important sectors enabling them to operate 
in perfect size. Through this structure they can eliminate their competitors, earn their R&D costs and 
cross-finance their activities. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
lems and development issues. The more homogenous spatial and social structure 
than national level will make the recognition of problems, the ranking of their im-
portance the decision-making on possible intervention, the effective application of 
available instruments easier. Micro-regions, the organisations of settlements of the 
same or similar rank and problems become more and more important spatial units 
of economy (Dumford–Kafkalas, 1992). 
1.3  The social and cultural challenges of the information age 
The impact of new technologies on social processes is not unambiguous. It was 
expected to eliminate the existing regional disparities or at least significantly re-
duce them through integrating marginal groups and reducing the dominance of 
vertical organisation models. The vision of ‘good technology’ solving all social 
problems without creating new ones was very popular during the 1980s. But at the 
same time the Rome Club Report (Microelectronics – Is It a Bless or a Nightmare, 
1984
) had already described the potential impacts of technology at the end of the 
1970s and the majority of its forecasts have come true5. 
During the transition period into the information age real economic processes 
are sharply polarised. The first gap is marked by the presence or absence of tech-
nologies
 and having or not having information on new technologies. The second 
gap is marked by differences in schooling, professional skills and special knowl-
edge
 (Csörgő, 2002). The third dimension of inequalities is related to the nature of 
work
 (creative or routine) to be done. Actually, these phenomena were described 
by  Castells (1989) in his analysis on the metropolitan features of ‘dualistic soci-
ety’
.  
Differences  are sharpening between managers and their subordinates. Al-
though the intensity of vertical separation seems to diminish, the steps between 
hierarchical levels are getting much higher. The chances of equal opportunities are 
decreasing
, favouring for the social adoption of the rich and the young, and disfa-
vouring for the old and the poor (Dillmann et al. 1998). 
The new technologies are changing traditional structures. They increase the top 
managers’ role and potentials in process controlling and decision-making but at the 
same time significantly limiting the middle-level management’s autonomy. As a 
result of automation a series of “blue collar” jobs are terminated, or fulfilled by 
high-trained expertise or unskilled workers (Gertler, 1993). As a result of decen-
                                                      
5 It is quite interesting that in the USA during the euphoria in the early nineties several neoliberal 
authors (Dyson, Keyworth, Gilder, Toffler) return back to the outdated schemes, speaking of the 
‘completion of American dream’ or ‘new frontiers of the information age’, attaching too much im-
portance to real processes and impacts. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
tralisation new groups are emerging in the labour market. Eight the spread of home 
working, the flexible forms of work open up new perspectives pregnant or child 
caring mothers and the disabled to work in full-time or part-time jobs. 
Economic changes may increase social disintegration, creating the feeling of 
alienation, loneliness and anarchy. This may generate an extremely strong group 
and place identifications (with landscape, micro-region, settlement, borough, 
neighbourhood) in return (Vámos, 1998). The increasing role of locality marks the 
importance of the bottom-up organisation of local communities, the initiative 
power and growing self-identity of an organic society (Stöhr,  1990). These com-
munities are capable to organise their own activities, to integrate their members to 
find sensible and useful jobs for themselves. They are capable to satisfy their own 
needs and to bring decisions on their future. The growing number of electronic ser-
vices, the ‘cash and carry’ slogan are all pointing towards a powerful trend of 
commercialisation, which has rather an adverse impact on the traditional values of 
culture, civilisation and ethics.  
The system of social values is in change. High priority is attached to elements of 
living conditions; high salaries, career promotion chances. There is a growing de-
mand for intensive and valuable leisure time activities, community and personal 
services (Jensen-Butler et al. 1997). 
Some elements of necessary spatial motions may be eliminated (daily, weekly 
commuting to work, school) but at the same time others motivated by different rea-
sons
 may show up (maintenance of personal relations, sports and recreation activi-
ties) (Erdősi, 1992). 
Due to the growing volume of information flow the traditional, geographically 
based social formations will slowly be transformed (Stehr, 2000). 
More efficient governance can be organised within the public administration 
system. ITTs will contribute to a more optimal utilisation of state property, to a 
more powerful use of the existing databases, to a more efficient management of 
affairs and the exercise of control over the rules of democracy. Theoretically ITTs 
may also create a basis for building up a comprehensive monitoring system through 
which the ruling political powers can exercise control over individuals or groups 
(The information society, 2000). 
The accessibility to various sources of information is the greatest advantage of 
ITTs that they can offer in the area of culture and education. Apart from the com-
munication with large systems the chances of gathering information at home are 
continuously improving. The provision of home electronics, the everyday e-gov-
ernment, e-administration through information networks and telework (Qvortrup, 
1992;  Handy–Mokhtarian,  1996) being done separately from traditional work-
places open up new perspectives for everyday life. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
1.4  Prognosticated impacts on spatial structure 
The spatial impact of the new ITTs is not unambiguous! They were potentially ex-
pected to increase the decentralisation of activities and to ease the traditional dis-
parities among spatial units. The major opportunities what ITTs are offering are as 
follows: closing up peripheries to national and international trends, reducing the 
distance between the centre and peripheries, the approach of the peripheries’ eco-
nomic, social and living standards indicators to the level of the most advanced re-
gions, the execution of restructuring programmes in industrial crisis regions6. 
(Erdősi, 1998). 
At the early stage of the diffusion of ITTs real processes enhanced the develop-
ment of cities and central places, which resulted in the sharpening of regional dis-
parities. Therefore a serious of theories stated that ITTs themselves are not capable 
to have a serious impact on the development of a territory or settlement. They can 
only accelerate or enhance the ongoing spatial processes (see: Castells, 1996–1997; 
Cas, 
1995; Campisi–Tesauro, 1995). 
More realistic forecasts prognosticate that at the present stage of diffusion urban 
agglomeration zones cannot be the major beneficiaries of decentralisation. A pow-
erful suburbanisation trend is manifested during the site selection of companies and 
institutions. Van der Knaap and Louter (1989) say that further peak points may be 
expected within the urban hierarchy. A horizontal structure will dominate on the 
top but going down towards the bottom all changes into a strongly fragmented 
system. It consists of not only one centre ruling over the whole structure but rather 
of some independent decision centres which together have an overall control over 
the whole settlement system. 
Medium-size cities are the other potential winners. Among them mainly those 
with important research-development (R&D) capacities, with strong higher educa-
tion system, with diversified industrial structure and with high level services. Ter 
Heide
 (1990) thinks the diffusion of ITTs in medium-size cities may generate sev-
eral positive processes. On the one hand, it contributes to a more intensive utiliza-
tion of urban centres, real estates, infrastructure networks and local labour force. 
On the other hand, core cities will have more power to supervise their region and to 
utilise its resources, which may stabilise the spatial formation of the whole con-
centration process. This concentration also involves the consolidation of inner city 
territories, the reform of architecture and functional regeneration (Longcore–Rees, 
1996). 
                                                      
6 According to Erdős (1990) the major trends are as follows: suburbanisation, i.e. microregional de-
centralisation; regional level mass migration; the centralisation of power, management and eco-
nomic activities in large cities; the decentralisation of operative activities; the sharpening of devel-
opment differences among agglomerations. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
On national and regional levels large cities may realise their competitive ad-
vantages resulting from a new technological-economical paradigm (Paquette, 
1992). The development of new methods and technologies in all cases will result in 
a reorientation of traditional specialization, in the devaluation of earlier competi-
tive advantages, in opening up new perspectives for new areas to join the ongoing 
processes and to turn their previously disadvantaged situation for a better one 
(Nagy, 2001). 
There is an increasing polarisation within the settlement network system and 
even within settlements themselves! The major frontlines are between metropolis-
village, core-periphery, city centre-residential area and central city-suburban zone. 
At the same time several tendencies bear the marks of decentralisation; such as the 
mixture of functions in residential areas, the spread of company seats and offices in 
suburban zones etc. (Gillespie, 1991; Graham–Aurigi, 1997). 
In spite of the ongoing decentralisation processes Gillespie and Goddard (1986) 
exclude the alternative of full spatial equalisation, because the spatial pattern of the 
availability of knowledge and information – the key resources of development – is 
not homogenous and market trends may even increase the spatial differences of 
development. Information economy – as they say – cannot be work more effi-
ciently than developed industry based economy because its key sectors have oli-
gopolic-type markets in which rivalry and hidden compromises exclude the ele-
ments of traditional competition. The new information and communication net-
works – in their present form – are in favour only of the biggest firms of the infor-
mation sector. 
None of the extreme models of settlement development has been proved by the 
practice. Neither large agglomeration systems have been dissolved nor the com-
puter based urbanisation period has arrived (Enyedi,  1988) even if some new or 
traditional centres have been developed through the coming ITTs and the utiliza-
tion of their potentials. Earth has neither changed into a global village as MacLu-
han
 had prognosticated nor into a global city (Jabbar, 1995) of “standardised and 
extended urban supermarkets
”  
The development of new networks is a slow and long-lasting process but its 
consequences on spatial structure can already be observed. The main streamlines of 
this process are marked by decreasing population in lagging cities and rapidly in-
creasing population in prospering cities, the lessening density of urban population, 
slowly restructuring urban spaces, a loose organisational coalition of cities (Tur-
nock–Nagy, 
1998).  
The major problem ITTs are facing in the performance of their regional devel-
opment function is not how to tackle technical problems but rather how to tackle 
social problems. By this we mean the transformation of social values, the changing 
of norms, the overcoming of institutional incompetence. While network develop-
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
ment is primarily a passive7, mostly a background-style process, ITT based serv-
ices have an active role in regional development (Nagy, 2001). 
2  Telecommunication infrastructure, networks, services 
2.1  The development of telecommunication and data transfer 
networks 
The historical past – role of telecommunication services 
The demand for the transmission of the most important information for everyday 
life from one community to other distant ones has already existed in the “early so-
cieties”. The information transfer technologies (starting from fire and smoke sig-
nals through electronic telegraphs, electromagnetic signallers, computer networks) 
were in a continuous development and they all contributed to the invention and 
development of the telecommunication, the most advanced technology for bridging 
large distances (Erdősi,  1992). At the present economic and social development 
stage the access to information and universal availability have vital importance in 
building up personal careers, localities and large spatial units (regions, countries, 
country groups). A country’s overall development, economic wellness, and re-
gional competitiveness largely depend – apart from economic, political, institu-
tional and human factors – on its telecommunication and data communication sys-
tems and networks. To understand the present situation and results and to illustrate 
the dynamism of development we should overview what has resulted the ongoing 
processes of Hungarian telecommunication since the changes political and eco-
nomic changes during the past few decades. 
The legacy of Hungarian telecommunication  
Hungarian telecommunication was in the leading edge of the European telecom-
munication at the end of the 19th century. The Hungarian Post Company, the super-
visor of telecommunication devices implemented West European technology quite 
soon after its appearance. Several Hungarian technical devices and implementa-
tions (telephone exchange centres, international telegraph connections, under-
ground cables, radio telegraphs) were in the “mainstream” of the development of 
                                                      
7 The term ‘enabling’ technology is used for ITTs generally in this sense. 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
European telecommunication technology. The First World War, its following 
Trianon Peace Treaty, the political atmosphere and the economic crisis around 
them resulted a shortage of financial resources in the telecommunication sector as 
well, and this strongly hindered the development and the implementation of the 
latest technologies in Hungary. Therefore, there was a large development gap be-
tween Hungary and Western Europe within the telecommunication sector. Between 
1945 and the early 1950s the level of expert knowledge and the relatively modern 
technology made possible to stabilise the quality of telecommunication infrastruc-
ture on the level of the previous periods (Lajtha–Smideg, 1994). But later on finan-
cial resources were so weak that they were hardly enough to keep the whole tele-
communication sector alive. This situation was the result of the scarcity of money, 
and the priorities of the national economic policy of that time (the forced develop-
ment of heavy industry). During the 1950s and 1960s telecommunication was char-
acterised by quantitative shortages, the absence of maintenance and development 
and modernisation, which is very well illustrated by low investments into the tele-
communication sector in the percentage rate of the GDP (Table 5)
Table 5 
The comparison of GDP with telecommunication investments 
(running costs, in million HUF) 
Year 
Gross Domestic product 
Telecommunication 
Investments in percentage 
(GDP) 
investments 
of the GDP 
1960 186,395 
183 
0.10 
1965 231,443 
371 
0.16 
1970 332,548 
993 
0.30 
1975 482,700 
1,754 
0.36 
1980 721,031 
2,469 
0.34 
1985 1,033,658 
4,724 
0.46 
1990 2,080,900 
13,335 
0.64 
Source: Statistical Yearbook 1991. Hungarian Telecom Service. 
At the end of the 1960s the extremely poor condition of the Hungarian tele-
communication system was a dangerous threat for turning out the economy from its 
normal running process. The government – in the spirit of the coming reforms in 
the economic regulation system – introduced several measures to modernise the 
telecommunication system. Modernisation was started with the import of Ericson 
model high frequency carriers and crossbar exchange centres in 1968 to replace 
those old Rotary devices that had been in use for more than thirty years. The manu-
facturing license of these crossbar exchange centres was also purchased from the 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Swedish Ericson Company. The acquisition of the manufacturing license for small 
coax cables for wired telecommunication was a great step towards the development 
of network. All these significantly improved inter-urban networking. However this 
dynamic development was soon halted because during the 1970s the acquisition of 
licenses and the co-operation with Ericson were terminated. As a result of this, in 
1985 the Hungarian telecommunication network was standing on the technology of 
the 1960s (Lajtha–Smideg,  1994). Hungary was significantly lagging behind the 
international standards (Table 6)
Table 6 
The number of fixed telephone stations in some European countries 
Country 
Number of fixed  telephone stations per 100 persons (telephones) 
 
1975 1980 1985 1988 
Austria 
28.13 40.11 49.22 54.34 
Belgium 
28.51 36.87 44.01 49.87 
Czech and Slovak Republic 
17.61 
20.61 
23.14 
25.47 
Denmark 
45.36 64.10 78.31 88.22 
Greece 
22.13 28.88 37.40 43.05 
The 
Netherlands 
36.75 51.78 60.47 65.86 
Poland 7.54 
9.48 
11.29 
12.78 
Hungary 
9.91 11.77 13.95 15.81 
Germany 
31.70 46.43 62.11 68.22 
Italy 
25.88 33.72 44.76 50.93 
Portugal 
11.29 13.81 18.04 21.91 
Switzerland 
61.33 72.23 83.19 88.16 
Sweden 60.07 
79.60 
62.72* 
66.21* 
*Main station density indicator. 
 
Source: Statistical Yearbook 1991. Hungarian Telecom Service. 
As the funding of telecommunication was very low, significant differentiation 
was planned among social groups, settlement groups and provisions, thus the den-
sity of telephone stations also showed large spatial and inter-settlement differences 
within Hungary itself8 (Table 7) (Nagy, 1995). 
                                                      
8 Among settlements, size, industrialisation level, transportation importance were the major dif-
ferentiating factors, while within settlements institutional centres and residential areas had priorities 
in provision. In social dimension income was the most important factor, and this, depending on the 
type of settlement, was favouring for the richest. Within the development concept of telecommuni-
cation priority was given to meeting quality demands (Nagy, 1995). 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
By the mid–1980s the Hungarian telecommunication was lagging behind inter-
national standards by 25–30 years. On the basis of this recognition the government 
gave high priority to the development of the telecommunication sector (Heller–
Nádasdi, 
1990). An active development and market assessment programme started 
for the digitalisation of data transfer channels and large sums were spent on the 
development and installation of home-manufactured telecommunication devices.9
Table 7 
The density of telephone stations by counties 
County 
Number of telephone stations per 100 person 
1975 1980 1985 1988 
Baranya 
8.6 10.5 13.1 15.4 
Bács-Kiskun 
4.4 5.5 7.9 10.2 
Békés 
3.8 4.9 7.2 9.0 
Borsod-Abaúj-Zemplén 6.8 
8.4 
11.2 
12.9 
Csongrád 6.5 
8.5 
10.7 
14.1 
Fejér 
6.0 6.6 7.6 8.5 
Győr-Moson-Sopron 7.1 
9.7 
12.5 
14.1 
Hajdú-Bihar 
4.9 6.8 8.8 10.9 
Heves 
5.6 7.9 9.7 12.1 
Komárom-Esztergom 
5.9 7.8 9.4 12.2 
Nógrád 
5.1 6.9 8.9 10.0 
Pest 
5.3 4.2 5.2 6.0 
Somogy 
5.7 7.0 8.7 10.8 
Szabolcs-Szatmár-Bereg 
3.0 3.8 4.9 6.0 
Jász-Nagykun-Szolnok 
4.3 5.1 6.5 7.6 
Tolna 
4.5 6.5 9.3 10.4 
Vas 
5.8 7.2 8.9 10.3 
Veszprém 6.6 
8.4 
10.3 
12.2 
Zala 
6.0 7.9 9.8 10.7 
Counties total 
5.4 
6.8 
8.72 
10.4 
Budapest 28.7 
32.6 
35.48 
37.5 
Total 9.9 
11.8 
13.95 
15.8 
Source: Statistical Yearbook 1991. Hungarian Telecom Service. 
                                                      
9 Since the mid–1980s there has been a rapid growth in telecommunication investments in Hungary. 
The volume of investments into the telecommunication sector in percentage of the gross volume of 
total investments was 3.5% which is significant even by West European standards. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
New development trends following the change of regime 
On 31st December the Hungarian Post Company was split into three sections. A 
separate postal, a broadcasting and a telecommunication company were established 
and this gave a start to the restructuring of the information sector. In December 
1991 the Hungarian Telecom Company (MATÁV Rt.) as the legal successor of the 
previous telecommunication company was established fully remaining in state 
hands. The initial economic position of the monopolistic company was weak. Al-
though some data transfer networks existed in Hungary since the second half of the 
1980s their large-scale development was not completed. Hungary’s underdevel-
oped telecommunication and data communication infrastructure may be illustrated 
by the fact that during the early 1990s the majority of inter-settlement communica-
tion – and local – communication networks were made of low capacity copper 
wires. The majority of exchange centres were analogue systems but in some vil-
lages they were manually operated. The number of digital exchange centres, the 
most essential components of advanced communication was very low at that time. 
46% of telephone subscribers were living in Budapest and only 5% were village 
citizens. New subscribers had to wait 6–13 years until connecting them to the sys-
tem (Pártos, 1990). 
This was the situation when MATÁV launched its three-year very ambitious 
development programme in 1991 with the following objectives: 
•  The installation of a broadband digital, optical and microwave backbone sys-
tem connecting Hungary’s 54 key telecommunication nodes. (As it was 
planned, the 3400 kilometre long 560 kbit/s bandwith optical network – as 
the basic structure of the Hungarian backbone system – was completed by 
1993 (Figure 1)
•  The qualitative and quantitative improvement of services by using digital ex-
change centres (with the elimination of COCOM embargo the first digital ex-
change was installed in Hungary in 1989. The spread of digital phone ex-
change centres made possible to increase the number of subscribers by 50% 
and to significantly improve the quality of services between 1991 and 1993. 
•  The installation of a high-capacity packet switch centre to provide and im-
prove computer and data transfer services (packet switch centres were neces-
sary for rendering telecommunication and data communication services (vid-
eotext, teletext etc.). 
•  The enhancement of international connections (for this purpose a link was es-
tablished to the Intelsat Satellite telecommunication system and VSAT ser-
vices were extended). 
The MATÁV’s three-year backbone development program was successfully ac-
complished though during the running of this programme it became clear that the 
absence of significant capital would make the continuation of the optical backbone  
26   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 1 
 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
programme and the further development of services impossible. The partial privati-
sation (selling 30.2% of shares) provided additional funding sources for the com-
pany10 being in the midst of its large-scale investment programmes. In addition to 
this privatisation the XVI/1991 Act on Concessions and the LXXII/1992 Act (Tele-
communication Act
11) enabled MATÁV to form a concession for providing inter-
urban, international and in 29 primary telecommunication districts local telecom-
munication services. In September 1993 a tender was announced for rendering lo-
cal cable telephone services in another 25 primary districts. As a result, MATÁV 
won service provider rights in another 10 districts, while in the remaining 15 pri-
mary districts 12 local telecommunication concessions (LTOs) were authorised for 
providing telecom services.12 The present situation, the concession territories and 
their service providers are shown on the Concession Map (Figure 2 – Annex)
Concession tenders were announced in mobile and pager services as well, and 
the winners launched their services in 1994–1995. In mobile business beyond 
Westel, Radio Telephone Company having been providing analogue services on 
450 MHz frequency since 1990, two new GSM providers (Westel900 GSM and 
Pannon GSM companies) and two new pager service providers (Eurohívó Co., 
Easy Call Co.) started their activities.13  
This was the time when the building of network and its qualitative improvement 
started at an accelerated speed. Manual switchboards and analogue exchange cen-
tres were transformed into digital ones and also some new exchange centres were 
built. Concession-bound telecommunication companies quickly started the building 
and modernisation of their telecommunication and data communication networks.14 
At the first stage of development the increase of the volume of subscribers was the 
                                                      
10 The Hungarian government paid 400 million USD to MATÁV from the purchase incomes of 
MagyarCom. The company used it for the restructuring of its corporate structure, for the further 
development of its telecommunication network, for the establishment of seller’s market and for the 
enhancement of its value added services. 
11 The Telecommunication Act stipulates that certain telecommunication services (public fixed phone, 
public mobile phone, public pager services, national, regional, radio and television broadcasting 
and programme distribution services) should be performed in the corporate form of concession. The 
Concession Act stipulates that concession-obligated activities (services) may only be performed 
within such agreements only that provide limited competition chances or may be rendered by the 
state or majority state shared companies having been established specially for these purposes.  
12 Due the corporate fusions of the past few years the ownership structure has significantly changed. 
New sevice providers emerged in some primary districts (e.g. the fusion of Digitel 2002 and Déltáv 
companies resulted V-Fon Rt. a subpart of the Vivendi Group). 
13 Today there is only one personal pager service provider in Hungary, as Easy Call merged into 
Eurohívó Rt. in 1999). 
14 Rapid development was motivated on the one hand by the conditions of concession agreements, on 
the other hand the growing demands of potential users (academic, education, public sectors, home 
business companies, multinational firms, public administration etc.) 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
major plan, which motivated them in building their end user networks15 at an in-
creased speed. Internet and data communication services (in most cases) were pro-
vided through a simple dial-up, X.25 or low speed leased-line networks. 
Since 1997 the strategy of development has changed. This is explained by two 
major reasons. On the one hand, companies had to calculate on liberalisation start-
ing in the year of 2002 in their long-term strategies, on the other hand due to the 
disappearing long waiting list of new subscribers, the period of large-scale plug-
ging in new subscribers had gone. Naturally, the change in strategy was also the 
consequence of a dynamic development of data transfer and business communica-
tion sectors. To achieve a qualitative development in telecommunication the atten-
tion shifted towards creating better network facilities (greater capacities, better data 
transfer, SDH, ATM technologies, greater network security). More and more tele-
communication nodes were equipped with digital exchange centres This resulted an 
increase in the share of digital centres from the level of 62% in 1996 to 92% at the 
end of year 2000 (Nagy, 2000b). 
The modernisation and expansion of the existing telecommunication backbone 
system and local networks further continued16. As a result of these developments 
MATÁV, the largest concession-bound service provider became the proprietor of 
two high-tech international switchboard centres and an optical network equipped 
with SDH (Synchronised Digital Hierarchy)-based transfer technology crossing 
state borders at 11 transfer points. For providing a wider choice of communication 
transfer optical communication facilities were further extended by digital micro-
wave communication services and an earth satellite station. 
Beyond technical modernisation MATÁV has made several organisational and 
strategic decisions. The traditional subscribers’ network was transformed into ac-
cess network and with a more intensive marketing campaign they introduced sev-
eral market-oriented products and services to increase their customers’ orientation. 
In these years the improvement of business services the customisation of services 
for large subscribers seemed to be a second alternative. To become the largest tele-
communication service provider over East Central-Europe was the third strategic 
objective of MATÁV, which was achieved by winning the MAK-TEL tender and 
through completing some projects in the whole regions’ telecommunication devel-
opment programme. The co-operation with strategic partners and fair competitors  
was the fourth and building stronger cohesion among the heterogeneous corporate 
structure of MATÁV was the fifth objective (the integration of the two WESTEL  
                                                      
15 The concession structured telephone companies installed nearly 1 million of new telephone stations 
between 1994 and 1996. Thus, 2,651,000 main telephone lines had been statistically registered by 
the end of 1996. 
16 In year 2000 MATÁV had some 4000 km while other LTOs had 6000 kms fibre optical cable net-
work. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
companies into MATÁV was the most significant result achieved in this field). 
Apart from concession-bound telephone companies – since the Telecommunication 
Act of 1992 – the alternative telecommunication companies – through entering into 
the free segments of the telecommunication market – are also preparing for the 
liberalisation of telecommunication with a comprehensive development of their 
own networks. Antenna Hungaria Company has built a microwave network 
connecting 51 nodes and also became the proprietor of a 170 km fibre optical net-
work in Budapest with another 1300 km fibre optical network having built together 
with Hungarian Electricity Company. GTS Hungary Ltd has built a 120 km fibre 
optical network in Budapest, a microwave network connecting more than 60 cities 
and the company has also been the proprietor of a satellite network system since 
1993. The Novacom Telecommunication Company, by using the telecommunica-
tion network of Elmü and Émász electricity providers, has an 1100 km optical 
backbone system and also has developed a technology to transfer telecommunica-
tion signals to households through the electricity power circuit system.17 Pantel Rt 
has laid down an optical cable network along the Hungarian railway lines in a total 
length of 3200 km. This practically covers the whole territory of Hungary. During 
the last few years there was a significant development in the building of interna-
tional network connections, which has enabled the biggest alternative telecommu-
nication companies to maintain connections with several countries through their 
own network. 
Until liberalisation telecom companies were concentrating on value added ser-
vices and a more intensive marketing but some of them emerged in the cable tele-
vision service market (Monortel, Jásztel).18 Following a quantitative development 
the concentration of service providers was expected, as the majority of companies 
needed bank loans to finance their intensive developments and in the late 1990s the 
quick spread of mobile services significantly reduced investment return rates. Sev-
eral companies (Déltáv, Emitel, Hungarotel) have won spatially contiguous service 
provision areas while others (UTI) tried to integrate and coordinate their activities 
in spatially separated service regions. The concentration and the restructuring of 
proprietory structure resulted the integration of Jásztel into the Vivendi group and 
the proprietary change of Monortel (the new proprietorship was won by UPC a very 
                                                      
17 PLC (Powerline Communication) network is planned for 2 Mbit/s speed capacity, which is 20 
times faster than the present ISDN. As it needs no additional infrastructure and its maintenance is 
cheaper than the traditional phone cables, telecommunication experts see bright perspectives in this 
technology. 
18 The importance of cable television networks in data communication – since the emergence of the 
first multiple node networks being capable for bi-directional (duplex) communication – is in a con-
tinuous growth. This technology is now available in 60–70 per cent of those 1.5 million households 
that are connected to the network. This coverage is expected to grow to nearly 100 per cent within 
the next few years. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
active participant on the Hungarian cable television service market). MATÁV has 
acquired the shares of Emitel an Israeli-owned company (with the exclusive service 
provision license in three contiguous districts within Bács-Kiskun county), while 
the radically expanding Vivendi won service provision license for the districts of 
UTI, because UTI is struggling with financial problems.19
Finally, in the formally (23 December 2001) and practically (22 January 2002) 
liberalised telecommunication market five companies won their four-digit call sign 
(which actually stands for four companies/consortia). This enabled them to enter 
the market (V-Fon, V-Com, E-Tel, Pantel Novacon). Of them only E-Tel, majored 
by Irish proprietors is new in the Hungarian market but it has wide experiences in 
the problems and strategies of entering into competition. As in West Europe, com-
petition is present only in some partial segments of the market (for getting large 
business customers) and only in some concentrated markets (Budapest, large Hun-
garian cities). From this aspect the British market has several examples but real 
competition has been going on only in business communication and concentrated 
urban markets while the development of peripheral areas is significantly lagging 
behind them. 
Concluding remarks 
The transformation of centrally planned state socialism into a market economy 
brought fundamental changes for telecommunication services. Before the change of 
the regime Hungary had a poor telecommunication system lagging behind modern 
technologies by 25–30 years with an average 6–15 years waiting period for new 
telephone subscribers and only local telephone exchange centres operating on low 
level technology. After ten years we are experiencing disappearing waiting lists, 
ISDN, xDSL technologies, high network culture, Internet-based communication 
facilities and a wide range of applications. The technical parameters of networks 
and the applied network technologies – as a result of a ten-year development – are 
now approaching the European standards. This was very advantageous for provid-
ing telecommunication and information services for Hungarian users. 
Due to the intensive development of the telephone network now we can see a 
sellers’ market in voice communication services, which can be further expanded by 
the liberalisation of telecommunication. However in data communication – despite 
intensive development efforts – the building and operation philosophy of data 
transfer systems grant just zero profitability. For this reason they have an excluding 
character. Advanced data communication services are available mainly in districts 
                                                      
19 This company entered into competition by signing an agreement with the local governments of 
Pécs and Székesfehérvár on building another telecommunication network to be rivalling with the 
existing local service provider. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
with digital exchange centres. However the low population, the low number of 
business organisations, and the low level of user demands bring about large spatial 
differences in the availability of digital networks. Even now there are some pri-
mary districts with lower than 70 per cent of digital exchange centres, one of the 
most essential components of advanced information technology (Nagy, 2000b). 
The building of technical/technological networks – especially now, at the brink 
of the Information Society – is (or may be) a differentiating factor in regional com-
petition. We should never forget this, even if technical achievements, scientific re-
search, technical innovations (GPRS, VMTS, ADSL, WLL, PLC) and a well-
organised development policy may enhance them and the direction and intensity of 
spatial differentiation may significantly be modified by regional policy. 
2.2 Telecommunication and data transfer technologies 
Fixed telephony 
After the change of the regime a special development programme was launched to 
develop telecommunication systems and to improve telephone station supply, in 
the hope of closing up Hungary to the European development of telecommunica-
tion technology. These efforts resulted in more than 10,000 km of fibre optical ca-
ble backbone system within ten years. Telecommunication, data transfer and tele-
graph services were modernised and the volume of international connections also 
increased. To raise the quality of network among LTOs the system of MATÁV was 
linked through X.25 network with 83 other network systems and through ISDN 
with another 40 countries.20
The capacity of digital exchange centres, one of the most critical technical pa-
rameters of advanced data and telecommunication services, increased to a 260-fold 
value of the earlier one in 1989. Between 1990 and 2001 the number of telephone 
stations increased by 380 per cent, reaching the volume of 3.75 million at the end 
of period. In the first four years the growth rate was 50 per cent only but as a result 
of a quickened development programme after the partial privatisation of MATÁV, 
the only national level service provider, the number of new subscriptions almost 
doubled in three years. After node districts had started to operate in concession-
bound structure – as stipulated by the Telecommunication Act – a “sellers’ market” 
was shaping up in the whole territory of Hungary. Since that time fixed telephony 
has been stagnating but a qualitative restructuring is making its way through the 
                                                      
20 International connectivity is provided by joining to the global European Network (GEN), which is a 
high capacity integrated network management system that provides access to international leased 
lines. 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
existing system. This process is marked by a rapid increase of ISDN lines (it was 
almost ten per cent of the total in the middle of year 2001), the fast spread of 
ADSL lines (this may be explained by their cheapness) and the rapid growth of 
digitalisation. In 2000 the average of telephone supply was 36.8% on national 
level, 50% in Budapest and even exceeded 30% even in rural areas. 
Concerning telephone supply indicators the ranking order of counties has also 
changed during the past ten years. Industrial counties, having had good positions 
before the 1990s, lost their advantages. On the other side, the Budapest agglomera-
tion with the winner regions of restructuring is taking now far better positions than 
ten years before (Nagy, 2000a). 
The counties of the Hungarian Plain – with the exception of Csongrád – were in 
a disadvantaged position regarding the quantitative indicators of telephone supply. 
The lower income of residents, the lower telecommunication culture resulted in 
lower social acceptance, which is clearly marked by a relatively lower penetration 
level. Though the speed of development there is not falling behind the national av-
erage, it neither eliminates the inherited disadvantages. 
In the year of the privatisation of MATÁV before signing concession agree-
ments the value of micro-regional telephone supply difference index was 12 be-
tween Balatonfüred being in the best and Monor in the worst telephony situation. 
This is well illustrated by the fact that within 26 micro-regions the number of lines 
per one thousand head was below 50. Four of these micro-regions were inside Pest 
county, just in the proximity of Budapest, the capital city, 13 were in Transdanubia 
(of them 11 in Western and Central Transdanubia, the most advanced regions of 
economic restructuring). However the number of micro-regions with more than 
200 main telephone lines per one thousand head was only eight. At that time apart 
from Budapest the eastern basin of Lake Balaton, the cities of Sopron, Pécs in the 
Transdanubian region, Miskolc and Tiszaújváros, the central places of the North 
Hungarian industrial district, and Szeged the institutional, economic and transpor-
tation centre of the Hungarian Plain had the best telephony indicators (Figure 3)
By 1998, the year of shaping up the sellers’ market, the spatial structure of te-
lephony has changed. The growth in the number of main telephone lines may be 
demonstrated by the fact that today only 12 Hungarian micro-regions have worse 
than 200 per one thousand head indicators. With the exception of two micro-
regions (Sellye and Mórahalom) these weakly supplied areas are concentrated 
within one spatial unit covering the northern part of Borsod-Abaúj-Zemplén and 
some parts of Szabolcs-Szatmár-Bereg counties. There has been a similar 
fundamental restructuring within the group of micro-regions with advanced 
telephony situation. Of the total 18 micro-regions belonging to this category, only 
one is situated in the Hungarian Plain (it’s Szeged again), one is in the North-
Hungarian region (Eger) and the others are within the greater Budapest 
agglomeration, at Lake Balaton, or attached to one of the dynamically developing  
 
33 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 3 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
cities in Transdanubia. It was Balatonfüred again produced the greatest density of 
fixed telephone network with an indicator of 510 phone lines per one thousand 
head but the difference index between the first and the 150th micro region in the 
ranking list (Baktalórántháza) is only 3 now (Nagy, 2000a). 
Comparing year 1998 with the millennium the situation did not change radi-
cally. The best micro-regions are still around Budapest, Lake Balaton, and Lake 
Velence and the spatial spatial structure of the weakest micro regions also re-
mained almost the same. The difference index between the greatest line density 
(Balatonfüred) and the smallest line density (Mórahalom) micro-regions has de-
creased to a value of 2.5. Today Hungary has no micro-regions with below 200 per 
one thousand head telephone lines but only one micro-region is producing a more 
than 50 per cent penetration indicator (Figure 4). 
It is clearly seen now, that the agglomeration zone around Budapest and Lake 
Balaton are the winners of telecommunication development. Only some specific – 
considered only in Hungarian dimensions as – large cities are suitable for the 
adoption and implementation of advanced telecommunication culture. At the same 
time it seems the most likely that in several micro-regions in the northern and east-
ern areas of Hungary these radical and revolutionary telecommunication changes 
will have only a moderate impact on their development because neither a solvent 
demand nor a critical mass of potential users are present for the implementation of 
advanced communication services for business and public purposes.  
The dispersion diagram of national-level telephone supply showed a rather high 
value of 0.414 in 1990 and was only a bit lower in 1993–94 but due to the increas-
ing amount of telecommunication investments it dropped below 0.124, which is 
fairly a good value. The fall off of the dispersion indicator is a clear sign of the dis-
appearing dichotomy between Budapest and the remaining parts of Hungary within 
the telecommunication sector. Until 1995 the dispersion excluding Budapest was 
stagnating on a relatively low level (0.18–0.19) and dropped below half of the ini-
tial value within the next three years. Although the absolute value of decrease was 
behind the national average, the dispersion indicator of territories outside Budapest 
is still showing a strong spatial equalisation process (Regional-level dispersion in-
dicators are lower than county-level indicators). 
Meanwhile there has been an intensive levelling process in the technical and 
technological development process. Today every Hungarian region is ready for the 
implementation of various forms and channels of telecommunication, the present 
technical development of network and the existing availability of capacities are not 
limiting the chances of economic and social development. The low level of per-
sonal incomes is the only bottleneck of accessing information but now it is only a 
hope yet that liberalisation will bring success for this sector as well (Nagy, 2000a). 
 
35 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 4 
36   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Mobile communication 
Hungary was the first country in East Central Europe to have mobile communica-
tion sector
 after the introduction of the NMT system at MATÁV and USWest. Al-
though this service had some history in Hungary (just think of CB radio system 
having been used for ten years) the massive expansion of this system through the 
whole country, the miniaturisation and cheapening of cellular phones, the widening 
choice of network services all were pointing towards a new stage of qualitative de-
velopment in Hungarian mobile telecommunication. The dynamic development of 
the NMT network was not halted by the newcomer GSM providers but even in-
creased and the number of NMT subscribers approached 100,000 by year 2000. 
The vitality of NMT networks was based on that technical modernisation’s that 
made possible the introduction of such services (SMS, VoIP-based phoning, mo-
bile Internet) that were earlier available only through GSM networks. Although the 
absence of roaming services is a spatial limitation in 450Mhz communication, the 
continuity of technical modernisation guarantees long-term viability for the system.  
With the two GSM companies having been established in 1994, by the end of 
1996 the number of service providers with the full area coverage of Hungary had 
been selling their best entry offers, cellular phones and services21 increased to 
three. By the end of 1998 the potential full capacity of these three networks had 
reached the volume of two million, which was doubled by year 2000 but the speed 
and intensity of network development is still continuing, as the number of sub-
scribers is growing exponentially. It was 17 thousand at the end of 1993, 55 thou-
sand in 1994, 270 thousand in 1995, 480 thousand in 1996 and 670 thousand at the 
end of year 1997. 1998 was a special year from this point as this was the first time 
when the number of subscribers exceeded the volume of one million and mobile 
service coverage was 10% within the total population. By the end of 1999 the vol-
ume of subscribers increased to 1.67 million, of which 100 thousand were NMT 
subscribers. In that year Vodafone could collect only 20 thousand new subscribers 
within its first two months of operation. The growth of new subscribers continued 
on the same intensity, by the end of year 2000 the total number of subscribers in-
creased to 3 million and it was 5 million by the end of year 2001. This resulted 
30% provision and 50% penetration index. But the collection of new subscribers 
cannot be maintained at the present pace. According to estimations the number of 
new subscribers will increase only during the next 12–18 months, then competitors 
will concentrate on the redistribution and maintenance of their existing customers. 
Development was based on the rapid development of networks, on the continu-
ity of technical modernisations and on the extension of communication frequency 
bands. This is illustrated by the fact that starting from one switchboard centre 
                                                      
21 The trilateral tender for DCS 1800 Mhz system was announced in 1999 and was won by Vodafone 
(V.R.A.M.) against the other two GSM service providers. 
 
37 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Westel is now operating 15, and Pannon 10 centres. Both companies had achieved 
national coverage by the end of year 1996 but the growing number of subscribers 
and the increasing demand for advanced services require continuity in opening new 
cells, i.e. building new base stations. Both companies had installed several thou-
sands base stations by the end of year 2000. Local protest demonstrations against 
the building of these stations were held only in a few cases (in the organisation of 
local green organisations). Vodafone, having started in the Hungarian market far 
later than its competitors and having been authorised for the use of its two com-
petitors for a definite period, is rapidly developing its own network. Through this 
development now 95% of Vodafone subscribers can communicate through Voda-
fone’s own internal network. 
The further development of intelligent network is guaranteed by the introduc-
tion of GPRS systems (it was first accessible on national level through the Pan-
non’s network) and by winning the concession for rendering services on 1800 MHz 
frequency. WAP service, having been advertised at large costs as an access to mo-
bile Internet, was a technical “failure”, because its low speed (14.4 kbit/s) made 
impossible to use it as an alternative of low-speed modem connections. The three 
GSM competitors so far have invested nearly 1 billion USD each into the devel-
opment of mobile communication system, which resulted in a modern, technically 
up to date network meeting the highest European standards. 
There are several milestones in the ten-year development of the Hungarian tele-
communication system. They are marked by the start in 1990, the two concessions 
(having been licensed for 15 years), the DCS 1800 Mhz tenders (in the autumn of 
year 1999) and the passing of Telecommunication Act(s). The exceed of the 10% 
level of service coverage was the first significant result, and this was followed by 
25% in September 2000 and completed by 50% at the turn of years 2001/2002. As 
it is seen, the introduction of “pre-paid” card system, to facilitate the migration of 
users from one service provider to the other, was a necessity for the mass distribu-
tion of cellular phones. While the share of these constructions is 66% in Westel and 
Pannon, it is over 90% in Vodafone (though their presence rate among the new 
subscribers for the other two networks shows similarity). This means that pricing 
and customisation will have an increasing role in the formation of subscription 
categories.  
The widening palette of services is one of the key elements of the increasing 
popularity of GSM services. It is quite interesting that the speed of the introduction 
of services had no serious impacts on popularity (it may be explained by the com-
petitors’ quick follow-up in providing similar services). Roaming the availability of 
the service providers’ facilities outside Hungary is a great advantage of the GSM 
system. In this area – according to our latest information – Westel has gone further 
than its competitors by signing an agreement with 200 service providers from 87 
countries. At the end of year 2000 147 service providers in 69 countries were 
38   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
available through Pannon and 157 service providers in 77 countries were available 
through Vodafone’s roaming facilities.  
The spread of cellular phones showed a strong spatial hierarchy until their mass 
utilisation (2000–2001). Their fast spread was not followed by a levelling of user 
categories. The use of cellular phones for business was the most typical in Buda-
pest (some 50%) and in the largest cities (20–25%). In settlements of lower impor-
tance the spread of cellular phones was largely depending on local economic de-
velopment and personal incomes. The full territorial coverage of fixed telephone 
system put an end to the necessity of cellular phones to use as an alternative but 
they may applied as a second telephone just like as they are used in Scandinavian 
countries since the second third of the 1990s. 
VSAT services 
VSAT services have undergone a spectacular development within the data transfer 
sector. The four competitor companies were servicing for more than 1000 terminals 
at the end of 1996 and their service coverage included some East Central European 
regions as well. As a result of development Budapest has become the information 
hub of the greater region. Easy installation, portability and moderate operation 
costs are the greatest advantages of the VSAT system. A single central HUB sta-
tion may establish and maintain point to multi-point connection with several thou-
sand terminals. Time-divided multiple access (TDMA), operation makes the op-
eration of the system very economical. 
The majority of multiple site firms did not by accident select the satellite-based 
data communication system for their internal data exchange. The system enables 
company seats to monitor their affiliate’s activities and intervene as needed. The 
Montana, MATÁVNet, Banknet, GTS-Hungary and Hungaro DigiTel are the five 
flagships of this sector. The activity scope of these firms covered the whole terri-
tory of Europe from London to Moscow. As it is seen from the activities of these 
reference companies, the number of targeted sectors and companies has increased 
since the previous years. Besides banking-insurance, retail and wholesale trade, 
they are interested in Stock exchange information, the servicing of public admini-
stration, the management of energy systems, transportation companies, and Hun-
garian manufacturing firms (Pick, Villeroy&Boch, MOL) and also have custom-
ersts from such sectors as computer industry, office technology and information 
service. 
These systems are customised to the users’ profile by three main categories: 
•  mono-directional (simplex) data broadcasting systems: news agency applica-
tions, stock market information, weather report broadcast, software remote 
maintenance etc.; 
 
39 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
•  data collection systems: warehouse stock reports, sales traffic collection, re-
mote sensing data processing (electricity supply, oil and gas pipes, railway 
and seismologic observation points, meteorology stations, protection against 
flood); 
•  bi-directional (duplex) systems: banking applications, machine transactions, 
(bank card payment methods, POS terminals, ATM machines) online stock 
exchange transactions, in-advance booking (commercial networks, depart-
ment store networks, public administration, health service). 
Hungarian VSAT services are not only suitable for national level data commu-
nication but also for intercommunication with regional development institutions 
and agents as their security level is higher than 99.5% and their data transfer speed 
is high (minimum 2 Mbit/s). 
Cable television networks 
Until 1987 the decentralisation of Hungary from mass media aspects was very 
weak because all sectors of mass media were centralised. Even deconcentration 
was going on in a centralised way, which may be well demonstrated by the system 
of regional radio and TV studios and their districts. However, this institutional 
structure was a good starting point to the real deconcentration having started with 
the change of the regime. 
Every year or two years there were large fluctuations in the survey data of cable 
television networks, which is an explanation why time series data are hardly rec-
ommended for use, as the annual change in the data of wired homes and cable TV 
subscribers exceeds the value of one hundred thousand.22
The number of wired TV households increased from 360 thousand in 1990 to 
1.6 million in 2000. This means that during this period two from every five house-
holds joined the CATV system. The number of subscribers is a little bit smaller but 
the difference between the two figures is tending to decrease showing that at those 
places where this facility is available CATV services are generally subscribed. The 
technical parameters of CATV networks have significantly improved due to the 
increasing sum of investments. While in 1997–98 3–3.5 billion HUF was invested 
into CATV network development, this figure went up to 15 billion in 1999 and 28 
billion in 2000. This increased the asset value of CATV networks from the value of 
8.1 billion HUF in 1997 to 46.3 billion in 2000. This is an indicator of a giant tech-
nological development, which was generated by the change of the regulatory envi-
                                                      
22 Statistics provides no qualitative information on cable TV networks, even such simple parameters 
as the percentage of multiple-node networks and/or the percentage of bi-directional (duplex) data 
communication networks. These values are available only from the annual reports of the Hungarian 
Communications Authority. 
40   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
ronment and carried out by service providers by significantly increasing network 
intelligence. By the end of year 2000 67% of wired homes had excellent or good 
quality multiple node (enabling bi-directional communication) cable-networks (this 
figure may go up to nearly 100% within the next two years). As CATV network is 
also suitable for high-speed data communication (2 Gbit/s) at moderate costs it may 
even be an alternative in the competition of last mile23 technologies. Besides Buda-
pest and some agglomeration settlements these technologies have been imple-
mented in the settlements of Monor node district and mainly in some large and me-
dium-sized cities (their cost-effective operation is expected within these categories) 
(Figure 5). 
Uneven network development is clearly illustrated by the fact that since 1995 
regional-level dispersion indicator decreased only by 4 points (to the value of 0.26) 
while county-level dispersion indicator decreased by 10 points (though the start 
level – 0.46 – was also much higher). Micro-regional dispersion indicator is very 
high and stabile (0.57). This is clearly showing how large the difference among 
regions. At the end of year 2000 CATV services were completely missing in eight 
micro regions (Aszód, Szob, Sárbogárd, Püspökladány, Vásárosnamény, 
Nagykálló, Mórahalom) but on the other hand 30% of homes had CATV in five 
micro regions (Oroszlány, Tata, Tatabánya, Veszprém, Miskolc) and at least 25% 
of homes were wired in another 15 microregions (Figure 6). On county level the 
indicators of Komárom-Esztergom, Zala and Veszprém counties are the best, on 
the other hand Pest, Szabolcs-Szatmár-Bereg and Jász-Nagykun-Szolnok counties 
have the lowest indicators. Since 1995 the position of the first and last counties has 
remained the same. The connection between the two channels of communication 
(telecommunication and CATV system) is weaker than expected and shows the 
marks of instability. As it has been seen the development of telecommunication 
infrastructure does not automatically generate the growth of CATV services and 
has no significance on the number of fixed telephones (Nagy, 2000a). 
The change of legal regulation generated an intensive concentration within the 
CATV market, as several service providers were unable to fund the costs of the 
total modernisation of their network or transfer its costs to subscribers. UPC the 
Dutch CATV provider is the most aggressive company in this market – due to its 
special interpretation of telecommunication acts and decrees – was able to grow 
into the largest CATV service provider in Hungary. The affiliate of MATÁV is the 
second in the competition. Between 1998–2000 these two companies won the ma-
jority of those market segment in places with offering concentrated demand for 
mid-term period. This left only moderate development chances for small and 
                                                      
23 Through the utilisation of the capacities of digital telecommunication networks several alternative 
technologies are competing for the best position in plugging in local subscribers into their network 
to obtain larger share within data communication sector as it is regarded to be the most dynamically 
developing market segment. 
 
41 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 5 
 
42   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 6 
 
 
43 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
middle-size service providers. They may expect some profit only from the 
establishment of some small micro-regional networks, though the operation costs 
on this spatial level are higher than in densely populated urban areas.  
The development of network intelligence has significantly reduced the speed of 
new installations but after its completion (at the end of year 2003) the intensity of 
joining new subscribers will go up again. Compared to the European standards the 
present supply indicator is very good but it may further be increased, especially if 
the number of communication applications is producing significant growth. 
CATV networks have undergone rapid quantitative and qualitative development 
during the 1990s. The high share of new subscribers and the improvement of net-
work intelligence enabled these systems to act as challengers for the telecommuni-
cation network in the field of integrated data transmission. However the strong re-
gional disparities, the aspects of network building and operation and the current 
development trends do not allow to reduce differences within this segment in a 
short time. For all that CATV networks, as information transfer agents should be 
taken into account in developing a micro-regional, county or regional information 
strategy. 
Microwave networks 
This data communication technology, looking back the shortest history, has been 
spreading over Hungary since 1992 and has undergone a rapid development. Sev-
eral factors have contributed to the success of microwave transfer technology. At 
first this technology was only an auxiliary service in areas left without wired 
broadband services (due to high costs or timing problems) or the physical surface 
made impossible the installation of technical devices. In the second half of the 
1990s with the extension of network and the development of microwave technol-
ogy – besides its existing advantages – new benefactors emerged. Apart from fast 
and low-cost entry, the system offers the following advantages: 
•  High quality and secure data network facilities 
•  Good configuration: data network capacity may easily be assessed and 
customised. Suitable both for short and long-distance communication. De-
pending on the carrier’s frequency this technology is suitable both for low-
speed (point to multipoint) and high-speed (point to point) communication. 
•  Competitive prices as in case of point to multipoint system service providers 
can switch their users into the network without using a third party provider’s 
network. 
•  Microwave platforms integrating digital broadcasting, voice and data transfer 
and Internet access good starting points to interactive and multimedia ser-
vices. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
From the aspect of the accessibility of these services we emphasise that several 
Hungarian telecommunication companies are profiled in microwave data transfer 
services. GTS Hungary and Antenna Hungaria have built their own national back-
bone system (Figure 7 – Annex). GTS Hungary has built microwave stations at 
more than 600 points, while Antenna Hungaria has built at 51. In the same period 
MATÁV has built its independent microwave network. This technology is ex-
tremely valuable today because after liberalisation telecommunication companies 
established their services in such areas where optical or copper wired subscribers’ 
networks had not been installed but had available backbone facilities. 
Despite these advantages of microwave technology its later development largely 
depends on frequency management policy. The most valuable frequency range for 
telecommunication and data communication has already been distributed. For this 
reason there will be a heavy demand for those frequencies that represent high value 
for telecommunication and data communication. (i.e. they cover long distances) 
and a continuous battle will be going on for their redistribution. The increasing 
value of available frequencies is well illustrated by the fact that telecommunication 
companies – in Europe and since the 1990s in Hungary as well – are paying heavy 
sums for frequency licenses (e.g. cellular phone service providers for 900 Mhz, 
1800 Mhz, GPRS, UMTS). In Hungary the frequency band of 3.5 Ghz has been 
sold out24 and a new tender will soon be announced for the distribution of the 26 
Ghz frequency band. These new frequencies will serve as a basis for companies 
profiled in microwave data transfer to improve their network and services (leased 
line, Internet access, VoIP, speech technology etc.) through which they can signifi-
cantly extend their telecommunication access into less provided areas. This tech-
nology will spread mainly in urban agglomeration areas where mostly multiple-site 
companies will be its end-users.  
Outlook 
There are some already tested but not yet implemented technical applications such 
as data transfer through the electricity network which would make advanced data 
communication networks instantly available for 96–97% of the total population. 
We did not go into technical details in case of VoIP, the ground stationed satellite 
system or the AM-Micro systems, making regional-level data communication 
available for users. Although these technologies are the real alternatives of the ex-
                                                      
24 There were five winners in the auction for the license of 3.5 Ghz frequency band (Vivendi, 
MATÁV, PanTel, Antenna Hungária, GTS Hungary) who paid a sum of 2.8 billion HUF into the 
central budget. This is higher than originally expected. 
 
45 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
isting forms of communication they are not analysed in this paper25 because they 
would have very small impacts on the present spatial structure. At first it will be 
large consumers who will benefit from the advantages of competing “last mile” 
technologies and the liberalisation of telecommunication but we are on the opinion 
that technology development, the ongoing improvements will bring positive 
changes for small individual users within the next few years. It is a bigger problem 
how micro-regional/regional level, which has a larger role in the articulation of 
local interests and the co-ordination of resources, can follow the changing situa-
tion. Can it find the most suitable technology or an optimal combination of com-
peting technologies and use them for better spatial organisation and integration? As 
a step towards direct democracy will it be possible – at least on regional level – to 
gather the opinion of (almost the total) population in an issue on which policymak-
ers can make and execute their decisions on majority vote basis? Can public ad-
ministration get closer to people at least on local or even on regional levels? Can 
new technologies help us in turning the present political power system into a serv-
ing for the people system? Does the spread of new technologies create equal 
chances for us all? Can we avoid the making of another social gap, which would 
create a dualistic society through the dimensions of information illiteracy? 
2.3  The future trends of telecommunication and data 
communication market 
Telecommunication and data communication were success stories in Hungarian 
economy at the end of the 20th century. Their profitability index – especially since 
the mid–1990s – were far above the national average. The annual increase in the 
net income of the Hungarian telecommunication sector was 35–40%, more than 
double of the West European average. All the time profitability was determined by 
the extremely high investment rate (it was 25% in year 1999) and this resulted in 
the continuity of the development of new technologies and services and in the 
growth of the whole telecommunication and data communication network. During 
the last years of the 20th century as coming closer to the liberalisation of telecom-
munication in 2002 there was an increasing competition among companies in the 
area of telecommunication and data communication in the limited-size market of 
Hungary. To preserve their market positions, to meet the ever changing market 
demands and to yield the pressure of proprietors, investors and the stock exchange 
the launched new and new technology development, service enhancement and net-
                                                      
25 Novacom Telecommunication Ltd. has developed a technology for the transmission of telecommu-
nication signals to households through the electricity network system. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
work development projects. These projects were aimed at increasing the number of 
subscribers and at providing them as a wide range of services as possible. However 
several companies were unable or – due to the long investment return period – 
were unwilling to finance the costs of investments and the Hungarian telecommu-
nication market – following international trends – faced26 several fusions and pro-
curements. After liberalisation new and rich service providers will emerge on the 
Hungarian market and further fusions, procurements and strategic alliance forma-
tions may be expected. This process is rather more strongly motivated by econo-
mies of scale, by a more powerful cost-efficiency, by a stronger bargaining position 
against satellite firms and by synergic effects, which may be achieved through the 
formation of strategic alliances. This means that during the first years of the 21st 
century the major trend in Hungarian telecommunication and data communication 
sector besides dynamic development will be the decrease of the number of service 
providers. 
Future trends in services 
Today more and more news information and data are being transmitted through 
separate and independent channels. But future is for integrated services. With the 
improvement of living conditions (with the spread of new forms in the maintenance 
of contacts, in the gathering of information and new work or leisure activities) 
there is growing demand to be connected to communication networks. Subscribers 
would like to have access not only to traditional communication (voice, data, 
pager, video signal transfer) service facilities but would rather to have their inte-
gration.27
Thus, to meet the new demands within the next few years the traditional serial 
line services will be replaced by new – broadband – (leased line, ISDN XDSL, 
VTMS, cable modem, VSAT) data communication systems and new services that 
will be provided by network operator companies. The spread of broadband net-
works and the further development of information society largely depend on such a 
regulation, which facilitates competition, and innovation, contributes to the devel-
opment of technology, to reducing the access costs and to the social adaptation of 
information technology.28
                                                      
26 These processes are clearly illustrated by Vivendi’s acquisitions MATÁV’s procurements and the 
procurement of Hungarian CTV and Internet companies by UTC and GPS Hungary. 
27 This trend seems to be verified by the fact that the demand for broadband services has increased by 
10–15 fold compared to the earlier periods. 
28 To this the Single Telecommunication Act and its execution directives as the guidelines of future 
development trends may be good starting points. 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Possible changes in transfer technology and telecommunication networks 
During the past ten years the number of telephone lines increased by 340%. But the 
last two years show a slowdown in the dynamism of development compared to the 
earlier period. This is a clear mark of the saturation of fixed phone service market 
(Table 8), which can be explained by the changing communication attitudes of 
potential subscribers and these attitudes are closely followed by the emergence and 
rapid diffusion of alternative products and services (e.g. cellular phone services, 
microwave telecommunication services, CATV networks). 
Table 8 
The number of fixed phone subscribers 
Number of main lines 
Relative change to the base period  
Year 
(items) 
(1991) (%) 
1991 1,129,100  – 
1992 1,292,100 
114.4 
1993 1,497,600 
132.6 
1994 1,785,400 
158.1 
1995 2,157,200 
191.0 
1996 2,651,200 
234.8 
1997 3,095,300 
274.1 
1998 3,385,100 
299.8 
1999 3,609,100 
319.6 
2000 3,687,000 
326.5 
June 2001 
3,756,776 
332.7 
Source: the author’s calculation on the basis of KHS (Central Statistical Office) data. 
During the next few years the increase in the number of fixed telephone main 
lines will ultimately depend on the competitiveness of the service packages of 
wired telecommunication companies and the capacity and quality of the backbone 
and auxiliary network service providers. Thus, it is expected that after liberalisation 
the backbone and auxiliary network of telecommunication service providers will 
further be improved, primarily in cities and their agglomerations, as these areas that 
offer stronger solvent demand for telecommunication companies. 
The present 92% digitalisation level of the telecommunication system will grow 
to 100% within the next two-three years and this will bring about significant 
changes in the quality of main lines as well. The rate of ISDN will increase from 
the present 10.7% to 30–35% by 2005, while the share of ADSL may reach 10–
15% within the total fixed telephony network. However by the end of this period 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
the penetration of fixed telephone network still going to be under the European 
average. The number of main telephone lines per 100 head is expected to be topped 
somewhere between 40–45 (Table 9).  
Table 9 
The division and density of ISDN by counties 
Counties 
1998 
1999 
2000 
Population  The share of po-
Density 
pulation within  (lines/1000 
the country 
head) 
Budapest 48,372 
70,052 
159,590 1,811,552
49.54 
8.81 
Bács-Kiskun 1,286 
2,938 
8,912 
532,465
2.77 1.67 
Baranya 2,212 
3,796 
13,264 
400,806
4.12 
3.31 
Békés 61 
224 
1,820 
391,702
0.56 
0.46 
Borsod-Abaúj-
1,966 3,912 14,966  729,965
4.65 
2.05 
Zemplén 
Csongrád 0 
161 
3,772 
417,668
1.17 
0.90 
Fejér 1,869 
3,495 
9,412 423,531
2.92 
2.22 
Győr-Sopron-Moson 2,734  5,666  16,706  424,507
5.19 
3.94 
Hajdú-Bihar 1,646 
4,190 11,338  541,581
3.52 
2.09 
Heves 648 
1,242 
7,704 
322,629
2.39 
2.39 
Jász-Nagykun-
1,069 1,552 5,878  410,694
1.82 
1.43 
Szolnok 
Komárom-Esztergom 756  2,057 6,332  311,770
1.97 
2.03 
Nógrád 115 
285 
1,710 
216,538
0.53 
0.79 
Pest 2,956 
4,952 
19,206 1,032,672
5.96 
1.86 
Somogy 0 

7,966 
330,261
2.47 
2.41 
Szabolcs-Szatmár-
674 1,666 7,184  569,676
2.23 
1.26 
Bereg 
Tolna 0 
1,366 
6,048 
243,701
1.88 
2.48 
Vas 915 
2,364 
6,108 
266,411
1.90 
2.29 
Veszprém 290 
1,027 
4,350 
371,862
1.35 
1.17 
Zala 1576 
2,944 
9,910 
293,233
3.08 
3.38 
Hungary total 
69,145 
113,889 322,176 10,043,224
100.0 
3.21 
Counties total 
20,773 
43,837 
162,586 
8,231,672
 
 
Source: County Statistical Yearbooks, 1999–2000. 
The regional (or rather county) level distribution of telephone main lines shows 
a tendency of equalisation while on local level a strong polarisation may be prog-
nosticated. Some 60% of telephone main lines will be concentrated in cities with 
population above 50,000.  
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
In mobile telecommunication the growth of the number of subscribers – even if 
its intensity will be below the 2000–2001 level – is still continuing. Decreasing 
growth dynamism may be explained by the narrowing of solvent demand, by the 
still high service fess and by the slow diffusion of modern technologies (GPRS, 
EDGE, UMTS) in Hungary.29 Thus mobile communication cannot expect rapid 
development within the next few years. The low bandwidth (9.6–14 kbit/s) of the 
present GSM technology is not suitable for the simultaneous transfer of integrated 
data, speech and video signals. Significant development may only be expected 
from the introduction of GPRS30 (a packet switched data transfer system) and from 
the completion of the third generation UMTS technology tender, which will intro-
duce this technology in wider spheres. 
By the end of year 2003 cellular phone penetration will increase to 70–75% 
from the present 50%. It is also expected that – for all the technical limitations of 
GSM technology – the majority of telecom service providers’ incomes will be re-
sulting rather from data communication than voice communication.31 This rapid 
development of mobile communication industry is necessary both for economic 
and regional development, because data communication and its advanced services 
will be available in such territories where – due to several reasons – the building of 
fixed telephone networks was impossible. 
In Hungary CATV services were available for 1.6 million households in 
960settlements in 2001. 60% of the market is shared among four large CATV pro-
viders. (UPC 36.7%, MatávkábelTv 11.3%, Fibernet 6.7% EPA-HCS 3.3%). The 
remaining segment of the market is shared among 300 small CATV companies. 
There will be no significant changes in the number of subscribers within the next 
two years but the number of service providers – as a result of sharpening competi-
tion and its side-effecting fusions, procurements – may significantly decrease. 
CATV companies, preparing for the provision of telecommunication services 
after the liberalisation of this sector, have significantly modernised their network. 
This enabled them to provide good and cheap telecommunication services, which 
may guarantee the quick, return of their investment costs. Their job is made 
difficult by the fact that even the largest CATV service provider has no national 
backbone system. For this reason after the termination of telecommunication 
concessions CATV service providers will probably form a strategic alliance with 
                                                      
29 Several potential cellular phone users are postponing their purchase until the introduction of new 
technologies. 
30 In the first half of year 2002 WESTEL introduced its multimedia service (MMS: Multimedia Mes-
saging Service), based on the quick packet switched data system. This is a large step towards inte-
grated services (the simultaneous transfer of graphic, voice and text information). 
31 This seems to be verified by the fact that in the near future large media companies, transportation 
and travel agencies, commercial chains, several service providers and banks are planning to intro-
duce their online service packages in the mobile market. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
telecommunication companies who have it, so that they could introduce their 
integrated service packages in the market. 
Those CATV providers who have freshly entered the telecommunication market 
may have competitive advantages against their counterpart telephone service pro-
viders. This advantage is based on the relative cheapness of integrated service 
packages, (voice, data, video, traditional and later digital programme distribution) 
which may be distributed through broadband (even 8 Mbit/s) CATV networks32. 
Another advantage of these services is that within a short time they will be avail-
able for 1.5–1.6 million households33 without having to use the local telephone 
networks. This will urge service providers for applying a competitive price system 
within voice communication services as well. During the forthcoming years we can 
expect a growing involvement of CATV companies in local call services. 
Microwave network services will preserve their present popularity, especially in 
such areas where wired services are not available or if so, their prices are too high. 
The demand for microwave communication services is well illustrated by the fact 
that the Communications Authority only in year 2000 issued 750 frequency-range 
marker resolutions and 578 microwave aerial tower building licenses. This shows 
83% growth in comparison with the previous year’s indicators. Due to easy port-
ability, flexible customisation and the integrated service providing capabilities of 
this technology it is quickly spreading among multiple site companies. The great 
advantage of microwave technology is that – just as CATV network systems – it 
does not require local telephone networks, so it can offer competitive services be-
tween urban areas and their agglomeration. Laser-beam data transfer technology 
may increase its popularity among multiple-site institutions and companies in cities 
and agglomerations. Besides its several advantageous technical parameters (Mbit/s 
range of data transfer capacity, quick and cheap transportation, the operation of the 
equipment is simple and does not require licenses) the spread of this technology is 
limited by some technical reasons (suitability only for short-distance data commu-
nication, requirement of direct visual contact, dependency on weather conditions 
etc.) as well. 
VSAT services are a special brand of microwave services. This technology is 
capable for covering huge even continental size areas. As this service is very ex-
pensive and it is used by a relatively small group of potential customers it has been 
introduced in some specific areas only – high-speed computer data exchange, credit 
card checking systems, electronic booking systems, disaster prevention etc. The 
large-scale public provision of these services in Hungarian telecommunication in-
dustry is not likely in the near future.  
                                                      
32 Integrated service packages are available for a flat rate, thus they are independent from traffic and 
free from traffic volume charges. 
33 Today data communication services are available through the CATV system in 82 Hungarian set-
tlements. At the end of the next 2–3 years this figure may be 5–7 fold higher. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Technical development may generate the innovation of other technologies and 
systems. Electric-energetic networks – as telecommunication signal carriers (such 
as PLC technology) may open up new perspectives in this area. The use of VSAT 
stations orbiting round the Earth for telecommunication purposes is also being 
tested. These systems will surely not be introduced for public services within the 
next 2–3 years. 
3  Internet in Hungary 
3.1   The evolution and development of the Internet 
The formulation of the Hungarian information network started in the mid–1980s, 
later than the West European development. Despite several problems (COCOM 
embargo, political transformation, economic crisis, poor funding of the information 
sector) the development of the Hungarian information network was progressing 
well and by now three major computer network circles have been formulated. 
HBONE (Hungarian Backbone), the first one, has the largest data traffic volume 
and has the greatest importance in network applications. HBONE is the computer 
network of the community of R&D, higher education, library and public collection 
institutions. Sulinet, the second network group of secondary schools, has been de-
veloping at a changing speed since 1997. Commercial data communication net-
works, having produced the most dynamic development and the largest variety of 
technical improvement are the third group within the Hungarian computer network. 
The first steps towards internetworking 
The development of the Hungarian computer network started within the framework 
of the Information Infrastructure Development Programme (IIFP) launched by the 
Hungarian Academy of Sciences and the National Technical Development Board 
(OMFB) and was funded by Hungarian (MTA, OMFB, OTKA, MKM) and foreign 
(World Bank, European Communities) resources. The programme had an initiative 
to build a computer network infrastructure for the Hungarian “academic” (R&D, 
higher education, library and public collection) community and to provide ad-
vanced information technology services for Hungarian users. In the first stage of 
network development between 1986 and 1990 the primary elements of information 
infrastructure were built. The embargo imposed by the Western World on the ex-
port of high technologies, equipment and devices was slowing down the speed of 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
building the system but due to Hungarian technology development initiatives a 
packet switching data exchange system was established at the turn of the 1980s and 
1990s through an X.25 network among the Hungarian research and higher educa-
tion institutes. With the implementation of international data communication stan-
dards (X.25, XXX, UUCP) and with the establishment of similar computer network 
services to the Western European counterpart institutes (electronic mail, bulletin 
board system, file transfer) all the technical criteria have been met to establish di-
rect information exchange with the international computer networks of research 
and higher education. This made possible for the Hungarian research and higher 
education community to join the EUnet network in the first months of 1990 and 
later on to EARN the European affiliate of the American BITNET network. After 
the lifting of COCOM embargo the modernisation of the Hungarian network con-
tinued by building new switch centres, microwave and optical connections in the 
strategic nodes of the Hungarian computer network system (Kanalas, 2000). 
The HBONE-system 
After Hungary’s joining the Internet in the year 1991, the HBONE network, the IP 
(Internet Protocol)-based Hungarian education and research network has been es-
tablished (1993) through the initiation of IIF. The foundation of HUNGARNET 
Association by the community of higher education, public collection and research 
institutes in 1992 was a great step towards the improvement of our international 
network connections and towards winning a membership in further international 
network organisations. HUNGARNET became a member of key international or-
ganisations (TERENA, DANTE, CEENET, ISOC).34 Through international co-
operation Hungary could join and participate in several European projects (e.g. 
TEN–34, TEN–155, Internet 2, EU 5th Framework Programme, GEANT). In the 
middle of the 1990s the increasing network traffic volume, the need for accessing 
new services, the maintenance of our information network connections (such as 
EuropaNET, Ebone) and the necessity of building up a modern information net-
work urged for launching a new national development programme of information 
infrastructure (NIIF, 1996). Within the framework of the new programme new in-
stitutions of HUNGARNET could join the HBONE system. Due to this extensive 
development – which also generated significant technical modernisation – the 
number of networked institutions has quintupled during the past ten years. Today 
                                                      
34 TERENA (Trans-European Research and Education Networking Association) – The most impor-
tant European network organisation. DANTE (Delivery of Advanced Networking Technology to 
Europe): a Pan-European service centre. CEENet (Central and Eastern European Networking 
Association): An association for networking in Central and Eastern Europe. ISOC (Internet 
Society): The Internet’s technical, organisational, standardisation and culture-forming international 
organisation.  
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
the “academic” community has 80,000 hosts (Internet end-stations) in 1000 insti-
tutions of 47 cities, connected to HBONE through 26 regional centres. The signifi-
cant growth in the number of users – 30,000 in 1994, 100,000 in 1996, 230,000 in 
1999, and some 400,000 in 2001 – resulted an enormous growth in international 
network traffic, which raised the problem of increasing the capacity of our interna-
tional connectivity. To manage this issue, first the bandwidth was increased from 
64 kbit/s to 2x64 kbit/s in the early 1990s and 256 kbit/s later in 1995. Within the 
same year HUNGARNET got a 2 Mbit/s connection access through EuropaNET 
(Amsterdam) of which 1 Mbit/s was available for HBONE. Network connection 
among Hungarian regional centres was established through leased lines, they gen-
erally provided a bandwidth of 64 – 256 kbit/s, while the core nodes of HNONE in 
Budapest maintained their connections through 100 Mbit/s optical, 10 Mbit/s 
Ethernet cables and 2 Mbit/s microwave networks. In the second half of the 1990s 
the development of the Hungarian computer network further continued at an in-
creased speed. The connection speed among HBONE regional centres was con-
tinuously increasing and the international Internet connectivity was also signifi-
cantly improving, due to the ATM-based 10 Mbit/s TEN–34 (May 1997) and the 
34 Mbit/s (17–34 Mbit/s EU, 17 Mbit/s USA)  TEN–155 EU projects.  
In 1999 a government decree was passed35, which had strategic importance 
from the point of further network development. The decree changed NIIF Pro-
gramme
  1999–2001 (1999), which had so far been funded from various and un-
certain sources into a target programme of the Ministry of Education to be funded 
directly from the central budget. Due to government funding the programme was 
able to pay the costs of national and international communication, to purchase new 
equipment and to introduce advanced IP services. The 2001 budget made possible 
the preparation for the GEANT (Gigabit European Academic Network Technol-
ogy) project – co-financed by the European Union – in Hungary and Hungary’s 
joining to the project in December 2001. Through GEANT Hungary – with 10 
other European countries – established a 2.5 Gbit/s network connection with the 
European academic research network (Table 10 – Annex). The end-points of the 
Hungarian backbone system have been established at seven university HBONE 
centres and eight nodes in Budapest.36 The project will not only significantly in-
crease the connection speed to Europe but the changing demands of information 
will also bring about fundamental changes in Hungarian research network technol-
ogy, in service quality and in the principles of network organisation (Csatári–
Kanalas, 
2002). 
                                                      
35 95/199 (VI.23.) Government Decree on the operation of National Information Infrastructure De-
velopment Programme (NIIFP) 
36 The end-points of HBONE system are Miskolc, Debrecen, Szeged, Pécs, Veszprém, Sopron, 
Gödöllő, while in Budapest BMGE, ELTE, BGF, BMF, MTA, KFKI, SZTAKI and MeH. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
The “Sulinet” schoolnet-system 
The “Internet for Secondary Schools” (Sulinet) Programme was launched in Hun-
gary in September 1996 under the auspice of the Ministry of Culture and Educa-
tion37. The building of network, having been initiated by a consortium38, was 
started only in 1997 with the involvement of several concession-bound telephone 
companies (LTO-s). With the realisation of this project more than 1500 institutions 
(secondary schools, student hostels, primary schools) were connected to Sulinet in 
300 settlements. Of them 1200 were schools (70% secondary schools). The struc-
ture of network is divided into two levels. The first level – the backbone system – is 
a regional hub and a gateway to international connections through the fibre optic 
cable network of MATÁV. The secondary level – the auxiliary network – connects 
schools to the backbone. Large schools (having more than 500 students) are con-
nected to the network through a 64 kbit/s ISDN, small schools access the Internet 
through a modem. The backbone of Sulinet consists of 2 Mbit/s fibre optic system 
connecting central routers (switching machines for route selection) with their sub-
regions. International connectivity is maintained through the Hungarnet network. 
Until the beginning of 1999 this was a 800 kbit/s connection to TEN–34 the Euro-
pean network and a 512 kbit/s connection to overseas areas. This capacity signifi-
cantly increased with Hungary’s joining to the TEN–155 project, when the interna-
tional connectivity speed increased to 4.5 Mbit/s. GEANT project will further in-
crease both backbone and international connection capacities. Due to network de-
velopment Sulinet can provide Internet access for more than 500,000 students and 
teachers. Although Sulinet has achieved significant results it should be mentioned 
that the halting and modification of Sulinet programme broke the earlier dynamism 
of development. This means that the programme of connecting every primary 
school to the Internet will have been completed by years 2002–2003 only.39
Although several results have been achieved in the development of the infor-
mation infrastructure of public education, there are still a number of problems to 
solve. From the point of building the information society it is very important that in 
Hungary still in year 2000 there were significant differences among counties in the 
Internet access of public schools. In Jász-Nagykun-Szolnok, Bács-Kiskun, Borsod-
                                                      
37 Sulinet has the following objectives: to provide support for public education by the means of Inter-
net, to increase regional independence and create equal chances for all, to provide an access to 
Internet services for cultural organisations, public collections, to provide methodological support 
for Hungarian ethnic minorities how to access Hungarian culture through the Internet, to create 
standardised public access educational databases. 
38 The consortium of Elender Kft, MatávCOM and ANSware Kft is responsible for the building and 
continuous provision of Sulinet. This consortium assigned local concession-bound telephone or-
ganisations (LTOs) to be the subcontractors in building the Internet network. 
39 This means that until 2002 the Hungarian government must (should) connect another 3000 organi-
sations to the Internet. 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Abaúj-Zemplén, and Szabolcs-Szatmár-Bereg counties only 15–20% of public 
schools were connected to the Internet
The difference among schools in computer 
provision
 is a bigger problem. There are several schools where 7–12 computers 
should be divided among 300–400 students, which is not an ideal condition for 
teaching computer applications efficiently. The growing number of ageing comput-
ers at the majority of schools
 gives another big headache. Even if schools have 
greater opportunities to win support for the modernisation of their computers they 
are unable to continuously replace all of their old computers with new ones
. The 
education of computer and information skills at school is the biggest problem of 
all. It is quite common that village schools cannot find computer specialists to 
teach computer and information science for their students
 and/or they don’t have 
suitable teaching materials. These problems create enormous differences in infor-
mation access not only among regions but on national level as well. Several spe-
cific problems of the information age (the absence of Internet access, information 
illiteracy, inadequate information skills etc.) are recognised in these cases. 
Commercial networks 
Data transmission networks were already available since the second half of the 
1980s but their large-scale utilisation was hindered by the low demand of advanced 
services and by the absence of financial resources for their installation. The largest 
impulse for the development of data transmission networks were generated by the 
passing of Telecommunication Act in 1992 and the signing of concession agree-
ments in 1994–1995. They were followed the increasing volume of investments of 
local concession-bound and alternative telecommunication companies. These in-
vestments were motivated by concession agreement conditions on the one hand, 
and by the improving economic situation and the increasing demand for advanced 
data communication services on the other hand. With the modernisation of data 
transfer technology (X.25, Frame Relay) having been customised to the demands 
of telecommunication companies and with the improvement of network capacities 
and qualitative parameters, the data transmission network was completed by 1995. 
Also this was the time when the demand for computer data network services had 
reached a critical mass and became a basis for the introduction of profit-oriented 
services. Every year telecommunication companies invented new techniques in 
data transmission to switch new areas and potential users into their service cover-
age. 
Several factors hindered the intensity and homogeneity of the spatial diffusion 
of Internet services. One example is that in the second third of the 1990s Hungary 
still had primary node districts with lower than 50% of digital exchange centre ca-
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
pacity.40 Telecommunication companies – hoping for the quick return of their in-
vestments – were building new networks first around large cities. Thus, villages 
falling off the urban agglomeration areas have been excluded from the access zone 
of data communication services. This further increased the regional disparities of 
telecommunication. 
CATV networks as the alternatives of telecommunication services also had 
technical problems. The modification of the Telecommunication Act in 1999 did not 
accelerate the spatial diffusion of CATV networks. The Act stipulates that in set-
tlements with population over 30,000 telecommunication companies with existing 
telephone network are not allowed to build CATV system, and one CATV com-
pany is entitled only for maximum one sixth of the total CATV market41. This re-
sulted in such a funny situation that – despite their potential chances – the devel-
opment potentials of profitable companies to build a CATV network are limited by 
law. Small CATV companies, on the other hand, are unable to finance from their 
own resources such a system, which would be suitable for bi-directional (duplex) 
data communication. 
During the mid–1990s these were the technical and legal problems that were 
hindering the spatial diffusion of Internet services but the greatest barrier to the 
growth of Internet subscriptions were the very high – even in comparison to the 
European average – Internet access fees
  (Table 11). As compared on purchase 
power parity the costs of Internet access in Hungary are almost double of the EU 
average. It must be added however that during the past years (1998–2001) Internet 
access fees significantly dropped both for the private and business sphere (Figure 8 
– Annex)

Table 11 
Changes in Internet access fees in Hungary (HUF/month) 
Name 
19981
1999 
20002
20013
Individual user 30 hrs per month Internet 
19 115 
10 800 
8 500 
7 500 
access in off peak period 
Business user 20 hrs per month in peak period 
20 162 
17 733 
14 385 
12 500 
1  The values of year 1998 do not include the night period reduced rates of MATÁV. 
2  The values of year 2000 are the unlimited service package fees of MATÁVnet. 
3  The values of year 2001 are the unlimited service package fees of Axelero. Business user fees are 
based on the service package fees of IrodaNET (ISDN 64 K). 
Source: Carnation Consulting, MATÁV, Axelero. 
                                                      
40 On 31 December 1998 the full capacity of digital exchange centre capacity of the primary district 
of Szentes was 42% and of Baja was 23. 
41 LXVI/1999 Act (the modification of the LXXII/1992 Act on Telecommunication) 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
The falling prices of Internet access, the improvement of services, the spread of 
individually customised data communication techniques (ISDN, CATV, leased line 
etc.) and the development of computer network system have resulted as a whole in 
a dynamic – nearly 50% – annual growth of Internet subscriptions since the end of 
the 1990s. 
Serial line Internet connection through a modem is still the most popular form 
of Internet services. They go up to 80% of total Internet subscriptions. However 
during the past years there is a growing demand for higher speed services than the 
bandwidth of telephone modems can provide (Table 12). The growt0h dynamics of 
high-capacity data transfer methods (between 1999–2001) – which can partly be 
explained by the low number of subscribers – was much stronger (17 fold in ISDN, 
12 fold in CATV services) than of modem-based connections. 
Table 12 
The number of Internet subscriptions within the categories of access method 
Name 
1999 
2000 
2001 
Number of Internet subscriptions 
137,929 
220,395 
301 828 
Access method category: 
 
 
 
Serial line connection (through a modem) 
133,672 
195,733 
247 948 
ISDN 1,693 
20,708 
27 
947 
X.25 1 


VSAT 10 
12 
13 
AM-Micro 2 
10 
21 
Cable TV 
1,401 
1,904 
17 419 
Leased line 
1,150 
1,900 
2 460 
Other (including ADSL since 2001) 

128 
6 020 
Source: Central Statistical Office, Statistical Monthly Bulletins 2001–2002. 
Within the next few years the rapidly growing CATV networks, the new xDSL 
(Digital Subscriber Line) and mobile communication (GPRS, EDGE, UMTS) 
technologies will further increase the share of high-speed data transfer services.  
Recently the competition in the market of Internet services has significantly 
increased. This is illustrated by a growing number of service providers – authorised 
by the Communications Authority – in some service segments (Table 13) and the 
number of subscribers having cancelled their agreement with their previous 
Internet service providers.42
                                                      
42 Only in the year of 2000, according to the data of Communications Authority 49,000 subscribers 
cancelled their agreement with their previous Internet service providers. 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 13 
 The number of information service providers sorted by service type 
Data network service providers 
122 
Voice-based Internet Providers (VoIP) 
56 
Other data network service providers (ISDN, ADSL, VSAT, Frame-Flex, etc.) 
21 
Switching service providers 

Integrated telecommunication service providers (e.g. leased line service) 
33 
Tele-conference service providers (video conferencing services) 

Source: Communications Authority, June 2001 
 
3.2  Internet access in Hungary from international 
perspectives 
We can draw a real picture on the recent development of data communication in 
Hungary if we have something to compare it with. During the 1990s the whole 
world has undergone a rapid change in the telecommunication and data communi-
cation sectors. Information-telecommunication industry has produced the most dy-
namic growth. The annual traffic of the so-called ICT market has reached the value 
of 1445 billion ECU in 1998, and according to estimations it will be some 2205 
billion EURO in year 2001. Its growth indicator within this period was 15%, which 
is much higher than the average index of any other industries (EITO 2001). 
In Hungary the growth of IC sector was 35–40% during the last 3 years of the 
1990s, exceeding even the international growth index. However it should be men-
tioned that this dynamic growth is explained by rather the experiment of closing up 
Hungary to the ICT provision level of the developed world. 
Within the info-communication sector the development of data communication 
networks, the increase of their data transfer capacities and their qualitative im-
provement are the most spectacular. Due to these improvements at the end of year 
2001 the 15 regional centres of the “academic” network were connected to 
HBONE at a data transfer speed of 2.5 Gbit/s, which is in full compliance with the 
performance of the West European academic networks.  
As regards Internet access, Hungary’s closing up to the modern world has 
started. Compared to the early 1990s Hungary has better indicators of domain 
name servers per 1000 head, especially the number of Internet end-stations (hosts) 
increased significantly (Figure 9 – Annex). The dynamism of growth is progressing 
well, Hungary’s fallback in this field is not more than 4–5 years. 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
On the other hand, the number of Internet users and their proportion within the 
total number of population are much lower than the European indicators (Table 14 
– Annex). 
This can be explained by several reasons. Among them the most impor-
tant are as follows: 
•  The lower level of living standards than in developed countries; 
•  The high price of computer devices and accessories compared to Hungarian 
incomes; 
•  High Internet access fees (the telephone costs of modem connection are ex-
ceeding the European average); 
•  Shortages in the physical availability of Internet access; 
•  Low level of computer skills, computer illiteracy; 
•  Low level of social accommodation; 
•  Age problems (elderly people quite rarely use this technology); 
•  Small number of Hungarian language homepages; 
•  The absence of foreign language skills. 
For all these problems, a significant increase in the number of users is prognos-
ticated, on the basis of four factors. 
Increasing living standards are the first of all but the reduction of telephone 
costs and subscription fees after the liberalisation of telecommunication may be 
another incentives. The continuous spread of computer skills education and alter-
native networks as a result of technical innovation are the next two major factors.  
3.3  The future development trends of Internet in Hungary 
Today Internet is a basic tool of maintaining connection and communication. The 
present trends (the liberalisation of telecommunication, the spread of computer 
education in schools, a significant reduction of Internet access fees, the qualitative 
improvement of services, the widening of content provision services) may serve as 
a good basis for its development. Due to these advantageous factors the number of 
Internet subscriptions increased by 120% between 1999–2001 (Internet providers... 
2002). 
It is expected that within the next two-three years Internet will mostly be ac-
cessed through telephone networks but ISDN and ADSL, providing larger speed 
connection, will have attract an increasing share of users. This trend seems to be 
verified by the launch of a project, adding a fourth network system to the existing 
three (HBONE, Sulinet, commercial networks), which would connect public ad-
ministration
 organisations through a fibre optical backbone system. Some 800 in-
stitutions, offices will be connected to this network and their large-volume data 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
traffic will require broadband cable connection.43 TETRA (Terrestrial Trunked RA-
dio)44 system with its highly reliable and secure communication and information 
facilities to be installed for emergency service organisations (police, fire-brigade, 
disaster prevention etc.) is another example for the qualitative improvement of 
Hungarian data communication network. 
With the improvement of the qualitative parameters of CATV networks and 
their user-friendly service packages – offering integrated services in some cases – 
CATV services will serve for at least 20% of total Internet subscribers. The number 
of microwave and mobile service subscriptions will also increase. The spread of 
these services will highly depend on the date of the introduction of UMTS technol-
ogy in Hungary and on the price its services will be sold. This technology will 
surely not be available for masses within the next one and half-two years. Until the 
introduction of UMTS mobile Internet facilities will depend on the development of 
WAP technology. 
In recent years the growth in the number of Internet subscribers has been fol-
lowed by an intensive growth in the number of Internet end-stations (hosts). Com-
pared to the values of year 1996 the number of Internet hosts has octupled (Figure 
10 – Annex)
.  
The increase in the number of hosts will at least maintain its present dynamism 
until year 2003. The present 17.6% penetration will annually increase by 8–10 per-
centages. These optimistic forecasts are based on Hungary’s good economic devel-
opment chances. During the past years a number of events have happened (the 
launch of the National Information Society Programme (1999–2001), the passing 
of the Electronic Signature (2002) and Single Telecommunication Act (2001), the 
launch of e-governance programme (2002)), which are promoting the spread of 
information technology. These with future changes (e.g. the liberalisation of tele-
communication, technology innovations, 26 Ghz and UMTS tenders) are creating a 
good basis for the further development of Internet and its social adaptation. The 
spread and the application of Internet in Hungary can be a success story only in 
case its access (I mean here both physical access and affordable use) is guaranteed 
for the widest range of territorial levels and social groups. 
                                                      
43 The inauguration of the first phase of the governmental information network took place in April 
2002. 
44 TETRA system is an open, European standard, professional group communication system having 
been developed for high-speed, extra reliability and secure information transfer purposes, mainly 
for governmental-emergency utilization. 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
4  The competitiveness of counties within the 
Information Society 
During the spatial research of information society it is very important to form a 
clear picture on the progress, spread and regional differences of information 
equipment supply and information activities. For this reason this chapter will dis-
cuss the features of the spatial distribution of registered domain name servers on 
regional level, as domain name servers are the most essential parts of content serv-
ice provision. 
In the second part of this chapter we will demonstrate the information develop-
ment level of Hungarian counties and regions through the presentation of eco-
nomic, social and info-communication indicators and also the interrelationship of 
their relative development, to point out their accommodation and activity levels at 
the brink of the new information age. 
4.1  Spatial diffusion and distribution of domain name servers 
Among the indicators of spatial differences in the development of information 
technology the volume of domain name registrations with their attached domain 
name servers and their spatial distribution seem to be the best for further analysis. 
The available database of domain name servers provides information not only on 
the spatial distribution of technical devices but also very useful for the determina-
tion what fields of content service (e.g. economy, public administration, education) 
they are used for. These are all the indicators of information culture and the Inter-
net activity of a certain area or activity sphere.  
Since Hungary’s joining the Internet in 1991 there is a continuous growth in the 
volume of domain name registrations (Figure 11 – Annex). From the databases of 
RIPE45 and Hungarnet Association it is clearly seen that since 1997 the volume of 
domain name registrations shows a continuous growth and since March 2000 – the 
date of the liberalisation of domain name registrations – this growth has signifi-
cantly accelerated.  
The spatial diffusion of domain names – with their attached domain servers – is 
well illustrated by a survey having been carried out at the end of year 1998 first. At 
that time the total volume of domain addresses was 5264, with a spatial coverage 
of 260 settlements (Kanalas,  2000). The second survey in March 2000 produced 
                                                      
45 Reseaux IP Europeens: This organisation was founded by the EUnet for the management of conti-
nental TCP/IP network, the European Internet for the registration of domain names and for provid-
ing various information services. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
12,753 domain names in 473 settlements. As the latest samples having been taken 
in November 2001 indicate 67,715 ‘.hu’46 domain name extensions have been reg-
istered at 37,600 hosts in a spatial distribution of 1092 Hungarian settlements (Fig-
ure 12)
. As it is seen the number of domains significantly increased during a three-
year period and now they are covering one-third of Hungarian settlements (Nagy, 
2002). 
For all these relatively high indicators the spatial diffusion of domain names and 
servers  shows  strong  urban  concentration,  as  82%  of  the  total  registered  domains 
are located in 23 cities of county rank. The presence of Internet and the demand for 
servicing a large number of hosts are yet not typical phenomena in rural areas.  
The majority of domain name servers have been registered in Budapest. Of the 
Hungarian cities Szeged (1556), Budaörs (1210), Pécs (1206), Debrecen (1063) 
and Győr (878) have the largest volume of domains. Domain name servers – 
needed for running e-mail and Web services – are concentrated in central cities 
with large population, significant administrative, cultural, educational functions 
and last but not least these cities are commercial and economic centres as well

Budaörs is in a specific position from this aspect as it has neither public adminis-
trative nor educational or cultural functions but its advantageous geographical lo-
cation (easy access to motorways M1, M7, the proximity of Budapest) concen-
trated several economic organisations there. There are many businesses in Budaörs 
that either by business profile (commerce, storage, logistics, freight transportation 
or other) motivations or for corporate structure (only the site, the manufacturing 
unit is located here, the company seat is in Budapest or in other Hungarian city) 
reasons should carry on intensive communication to which modern information 
equipment and wide-range information services are indispensable (Figure 13)
Those 430 settlements having only one server for the provision of their local 
community content services (information, facilities, products) and for the mainte-
nance of electronic data connection are the other extremes on the palette of infor-
mation access. As they are preparing for the adaptation of a new technology at 
such places that have hardly participated so far in the global exchange of informa-
tion, they have a key role in the distribution of information culture.
 
The spread of domain servers – representing both the innovation of products 
and activities – its rules following the patterns of economic development and the 
establishment of new business enterprises were analogue with the spread of the tra-
ditional elements of infrastructure (public road system, energy and telecommuni-
cation networks etc.) and were also perfectly harmonising with the resulting set-
tlement hierarchy structure. Recently a third – a specific – diffusion pattern has 
                                                      
46 This figure includes the domain names having been reserved by domain brokers. The number of 
domain names not registered by domain brokers was 48,192 in January 2002. In our research we 
were calculating with the total number of registered domains. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 12 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 13 
 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
been formed in which new domains are registered in apparently remote areas and 
different activities. In this case not the classic site selection factors (advantageous 
geographic location, economic development, large consumer markets) are domi-
nating but private persons (in Hungary more than 10,000 names have been regis-
tered by individuals) with their specific ideas, attitudes and creativity are standing 
in the background of this phenomenon. As it is seen behind the numbers, more and 
more users believe that Internet may have a significant role in the demonstration of 
their activities and in the distribution of their services on a wider scale

By taking a look at the county-level distribution of domain name registrations 
we can see that economically and socially the most developed counties have the 
largest volume of domain names (Table 15 – Annex)
Both absolute and relative indicators show the dominance of Budapest (having 
65% of all the Hungarian domain registrations) and Pest county. The indicators of 
Csongrád, Győr-Moson-Sopron and Baranya counties are also good. However even 
in counties of high indicators there are sharp distributional disparities within the 
counties themselves. In most counties the volume of domains in the county seat is 
exceeding 50%. This value is extremely high in Debrecen (88%), Szeged (84%) 
and Pécs (83%). This shows a sharp dominance of county seat within the county. 
The spatial distribution of domain registrations is the most homogenous in Pest 
county. Here the number of settlements with some 100 domain registrations is 
more than 10. But for all that even the best (Budaörs) of them has only 20% of the 
total domains in Pest county. 
At the other end, the lowest number of domain names is produced in Nógrád 
(0.55%) and Tolna (0,55%) counties but they are struggling with additional (eco-
nomic, social, infrastructure) problems. These low figures illustrate that the adap-
tation to information technology is progressing very slowly here, which may ex-
plained by weak economic development, the low number of business organisations, 
the underdevelopment of information infrastructure, the residents’ low education 
level or even by inadequate computer skills or by a limited demand for information 
services. From the point of relative indicators, Borsod-Abaúj-Zemplén, Szabolcs-
Szatmár-Bereg and Békés counties are also in crisis situation. In these latter coun-
ties the absolute number of domain name servers is not very low but their share 
considering the relatively high number of population is too low. This is verified by 
the low involvement of population in information technology. 
As regards the spread of domain name servers Nógrád, Tolna and Somogy 
counties may be the losers of regional competition because the penetration and the 
diffusion speed of those technologies (e.g. information equipment) that would con-
tribute to local economic development and to regional development processes in 
several areas (electronic commerce, e-administration, marketing, regional informa-
tion systems, public services etc.) are also too low. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Between 1998 and 2001 – due to higher initial values of provision – the in-
crease in the number of domain names was less dynamic in Budapest than the 
Hungarian average, so its share from the total number of domains also lowered. 
Fejér, Hajdú-Bihar, Somogy, Komárom-Esztergom, Tolna and Nógrád counties 
had a similar tendency. During this period Pest, Szabolcs-Szatmár-Bereg and 
Veszprém counties produced the most dynamic growth in this field. Pest county’s 
growing indicator is explained by the larger presence of economically prospering 
companies on the Internet. In case of Szabolcs-Szatmár-Bereg county regional de-
velopment grants and tender funds provided by the Hungarian government had key 
role in domain server funding for electronic mail and Web services in public ad-
ministration and in some business organisations. In Veszprém county Internet ser-
vices are mostly utilised for public administration, educational, commercial and 
tourist service purposes, these are the areas where the number of domain name 
registrations and servers has increased most of all. 
The results of research also verify that with the exception of the Central Hun-
garian Region the share of regions in the total volume of domain servers has in-
creased since 1998. The largest growth has been produced by the West Transdanu-
bia, the most advanced region, and – due to the good results of Szabolcs-Szatmár-
Bereg county – the North Hungarian region (0.69) and also the Southern Hungarian 
Plain (0.48). It should also be mentioned that these latter two regions of the Hun-
garian Plain that are facing serious regional development structural problems ini-
tiated several new information technology development proposals and programmes
 
(such as the Intelligent Region Operative Programme of the Southern Hungarian 
Plain). On this basis we can conclude that information technology and applications 
will have greater role in increasing the efficiency of economic and regional devel-
opment in the future

In our survey we analysed not only regional aspects but also the activity scope 
of domain name proprietors and the distribution of domain registrations by types of 
activity. The results are as follows; more than 95% of domain registrations from 
the aspects of building the information society fall into one of seven basic catego-
ries: (public administration, economy, R&D, individuals, civil organisations, cul-
ture, education) (Table 16)
Nearly three quarters of the total registrations are involved in economy and 
business. This is not surprising as here the profits of computer technology invest-
ments are the most measurable and this is where the expenses may return (e.g. e-
commerce, advertisements, payment charge services). 
The largest number of domains in the field of economy is registered in Budapest 
and Pest, Győr-Moson-Sopron, Csongrád and Fejér counties, while the smallest 
number is in Nógrád, Tolna and Jász-Nagykun-Szolnok counties (Table 17 – An-
nex
).  More than 50% of domain name proprietors are involved in computer and 
information technology business
. The potentials and development dynamics of this 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
sector is well illustrated by the fact that more than 70% of the total registrations 
within this sector have been made within the last two years. 
Table 16 
The division of domain name proprietors by their basic function 
Activity scope 
Percentage of the total registrations (%) 
Public administration, municipalities, offices 
2.34 
Civil organisations, businesses 
3.64 
Economic organisations, businesses 
74.90 
General education, culture 
0.37 
Education, training 
0.94 
Individuals 14.03 
Other 3.40 
Total 100.00 
Source: Kanalas’s calculation on the basis of data provided by Hungarnet Association. 
14% of domain proprietors are individuals. This relatively high proportion is 
partly explained by the high number of private entrepreneurs (432,000) partly by 
the fact that relatively small capital is needed to start such a business in computer 
and information technology industry (website preparation, information service, 
network operation and maintenance, domain name purchase and selling) which 
needs domain registration and server use. 
The first domain name for private use was registered in 1997 but the spread of 
domain name registration accelerated only after March 2000 (99% of the total pri-
vate domains have been registered since that time). The majority of private do-
mains were registered in cities with university campus (Budapest, Pécs, Szeged, 
Debrecen) and the remaining part was also registered in cities. Thus, county indi-
cators are practically the cumulated indicators of cities within the county (Table 17 
– Annex)
.  
Civil organisations and foundations attribute a growing importance to their 
presence on the Internet. This is verified by nearly 4% of their share within the to-
tal registrations. The number of domain names and websites of civil organisations 
has significantly increased since 1998. The presence of the “civil sector” was sig-
nificantly promoted by the CXXVI/1996 Act47, which regulated the utilisation of 
1+1% of personal income tax revenues. The Act authorised legally licensed48 pub-
                                                      
47 Act on the Utilisation of a Certain Share of Personal Income Tax Revenues by the Taxpayer’s Will 
48 CLVI/1997 Act on Public Organisations 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
lic organisations and foundations for raising a fund from 1% of personal income 
taxes in case it is nominated for them. This was such a financial incentive, which 
urged them to introduce their activities in the widest sphere. The spatial distribu-
tion of domain registered civil organisations shows urban concentration
. Among 
them Budapest has 71% of the total civil domain names. The dominance of Pest 
county is seen in the remaining parts of Hungary. They are followed by – due to 
the traditionally high values of civil society in Szeged and Székesfehérvár – 
Csongrád and Fejér counties (Table 17 – Annex)
It is remarkable that during the past two years several local governments and of-
fices have registered a domain name. As a result, today almost 900 governmental, 
public administrational authority and municipal organisations have their own do-
main names and websites, which will be suitable in several cases for the electronic 
management of several public and official affairs (tenders, requests, registrations, 
document administration, information etc.) In the future these services will pro-
mote electronic administration and will introduce e-government. Of the seven sec-
tors involved in our research this is the only one that shows the largest spatial ho-
mogeneity of registered domain names (Table 17 – Annex). The development – 
which is rather showing a tendency of spatial equalisation – is bringing equal 
chances for Hungarians living anywhere in the country to manage their affairs 
electronically and to access e-government services easily. 
The institutes of education are also very active users of information technology. 
353 institutes of education and training have already registered their domain name. 
Due to the growing need for higher education and the increasing demand for cer-
tain faculties and departments, several universities and colleges provide tuition-fee 
based education services. To introduce their services to the public, to increase their 
prestige and to serve their high-number Internet domain terminals they have regis-
tered 200 new domain name servers during the past 5 years. Sulinet programme, 
having been launched in 1997, also contributed to this by tens of servers providing 
help in this way to several secondary and primary schools to start their electronic 
content service provision. 
The spatial distribution of schools with domain name shows a relative homoge-
neity  (Table 17 – Annex). The domain registration indicator is extremely high in 
counties with cities of university campus. The number of new registrations will 
increase but their ratio will practically remain the same. 
The presence of cultural and R&D institutions on the Internet is still very low. 
This is well illustrated by the fact that only 140 institutes of culture (museums, 
culture centres, theatres) have registered 149 domain names so far, and 40% of 
them are located in Budapest (Table 17 – Annex)These low figures are clear indi-
cators of the poor economic situation of Hungarian culture (most institutes have no 
financial resources for the maintenance of domain name servers, for the electronic 
processing and presentation of their collection and for paying all the other expenses 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
that have incurred by these activities) and the deficit of all the efforts to demon-
strate Hungarian culture on the Internet. 

Hungarian R&D sector is facing a similar situation. The Budapest-bound or-
ganisational model of the R&D sector is reflected in its presence on the Internet 
(78% of the total R&D domains are located in Budapest). What makes these spatial 
disparities worse, is that there are no domain registrations from the R&D sector in 
four counties (Komárom-Esztergom, Nógrád, Somogy and Tolna) and in additional 
seven (Békés, Borsod-Abaúj-Zemplén, Szabolcs-Szatmár-Bereg, Zala) there is 
only one in each (Table 17 – Annex). The present situation does not favour for the 
social and professional prestige of research institutions as (they are not visible on 
the Internet, the most public forum for all, they do not make their research results 
available for others, which things today are essential to create publicity and pres-
tige for a science) their research results and activities – as they are unavailable on 
the Internet – will be accessible only for a small community. A significant change 
in these attitudes would be necessary, so that anyone interested in the results and 
the intellectual heritage of Hungarian science – in compliance with the demands of 
our present information age – whether be inside or outside Hungary, could have an 
access to them through the Internet. 
As a conclusion we can declare that domain server provision has significantly 
increased during the past few years in Hungary. The end of the 1990s can be char-
acterised by a dynamic but at the same time a very concentrated development of 
information technology and services but this tendency – on regional level – has 
moved towards the equalisation of regional disparities. However we also would like 
to point out that the majority of information technology investments and 94% of the 
total domain name registrations have been concentrated in urban or peri-urban 
(agglomeration) areas
. These phenomena call the attention for a very important 
problem from the point of spatial structure and regional development. In the pre-
sent situation Hungarian rural areas beyond their existing development problems 
(insufficient infrastructure supply, economic backwardness, unemployment) will 
face a series of new problems. The differences in the accessibility (both in physical 
and affordability sense) of information networks and equipment may further in-
crease regional development disparities between urban and rural areas. The low 
social accommodation of the utilisation of information technology may further 
widen – on the level of social career and self-assertion chances – the gap between 
villages and cities and this may bring negative impacts for us all. To overcome 
these disadvantageous tendencies such short-term objectives should be set up as 
raising the general level of information technology culture, the improvement of the 
general circumstances of accessibility to information sources, creating the precon-
ditions of social involvement for the building of a better information society. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
4.2  The relative position of counties in the rising 
information society 
The spatial diffusion of domain name registrations in Hungarian counties is not/ 
cannot stand as an explanation alone for the information and telematic devel-
opment of counties and their indirect or direct impacts on regional development 
processes. To give a deeper analysis for these impacts, to assess their potentials 
from the aspects of the future development of the information society a complex 
system of indicators was applied, which – within the limitations of this methodol-
ogy – made general development indices comparable with telecommunication, in-
formation technology, social and economic indices. In our research 30 indices are 
grouped into 6 main index categories. These categories are as follows: 

Population – Housing stock 
II Economic 
development 
III  The overall development of infrastructure 
IV  Telecommunication and information infrastructure development 

Research-development and the development of higher education 
VI  The development of culture and media 
The general development of counties by indices and index categories were de-
termined by rank analysis49 (Csatári–Kanalas, 2002). 
With the “traditional” (population-housing stock, economic development, over-
all development of infrastructure) and “new” – information activity, innovative-
ness, accommodation indicators – indices (telecommunication and information in-
frastructure development, the development of R&D and higher education, the de-
velopment of culture and media) we tried to outline the current trends in space and 
to reveal tendencies behind phenomena. It is very important to analyse the county-
level “presence” of the key factors of future economic development and to rank 
and categorise counties by each of the categories and by the overall six.  
The results of this method are providing information on the position of counties 
within their national-level ranking by index groups and by overall development, on 
the geographical location of developed or underdeveloped areas and on the pres-
ence and relative development of new development-generating factors (R&D, 
higher education, media development, information technology provision etc.). 
On the basis of rank analysis it is clearly seen that there are significant differ-
ences in the “overall” development of counties. Some of these differences are not  
                                                      
49 In all cases the best county in the rank is marked by the figure of 1, while the worst is marked by 
the figure of 20. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
new, they are the legacy of the past, having been resulted from the different spatial 
impacts of the economic depression of the early 1990s. The other, new group of 
differences has originated not from the underdevelopment of certain regions but 
rather from the differences in the intensity of development projects having been 
scheduled for different time-scales. 
It should be emphasised that our indices did not show a homogenous “growth” 
of spatial disparities in all aspects, in some cases differences are decreasing on re-
gional level. In case of the provision indices of the traditional elements of infra-
structure for example (water, waste-water, gas, energy, fixed phone supply sys-
tems) even the traditionally underdeveloped areas (on the basis of their overall de-
velopment indicators) areas are closing up to the national average (Table 18a–d – 
Annex
).  
In all areas the quality of housing stock, the provision of primary services have 
generally improved and the same applies to general economic performance. In 
every county the number of businesses or the value of gross domestic product 
(GDP) have increased. But there are huge differences among territorial units in the 
dynamism of economic development, in the profitability of economy and in the 
diffusion and development of the primary elements of information society
  (Table 
18a–d – Annex)

The results of our survey clearly show that county-level differences in the pro-
vision and development stage of those new areas stimulating regional development 
(higher education, research-development, information infrastructure and applica-
tion, advanced business services, ICT businesses) are the largest in those areas 
that have the greatest impact on their region’s long term regional competitiveness
 
both in Hungary and in international environment (Table 18a–d – Annex).  
On the basis of economic development and the preparedness for the information 
age and information activities counties may fall into one of the following groups: 
(Figure 14–15)
1 The shaping “core areas” of information society (Baranya, Budapest, 
Csongrád, Győr-Moson-Sopron, Pest) 
2 Areas “closing up” to information society (Bács-Kiskun, Fejér, Hajdú-Bi-
har, Veszprém, Zala) 
3 Areas “lagging behind” in the development of information technology 
(Békés, Borsod-Abaúj-Zemplén, Heves, Komárom-Esztergom, Vas) 
4  Areas of information “backwardness” (Jász-Nagykun-Szolnok, Nógrád, 
Somogy, Szabolcs-Szatmár-Bereg, Tolna) 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 14 
 
 
73 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure  15 
 
74   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
 
The first category is listing those counties that have 
a) a perfect supply and quality of telecommunication and information infra-
structure, 
b) high number of businesses, 
c) large higher education and research capacities enabling them to produce 
higher innovativeness and accommodation of new technologies than the na-
tional average, 
d)  county organisations, institutes and businesses with relatively advanced con-
tent service provision facilities, 
e)  cities and villages with several existing specific functions (such as ICT busi-
nesses, tourism, distance education etc.) which may generate further infor-
mation-communication activities, 
f)  high number of information applications (banking services, distance educa-
tion, e-commerce) that are operating fairly successfully. 
The second category is listing those counties that have not yet met one or two 
items of the above-listed criteria but their available financial, economic, institu-
tional and human capacities are enabling them for quick development. 
The third category is listing those counties, which have not met several items of 
the above-listed criteria. The absence of universities and research institutes is the 
most striking in Békés, Heves, Komárom-Esztergom and Vas counties but the in-
formation and communication network of these areas is also incomplete. The ad-
aptation of new information technologies is progressing slowly and the number of 
ICT businesses is still low. In some areas of Borsod-Abaúj-Zemplén and Békés 
counties relatively high unemployment and low living conditions are additional 
problem sources. Significant results in these areas may be achieved only by a well-
prepared strategic development policy and by launching complex information 
technology programmes

The fourth category concentrates counties that are facing several phenomena of 
social and economic crisis (low economic performance, unemployment, ethnic mi-
nority problems, poor education). The management of these problems is essential 
for the launch of information-communication development programmes. These 
counties need significant financial assistance from the central government for 
launching their regional development projects. 
On the basis of the present intensity of building information and telecommuni-
cation infrastructure we have good reasons to assume that within the next few years 
Hungarian telecommunication service providers will ensure good technical back-
ground and services for their customers in all primary districts of Hungary. For this 
reason it is not technical infrastructure but rather the adaptability of human factors 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
that will determine future development perspectives. Thus, a region’s development 
chances will depend on such factors as the education of its population, their special 
skills and their receptivity for the new. 
Hungary is following international trends as the government and local policy-
makers will have higher responsibilities in the active distribution of information 
technology applications
 (they are increasing receptivity through this way) and in 
working out a system of incentives for lifespan education
The building and devel-
opment of the information society cannot be successful without broad social par-
ticipation
. Large efforts should be made to increase the educational, cultural level 
and living conditions of socially handicapped groups. Without this not only the 
chances of regional equalisation will fade away but also new social conflicts may 
arise between the information-equipped social elite and the “information de-
prived
”. 
As it is seen from research results the “spatial diffusion” of information tech-
nology innovations and applications – having gone through an urban concentration, 
a typical phenomenon of the 1990s is getting more and more differentiated, which 
– has become a significant process even in socially and economically handicapped 
areas. From this we can conclude that these regions have recognised the impor-
tance of the potentials of the new information-communication technologies and 
they actively use them to increase their economic performance and regional com-
petitiveness. 
5   Regional IT strategies 
Since the mid–1980s more and more papers have been published on the develop-
ment chances of such regions, cities, micro-areas that had based their competitive-
ness50 on the spread of new devices, technologies and economic restructuring. Soon 
it cleared out that purely the implementation of new technologies is not a remedy 
for all regional problems as its powerful application has socials, sociological and 
cultural prerequisites. If they are disregarded any high technologies are no more 
than just “cathedrals in the desert”. 
The “information bing-bang”, the simultaneous “revolution of digitalisation” 
and their practical utilisation were such available instruments for regional policy, 
which could easily deliver information, skills and knowledge to the target areas. 
They seemed suitable for the elimination of those problems that were standing in 
the way of closing up areas being located outside core regions. As it is illustrated  
                                                      
50 Several years ago ITTs had already been included in the strategies of some sectors, one example is 
the pioneering applications of the financial sector! 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
by concrete examples the application of ITTs is not self-motivated, its impacts on 
regional and local development is relatively weak but its integration into a complex 
system may bring such a multiplier effect into all sectors of economy, which can 
stand as a more environment-friendly development alternative (Bruntland Report, 
1989). 
The ITT initiated spatial organisation will change the meaning of core and pe-
riphery. The use of terms node and inter-node area would be more adequate, as the 
majority of disadvantages associated with peripheries will disappear. ITTs have a 
specific role in regional development because they are not bringing peripheries 
closer to the core area but rather make the advantages of core areas available for 
peripheries. The big question now is whether an area can access information net-
works and through this it can participate in or it is excluded  from the ongoing 
global processes
. An area without primary infrastructure will soon produce the 
symptoms of running down: the decreasing number of intelligence jobs, the in-
creasing number of low salary jobs, the growth of dependency, the increase of ex-
ternal supervision, out-migration (Mészáros, 2003; Cas, 1995). 
In the literature of regional policy three relevant theories can be differentiated: 
1 The theory of deconcentration – the nearly homogenous spatial development 
of ITTs is a prerequisite here. In this case with the fading competitive 
advantages of traditional industrial areas the development chances of pe-
ripheries are increasing and this will result in a more homogenous spatial 
distribution of dwelling and workplaces and in a more optimal utilisation of 
available resources. 
2 The theory of concentration – it is based on the assumption that ITTS are 
preserving only the existing spatial structures. Large settlement concentra-
tions are the winners of the adoption and implementation of technical inno-
vations. The centralisation of management favours for settlements hosting 
large company seats. The polarisation of settlement structures gives larger 
power to the formation of new hierarchical structures. 
3  The theory of non-determinism – assumes that ITTs themselves have no 
impacts on innovation, they are merely intensifying the existing trends. The 
innovation features attached to them are exaggerated, the impacts of techni-
cal and technological innovations on society are experienced only indirectly 
or after a long time delay. 
It is generally true that in the first phase of expansion a strong concentration 
process is taking place on regional level (Tesauro–Papa, 1995). In the subsequent 
stages of expansion deconcentration processes are already measurable.51 In the 
                                                      
51 The real winners of the spatial diffusion of ITTs are the satellite small and medium-sized enter-
prises that can cooperate with innovative, large organisations! 
 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
mature stage of expansion deconcentration may continue outside the agglomeration 
areas, where ITTs are considered as preconditions (alternative technologies) but 
their adoption requires servicing and social background as well.52
Closing-up type developing countries may draw great advantages from this pro-
cess because after the building of their ITT infrastructure they can minimise their 
disadvantageous site location on micro-regional and regional levels53  (Farkas, 
1999). The success of the utilisation of opportunities that applications provide de-
pends partly on strategic regional development, partly on the regional-level adop-
tion of new technologies and organisation, and partly on social accommodation and 
skills (Tamás, in: About..., 1996). Again the role of social and psychological fac-
tors should be emphasised here because they are essential for a successful close-up 
process. Those approaches that are concentrating only on technical supply issues, 
disregarding those factors that motivate the recipients’ demands54, are all false. 
(Magyar–Karvalics, 2000). 
5.1   Core regions55
Within the information sector value-increasing, creative applications that create 
new jobs in several cases are the most typical phenomena. Regions can improve 
their services, transform their product structure and quickly adopt new corporate 
and management structures with the assistance of ITTs (Cities and new technolo-
gies,  
1992). The resulting better performance can enable regions to expand their 
markets and improve their economic and market positions. Modern ITT centres (in 
most cases teleports) servicing for the whole region have a very important role in 
the strategy of core regions. High-speed transport networks (motorways, high-
speed train services) and new information connections (ISDN, xDSL, Internet) are 
                                                      
52 In this model Hoberg (1987) pointed out that in the early stage of expansion decentralisation cannot 
take place, the advantages of densely populated areas are increasing. On peripheries applications 
may start only with time-delay, for this reason the attainable profit will be smaller than in core ar-
eas. ITTs do not change the migration and spatial distribution of population in short term. Later 
empirical researches pointed out that in the early stage of expansion larger regional differences may 
occur in developing countries than in developed ones. 
53 An interesting paradox is that the enthusiasm for ITTs is the highest always in the core and in the 
peripheries. In core areas the attainable advantages are realised day by day but in peripheries the 
diffusion of ITTs is only a symbol of belonging to the core, a symbol getting closer to the core. 
(See: Info 2000, 1996) 
54 Here the subvention of technical devices as an instrument of the acceleration of diffusion and the 
promotion of training and consulting services to facilitate the adoption of new technologies may 
come into sight. 
55 Core regions are defined as dynamic areas of the European ‘high-plain’, having been in the leading 
edge of economic development and innovation since the industrial revolution. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
increasing the value of metropolitan regions because they offer concentrated mar-
kets but at the same time they are lowering the value of inter-node areas (Engel, 
1992; Lahti, 1990).  
5.2  Traditional industrial areas – Strategies for regeneration 
ITTs are effective devices of industrial restructuring. Crisis is a spiral of depres-
sion, resulting in an increased functional dependency, economic polarisation, the 
absence of human capital and reduced entrepreneurial ambitions. It is also breaking 
up vertical and horizontal integrations. This may result in a kind of “creaming off 
tendency” in which the profits of diminishing internal value production are ex-
ploited by external agents. The way out of this trap may be the total reorganisation 
of the structural, institutional and management schemes in which ITTs may provide 
help for every partial segments. They can fully be utilised in the reintegration of 
corporate activities and in the regeneration of manufacturing-oriented management 
functions. They are reducing vertical integration but at the same time they are fa-
cilitating horizontal connections, the division of huge factories, they are reducing 
the costs of small-scale manufacturing, creating stronger export orientation and 
expanding the region’s SME base (Graute, 1995; Tiner, 1992).  
At the same time negative regional image should turn into a positive one, as 
policymakers do not like depression areas they are rather migrating into prosperous 
ones. Profit oriented technology transfer organisations and information centres are 
important instruments in this process. According to Gertler’s survey (1993) several 
firms face difficulties in the adoption and implementation of ITTs in traditional 
urban areas.56 His researches have cleared the role of social environment and social 
coherence in the success of adaptation. However the fact that national, regional and 
local specific features have created several varieties of the basic situation is work-
ing against issuing a universal know-how to manage all these issues by the same 
pattern. In Charreyron-Perchet’s opinion (1990) selecting those elements that work 
unsatisfactorily and changing them with the full agreement of those who are in-
volved in decision is the best strategy.  
During the preparation of industrial regeneration programmes depression sec-
tors with the depth of their structural problems should be assessed. The traditional 
crisis phenomena may require two different crisis management strategies. The first 
                                                      
56 Gertler is differentiating extensive and intensive adaptation. In the first case the implementation of 
new technologies will not increase the system’s efficiency and for this reason – mainly SMEs – re-
turned to the traditional production systems. The latter case is a planned, well-prepared adoption 
process, in which the application of ITTs was followed by corporate changes. In most cases success 
indicators were high. 
 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
is oriented towards the achievement of success in short-term. In this case the estab-
lishment and operation of new businesses should be promoted as they are bringing 
new economic impulses into the region by creating new jobs and by easing the one-
sided dominance of old economic branches. The drawback of this strategy is that it 
does not generate real industrial restructuring and within the a few years the same 
problems may come back again (Stöhr, 1990). 
In case of long-term regeneration priority should be given to qualitative ele-
ments, crisis management should be followed by real restructuring. This covers the 
modernisation of dominating industrial sectors and the introduction of new indus-
trial branches. In both cases this means the expansion of services – mostly business 
services – that are pushing out old industrial sectors. The demand of the “actors” of 
regional economy for information can be satisfied only through an extensive de-
velopment of communication networks. Existing networks are bringing new eco-
nomic opportunities, knowledge and connections for regional economy (Gertler, 
1993).  
5.3  The spatial organisation models of new industrial areas 
Since the 1970s a new development zone has formed outside the traditional “high-
plain areas” of Europe. In these areas different key sectors and partly different cor-
porate organisation schemes have been developed from those in core regions. We 
are going to introduce two examples of this model in details. The first is in South-
Germany (Baden-Württemberg) and the second is in Middle-Italy (Emilia-
Romagna). 
The restructuring of the regional and corporate scheme of car industry in 
Baden-Württemberg may serve as a prototype model. Increasing competition and 
the individualisation of customers’ demand have enforced the rationalisation of 
production, the increase of flexibility and the reconsidering of seller-customer rela-
tions. The vertical integration of production weakened and strategic partners were 
selected. Just in time and TQM were introduced in satellite firms, the development 
lifespan was reduced, greater efficiency was required from the organisation of pro-
duction even on the costs of outsourcing some potential tasks. Belonging to one 
firm was a requirement. The complexity of corporate units has increased (modular 
structure), innovation and development potentials increased and resulted faster re-
actions, reducing logistic and scheduling costs, increasing flexibility and rational-
ising production (Funck–Kovalski, 1993). 
The province is facilitating information flow and network organisation. DCO, 
the central data network, has been established connecting 90% of district adminis-
trative units. In 1988 165 cities were connected to the network having seven re-
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
gional centres (Hauser, 1992). The network operator produces services customised 
to the individual needs of cities from its recommended and continuously expanding 
service packages.  In 1990 car registration, personnel data management, motorway 
toll payment and voters’ registration services were available on the network but the 
environmental information system, GIS-based maps, geographical data processing 
and a real estate proprietorship registry system have also been modernised. Data 
collection and processing will gradually be transferred to regional centres (Rieder–
Maier, 
1994). 
The institutes of technology transfer have been in operation since 1971. In 1990 
114 centres with a staff of 2550 were facilitating the innovation process. Chambers 
are providing services to firms from marketing promotion, technical assistance to 
training and innovation-based facilities. The two networks have fundamental role 
in maintaining a high number of businesses. The Frauhofer Company and the Max 
Planck Institute are providing research background facilities all to this. This latter 
institute has 11 research institutes and 13 applied research laboratories (Funck–
Kowalski, 
1993). 
The role of regional policy is concentrated on the establishment of trilateral – 
governmental, industrial, scientific – relations (Graute, 1995). Besides large com-
panies regional government has an active role in the establishment of further rela-
tions. The region is participating in the ARGE-ALPES co-operation, it is a member 
of the Europe’s Four Engines Association and also has become a part of the Upper-
Rhein Euroregion (Basel, Mulhouse, Strasbourg, Colmar, Freiburg, Karlsruhe). 
Within this latter region higher education networks have been built and several co-
operation projects are running in such fields as computer science, software devel-
opment, robotics, biology and pharmaceutical industry. Chambers are providing 
detailed information on current programmes, researches and their available re-
sources within their territories (Graute,  1995). The building of information net-
works has significantly increased the innovation activity of SMEs and was a great 
step towards a more rationalised utilisation of available resources. The network 
provides direct co-operation facilities for 250 research organisations and their daily 
interactions are growing into a formal, institutionalised co-operation. (IAR = In-
stitute of Automation and Robotics French-German branches). 
The first co-operation projects were established within non-informational sec-
tors as well, following the community’s PAMINA project, which made chamber 
databases available for neighbour regions and provided continuous information 
services for partners, satellite firms, subcontractors to assist them in finding re-
sources, components or sales markets. When building a network, maintaining con-
tinuous contacts with satellite firms and markets has the utmost importance. Part-
ners are selected only from areas with advanced network services. “No EDI, no 
deal” – as the slogan says. 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Just in time specialisation, the SME-based economic organisation model got a 
greater publicity through the case of the Third Italy (Brusco, 1982). The intensive 
connections on all levels and in all dimensions are forming a new horizontal model 
of economic activities, which may be defined as industrial cluster or networked 
economy. Cooperation’s are the most successful traditional sectors, in which the 
adaptation of ITTs, just in time production systems and new marketing strategies 
has already taken places. All these sectors (such as shoe, clothing and furniture in-
dustries) have strong consumer orientation and they are producing goods in small 
series adapting themselves flexibly to the changing demands of the market (Conti, 
1993).  
Just in time production systems were first introduced in fordist style large com-
panies but the cheaper and simplified variations of these systems were soon im-
plemented in small businesses as well. At first they were applied in demand-ori-
ented sectors but later on in other economic sectors as well. They are the most suc-
cessful in the following areas: labour-intensive, design-intensive sectors, output 
production sectors, high-tech industries and various business services.  
Piore and Sabel (1984) called the Third Italian variation of just in time speciali-
sation as Benetton model. In clothing industry the servicing of consumers’ taste 
and the flexible specialisation of manufacturing have crucial importance. The quick 
reaction (QR) market strategy for Benetton was realised by linking strategic mar-
kets and production into a single chain in which production strategy is determined 
by the current trends of sale Brusco (1982) considers ceramics industry (Sassoulo) 
textile industry (Carpi) and North-Italian car industry (Torino) as the living exam-
ples of network economy. 
Flexibility, manifested in the quality of manpower and in manufacturing proc-
ess, is the most characteristic feature of this model. This process is strongly deter-
mined by the impact of ITT-based technologies, which significantly reduced the 
price difference between specific and standardised products in favour of the spe-
cific ones (Graham,  1994). Local production may develop only through its inte-
gration to the international market, which process will reduce the share of home 
markets and will increase the orientation of production towards national and inter-
national markets. 
The Third Italy example questions the traditional models of regional develop-
ment, which were excluding the possibilities of internal resource based develop-
ment. This development model is setting up a hierarchical regional structure and 
terminates the privilege of large companies and growth poles in the generating dy-
namic development processes within a region. The regional strategy is innovation 
oriented but based on “bottom to top” innovation models instead of diffusion-based 
adaptation theories. The new industrial system on basis of small-scale production 
technologies, specialisation and the new philosophy of organisation has radically 
changed the relationship between size and portability. The behaviour of local pol-
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
icy-makers, the practically free flow of information (sometimes through informal 
channels) and the outstanding co-operative attitude are the most important endoge-
nous factors. In regional network systems the spatial diffusion of innovation is also 
following new models, which are different from hierarchical or epidemic diffusion 
patterns (Conti, 1993). 
The weak elements of development are basic and applied researches and busi-
ness services but the development of telematics and information technology may 
eliminate their backwardness through the concentration of services and research in 
medium-size and large cities. On the basis of their experiences in unique or small 
series product manufacturing networked production systems may have powerful 
positions in fragmented markets that are based on the variety of demands. Flexibil-
ity, large companies and high technology may guarantee competitive advantages 
against the cheap commodities of the developing world (Fuá, 1993). Another weak 
point of this system is that external resources are not involved in development, 
which may slow down technology innovation and adaptation to market trends. It 
has several temporary technical solutions and the quality of devices and applica-
tions is unstable. Delivery and transportation services with telematic networks offer 
the largest development potentials because the flow of communication and infor-
mation on networks is a very important constituent of the Third Italy model (Conti, 
1993). 
5.4  The programmes of rural areas57
Several authors are criticising the argument of Bangemann Report saying that the 
integration of SMEs into a wide area network will bring development chances for 
rural areas. Wide area networks alone will not increase entrepreneurship activities 
or innovativeness. They re calling for local-source based regional policy recognis-
ing the potential links to global and national trends and regarding ITTs as very im-
portant instruments of necessary changes. Sweeney (in: de Castro et al. 1995) de-
fines three different political philosophies: 
•  The building of technology culture environment 
•  Providing direct assistance to entrepreneurs 
•  Lifting all the barriers to the foundation and operation of businesses 
What is common in all the three elements is that they do not stand exclusively 
on market elements but they demand active intervention of the state with varying 
intensity.  
                                                      
57 The term rural defines such areas that have been left without large central cities and have far lower 
urban population than the national average (70% in the EU, 63% in Hungary). 
 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
According to Grimes  (1992), beyond theoretical issues very few researches 
have been carried out on the impact of ITTs on rural areas. Theoretical implications 
cover such a wide range of issues, which is questioning their relevance. Technolo-
gies themselves can do nothing, development should stand on a wide social and 
economic basis58. The building of physical infrastructure is only the first step as 
ITTs are permissive technologies and the major problem is the slow diffusion of 
their applications. When analysing impacts, more attention should be paid for de-
mand-oriented approach. The objective is not merely the building of information 
networks but regional level production utilisation, the transformation of informa-
tion and the implantation of technologies into economic development. 
The delivery of ITTS to local entrepreneurs is the most acute problem. This 
problem requires the quick building of networks. Tele-colonisation (Dillmann et al. 
1988) is a major threat here, as external agents simply may utilise and exploit the 
local resources for their own purposes. The mere adoption of ITTs guarantees nei-
ther economic nor the intensification of social cohesion but may generate several 
adverse complementary effects (the out-migration of intelligence jobs, slowly de-
clining professional culture and competence) (Warf–Grimes, 1997). The develop-
ment of rural areas is hindered by their remoteness from markets, policy-makers 
and information sources, which cannot fully be eliminated by the application of 
ITTs. The question how to create and maintain such advanced services that can 
utilise the potential advantages of new technologies in a relatively small area of 
market59 seems to be the key problem here (Graham, 1991). 
Setting up and maintaining various links to large entrepreneurial networks 
seems to be one alternative for the integration of small-scale businesses. This for-
mation is locking small business organisations into a large corporation and exclu-
sion from this organisation is automatically coupled with isolation from potential 
markets (Morgan, 1997). The use of greater autonomy, the establishment of local-
oriented SME networks on regional level, in which various supporting facilities are 
provided for local entrepreneurs, is another alternative solution. ITTs – though in-
directly – may eliminate the disadvantages of remoteness but the return of network 
building and operation costs takes very long time. Especially the early period of 
ITT investments needs an active government investment and assistance policy. 
Future scenarios expect that fewer areas will be utilised on greater intensity or 
the same areas will be utilised with lessening efficiency. In both cases the value of 
natural biosphere and recreation areas will increase but the first results are seen in 
core regions, the level of decentralisation potential is high! Rural areas are badly in 
                                                      
58 One of the key problems here is the representation of the periphery’s interests in decision-making! 
59 The disadvantages of rural areas are defined by Grimes  (1992) as follows: geographical, social, 
cultural distance from the core, difficulties in the access to information resources, poor public 
services, small number of re-training programmes, the absence of professional training facilities 
and of institutional relations. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
need of new economic sectors for counterbalancing the lessening weight of agri-
culture. From the potential sectors of rural economy recreation, cultural facilities, 
social cohesion, the traditions of folk and handicraft industries or other business 
activities may be mentioned but in all cases the degree of diversification is de-
pending on the attractive force of local economy (Turnock–Nagy, 1998). 
5.5 Peripheral60 areas 
The difference between potentials and realities is the most perceivable on the level 
of peripheries. New technologies are providing greater chances for joining the 
global information economy, they are urging for the development of information 
intensive activities and for a more optimal utilisation of regional resources and 
competitive advantages. In several cases the spectacular practical results are ac-
companied by such negative tendencies as the region’s quickly growing external 
dependency, the death of weak local economy, the lost chances of endogen re-
source-based development, the disintegration of local information channels, the 
weakening of social cohesion and the erosion of local society.  
Müderspracher (1990), in his research on the application of ITTs in peripheries, 
has pointed out that in the majority of cases they were characterised by the ration-
alisation of workplaces, cost reduction and by the decreasing volume of invest-
ments. Peripheries are already in time-delay (“time-lag”) in the building of their 
networks and for this reason information behaviours show a follow-up pattern both 
on individual and community levels. In developing or underdeveloped countries 
this time-lag may even be greater and this weakens the impacts of decentralisation. 
The reasons of time-lag are explained by the very rigid socio-economic conditions 
and by political power structures. In extreme cases this process may result in eco-
nomic dependency and the loss of management and directive functions. Disadvan-
tageous economic structures do not favour for reaching a critical mass necessary 
for achieving success in the market. The low level of co-operation skills, the ab-
sence of integration opportunities, low accommodation, poor human resources, na-
tional and ethnic features, social traditions and value system are all resulting an 
ultimately handicapped situation. 
The potentials that ITTs offer in opening new markets, economic prospects and 
in easing the site location disadvantages are being utilised only at a moderate level 
now as the home – so far protected – markets will be opened for external competi-
tions and with the help of ITT networks it will be easier to find those regions that 
offer the greatest site location advantages (Rieper,  1990). The dependency from 
                                                      
60 The term periphery defines such areas that are located at least at a distance of 150 km from major 
decision centres. 
 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
core areas and decision centres will increase.61 In the absence of a strategic devel-
opment policy time-delay will increase and peripheries will lose all of their chances 
to join such integrations that will bring success for them. Government policy 
should not be restricted only to the building of networks. Assistance should be 
given to their utilisation as well. The instruments of assistance may be as follows: 
the distribution of end-user devices, payment advantages, leasing constructions, the 
general reform of the training system, the introduction of a degressive or at least 
neutral user tariff system.62 The receptivity of rural areas should increase, the in-
formation flow between core areas and peripheries should become bi-directional 
(Nahrada, 1995). 
Local governments and regional authorities have key role in tackling down the 
acute shortages of data. On the one hand decentralised data collection, recording 
and processing are cheaper than centralised, on the other hand regional, local in-
formation demands will be satisfied on local level and local governments also may 
come to the market as information service providers. Through the utilisation of the 
logistic potential of ITTs the costs of some public services may be reduced (by 
running municipal associations, by providing services for sporadic settlement dis-
tricts) (see: Cities and new technologies, 1992). 
Among regional development organisations those non-profit institutions that are 
specialised for the distribution of telematic culture (telerooms, telecottages, tele-
centres, small teleports) may initiate several positive changes (Maskell et al. 1998): 
•  In weak regions they can facilitate economic restructuring e.g. by starting 
modern services 
•  For telecommunication companies they provide good technical facilities and 
create the image of high-tech company site 
•  For outer world they show the image of a self-conscious regional govern-
ment, which is an active initiative of economic and technical development 
•  They can create a good atmosphere for investors. 
The positive impacts of this process can most easily be assessed by the situation 
of businesses, as for them ITTs create chances for restructuring, building partner-
ship and reaching a critical mass position in the market. The reinforcement of local 
producers’ basis and the increase of adaptation potentials are the keys to success to 
successful adaptation. Adaptation and closing-up are starting with the introduction 
of advanced but not top-level technologies because a too fast step in technological 
modernisation may hinder the manifestation of additional synergic effects. Man-
                                                      
61 In other words the periphery’s economy functionally depends on the core area’s economy. 
62 Even a neutral tariff system may increase polarisation. While in Great Britain one-third of business 
organisations are available by phone from London on local call rates, only 2% are them available 
from North England ! (Harrison,  1990). 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
agement competence, the motivation of actors, the easy to follow innovation be-
haviour model and regional policy are very important in this process (Harrison, 
1990). ITTs are open structures and knowledge is spreading very fast through the 
existing networks. They bring real chances to improve the lagging-behind position 
of closing-up territories. The functional division and spatial separation big compa-
nies may further improve the chances of peripheries. One industrial producer with 
some business service companies may have an enormous impact on its region’s 
economic prosperity. 
The extension of the core region’s communication zone is increasing the core 
settlement’s economic prosperity and sucking out the periphery’s resources (“in-
formation drain” or “information colonisation”
). If a periphery is attached to a 
strong information centre it will give up its own information relation system, which 
created the periphery’s individual image, its less developed but intact structure.  By 
directing the information flow towards itself, the centre may break up the tradi-
tional channels of communication and may stop the periphery’s natural develop-
ment process. 
The incoming large amount of information will generate spectacular economic 
development but this will quickly be over and the region’s economy will soon be 
dependant on external forces (trapped in effect). Since that point the periphery will 
be interested in the long-term prosperity and dynamic development of the core re-
gion because it is the periphery that will primarily be affected by a crisis situation. 
The exploration of the periphery may be a serious threat because the so far specific 
for the region knowledge and skills (traditional handicraft technologies) would be 
“exported” into a different region, which later on would turn out as a competitor 
against the region’s internal production (Tiner, 1992). 
According to Müdespacher (1990) the spatial diffusion of telematics within a 
closed region may be outlined by the following pattern: 
1  The preparation of technology accommodation (labour market training, cor-
porate structure) projects; 
2  The establishment of a telematic centre (the involvement of professional 
consulting firms, regional data bank, videotext services, hardware and soft-
ware development centres, telework centres, tourist information systems, 
economic sector information centres etc.); 
3  The promotion of innovation and the accommodation of innovation (know-
how accessibility, partnerships inter-firm networks); 
4  Technology transfer centre; 
5  The improvement of adaptation skills and capabilities within business or-
ganisations. 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Final remarks 
Apart from the results having been discussed in chapters dealing with the correla-
tion between the development of information infrastructure and society and re-
gional development it can be concluded that regional and local development with 
regional policy, as a whole, should have greater role in the overall development of 
the information sector. A greater compatibility with the basic principles of Euro-
pean regional policy (subsidiarity, publicity, transparency, partnership) could be 
achieved if the professional competence, the development policy, the planning and 
research policy of regional development – like in the majority of European coun-
tries – would be “equipped” with a wide-spread, well-co-ordinated information 
network. The present programmes of e-Europe as well as e-Hungary10 so far have 
been quite “intact” from spatial issues, and from their impacts they are disregarding 
such elements of this sector that may ignite completely different processes from the 
traditional trend of development. 
Regional development as a complex economic, social and planning system 
highly deserves to have a more important role within the programmes of e-Hungary 
(NIIF Program, 1999). There is a large necessity for regional portals, and through 
the activity of Regional Development Boards high priority should be attached to 
the issues of regional development within Intelligent Region, county and micro-
regional development programmes (Varga, 2000a). Without this not only regional 
development as a discipline with handicapped areas would be “excluded” from 
ICT-initiated development processes but also “locality standing partly against 
globality” would be marginalized and this trend of regional development would not 
comply with the practice of the West European regions. 
On the basis of the present intensity of building information and telecommuni-
cation infrastructure we have good reasons to assume that within the next few years 
Hungarian telecommunication service providers will ensure good technical back-
ground and services for their customers in all primary districts of Hungary. For this 
reason it is not technical infrastructure but rather the adaptability of human factors 
that will determine future development perspectives (Fehér–Varga, 2002). Thus, a 
region’s development chances will depend on such factors as the education of its 
population, their special skills and their receptivity for the new. (Rechnitzer, 2003; 
What is future? 2001). 
As it is seen, the potential spatial development level of the ICT sector may be a 
smaller problem factor of future development than we have seen it in case of tradi-
tional factors. It is clear, from research results that “spatial diffusion” of informa-
tion technology innovations and applications – having gone through an urban con-
centration, a typical phenomenon of the 1990s is getting more and more differenti-
                                                      
10 Europe’s road..., 1995; e-Europe, 1999, or in Hungary NIIF, 1996; NIIF Program, 1999; NIS, 1999. 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
ated, which – has become a significant process even in socially and economically 
handicapped areas. From this we can conclude that these regions have recognised 
the importance of the potentials of the new information-communication technolo-
gies and they actively use them to increase their economic performance and re-
gional competitiveness. 
Local governments and regional authorities have key role in tackling down the 
acute shortages of data. On the one hand decentralised data collection, recording 
and processing are cheaper than centralised, on the other hand regional, local in-
formation demands will be satisfied on local level and local governments also may 
come to the market as information service providers. Through the utilisation of the 
logistic potential of ITTs the costs of some public services may be reduced (by 
running municipal associations, by providing services for sporadic settlement dis-
tricts). 
Among regional development organisations those non-profit institutions that are 
specialised for the distribution of telematic culture (telerooms, telecottages, tele-
centres, small teleports) may initiate several positive changes: 
•  In weak regions they can facilitate economic restructuring e.g. by starting 
modern services 
•  For telecommunication companies they provide good technical facilities and 
create the image of high-tech company site 
•  For outer world they show the image of a self-conscious regional govern-
ment, which is an active initiative of economic and technical development 
•  They can create a good atmosphere for investors. 
The great challenge now is whether partnership members will get ready within a 
short time for the age of the information society (Tiner,  1998). From socio-
economic aspects we consider that greater assistance should be given to civil 
organisations, SMEs and municipalities (being at present potential sub-
governmental elements). (See: Szarvák, 2000; Szarvák–Szoboszlai, 2002). Regional 
development programmes with elements that can directly be linked to documents 
of intelligent regional development should not only be prepared for macro 
(regional, state) levels but also for micro (micro-regional, local) levels. The 
common elements of intelligent regional development programmes are as follows 
(Fehér–Varga, 2002): 
1  Virtual county programme the central embedded element of Intelligent Re-
gion projects 
2 E-administration programme 
3  Technology development zone programme 
4 E-content projects 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
5 E-economy projects 
−  The establishment of virtual companies. E-commerce project. 
−  The integration of a micro-region or county into e-commerce and 
e-business has key importance. 
−  Distance health service projects 
−  The preparation of projects associated with health information systems, 
health service networks and distance therapy 
−  The organisation of electronic markets 
−  Running an e-economic portal as a part of a commercial portal within the 
framework of the planned portal system. 
−  County-level e-economic non-profit company. 
−  Digital cottages, digital flats programme. 
6  House of intelligence, telecottage programmes 
7 Intelligent micro-regions 
8  Public education projects 
9 Distance education centres 
10 Internet-based TV and radio channels (regional information and media sys-
tem) 
In the early 1990s significant quantitative and qualitative development started in 
Hungarian telecommunication and information infrastructure. The establishment of 
telecommunication concessions accelerated this process. Today there are no sig-
nificant differences between Hungary and Western Europe in the digitalisation of 
network, in data transfer capacities and technologies. However we cannot tell the 
same thing about service quality and general provision indicators. Telecommuni-
cation and information companies started the building of their networks in areas 
offering solvent demand and higher than the national average number of business 
organisations. This resulted serious regional disparities in the provision of tele-
communication and information services.  
It is also worth mentioning that the building of the infrastructure of this sector 
requires less financial resources than any other types of linear infrastructure 
(motorway, railway, pipeline, electricity systems). Thus, it may spread more 
quickly and the return of investment costs is also faster. In several counties of 
Hungary (Baranya, Csongrád, Somogy, Borsod-Abaúj-Zemplén etc.) the building 
of telecommunication and information systems and equipment – in comparison to 
other elements (or to the overall development of infrastructure) is faster or has 
more dominance within the general development of the whole infrastructure system 
(Figure 14–15). It is expected and at the same time it is very important that these 
counties both from economic and local-regional development reasons will attach 
higher priority to their information technology issues in their future development 
concepts. But for all that, the regions of Central Hungary and Transdanubia have 
90   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
better provision indicators than those on the eastern side of river Danube (Table 
18a–d – Annex
). As it is seen, with the exception of Csongrád, all the East-
Hungarian counties are unable to mobilise such economic and social forces that 
would increase communication activities and generate larger development projects 
than the national average
. Qualitative development in the service provision of the 
eastern part of Hungary can only be achieved when the region’s “general” 
economic and social problems have been tackled.  
The improvement of the accessibility of East-Hungary (in the dimensions of 
transportation, telecommunication and information) would build several economic 
relations, which would also facilitate the intensification of communication. More 
attention should be paid for local-regional and cross-border cooperation and heavy 
investments are needed for culture and education because these sectors will provide 
the human capital for investments and for the region’s general economic develop-
ment.  
The present volume and quality of R&D and higher education are one of the 
most critical issues in the building of information society. R&D organisations are 
necessary not only for innovation but in several cases new products and applica-
tions come out from innovation oriented environment, they are tested, improved 
there and some learning process is also associated with these institutions. 
The political and economic changes of the early 1990s put the Hungarian re-
search-development sector into a difficult situation. Several – mostly technical pro-
filed – research organisations were closed down and the number of researches also 
reduced drastically. It was the research units of companies that were mostly af-
fected by rationalisation: between 1988 and 1994 the staff of R&D companies de-
creased by more than 60%. 
The funding resources of R&D had gone through a similar process. In year 
1994 the total running expenses of the R&D sector were by 3.5% less of the values 
of year 1988. Due to poor economic conditions, the share of R&D within the GDP 
was continuously decreasing (from the 2.4% average between the years of 1983-87 
it was going down at first to the value of 1.6% (1992) then to an average of 1.03% 
between 1992–1994). 
Although after 1995 the economy was in a recovery period, the share of R&D 
resources still remained on low values (an average of 0.7% between 1995–1999). 
By this the government’s financial assistance to the Hungarian R&D sector was 
lagging behind the average European 2–3%, not only in quantitative but also in 
proportional aspects. This trend changed in 2000 and 2001 and the volume of R&D 
funding resources, compared to the previous years, significantly increased, ap-
proaching 1% of the GDP, the first time since 1994. 
Considering that in the period of building an information and knowledge-based 
society, the share of human capital in the value of products and services, we are on 
 
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Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
the opinion that a further increase of R&D funding resources is essential to main-
tain the present level of innovative potentials and economic competitiveness. 
Greater attention should be paid for reducing the extremely high spatial con-
centration of R&D activities (46% of the total research organisations, 56% of total 
researchers and 65% of the total research funding resources are located in Buda-
pest) and to the development and support of such research organisations – their 
number and dispersion is very low today – that are operating outside the 
organisational framework of university campuses. 
As it is shown by statistical data (KSH, Kutatás-Fejlesztés, 2000), differences in 
R&D potentials and R&D development resources between counties with and with-
out significant university campuses (Tolna, Nógrád, Komárom-Esztergom) are 
great – in some cases higher than 100-fold. In such a situation it can be prognosti-
cated that that these territories will be excluded from “information-generated de-
velopment” and the application of new results and services because their lower ad-
aptation skills may prevent them from the successful application of competitive-
ness-oriented innovations. 
The  spatial distribution of the institutes of higher education is showing less 
dramatic extremes than the research-development sector. Fundamental changes 
have been carried out within the higher education system since the change of the 
regime. The number of students, institutes and departments increased the most sig-
nificantly (Table 18a–d – Annex). However most cities have no universities or col-
leges or if have they are just a faculty, which cannot cover all the higher education 
demands of the city with its environment. Limited chances for finding a job and 
low salaries at the their permanent residential area make students look for a job in 
education centres or in other, economically prospering regions. This phenomenon 
is an additional source of backwardness for areas (Nógrád, Borsod-Abaúj-Zem-
plén, Békés and Tolna counties) being involved in a continuous battle against their 
existing economic and social problems. 
Losing a part of the young and ambitious intelligence may have serious impacts 
on the building of information society. The area, involved in this problem, will lose 
those well-educated intelligence who – through their knowledge and personal rela-
tions – would be the most intensive users of advanced information technology and 
applications and through their work and business activities would the most actively 
contribute to changing the region’s economy into a prosperous one (qualitative 
migration deficit).
 
What is making this problem worse is that technical universities and colleges 
are almost totally missing from several regions. (Southern Hungarian Plain, North 
Hungarian Plain). Without them it seems to be impossible to guarantee a successful 
industrial and economic development for a long-term perspective.  
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
 
 

 
 
 
 
 
 
ANNEX 
 
93 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 2 
 
Figure 7 
 
95 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
 
96   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 10 
The speed of data-communication in national R&D networks (2001)* 
Network Country 
Speed 
Network Country 
Speed 
(Mbps) 
(Mbps) 
BELNET Belgium 
2500 
ARNES  Slovenia 
310 
DFN Germany 
2500 
EENET 
Estonia  155 
HUNGARNET Hungary 
2500 
FCCN 
Portugal 
155 
INFN Italy 
2500 
HEANET 
Ireland  155 
NORDUNET Scandinavia 
2500  RESTENA Luxemburg 
155 
POL-34 Poland 
2500 
SANET Slovakia  155 
REDIRIS Spain 
2500 IUCC 
Israel 
45 
RENATER France 
2500  LATNET  Latvia 
45 
SURFNET The 
Netherlands 
2500 LITNET  Lithuania 
45 
SWITCH Switzerland  2500 
CARNET Croatia 
34 
UKERNA 
United Kingdom 
2500 
CY NET 
Cyprus 
34 
CESNET Czech 
Republic 
1240 
ROEDUNET 
Rumania 
34 
GRNET Greece 
1240 
UNICOM-B 
Bulgaria 
34 
ACONET Austria 
620  
 
* After the start of GEANT project. 
Source: NIIF 2001. 
Table 14 
The number of Internet users in some European countries 
Country 
Date 
Number of users
In % of 
Source 
(million) 
inhabitants 
Austria 
2000. 10. 
3.0 
36.9 
Austria Internet Monitor 
Belgium 2000. 
09. 
2.7  26.36 Nielsen 
NetRatings 
Czech Rep. 
2000. 12. 
1.1 
10.70 
VIP park.cz 
Denmark 2001. 
06. 
2.93 54.74 Nielsen 
NetRatings 
Estonia 2000. 
12. 
0,366 
25.57 
ITU 
Finland 2000. 
08. 
2.27 
43.93 Talaustukimus 
Oy 
France 2001. 
08. 
11.7 
19.65 
SESSI 
Germany 2001. 
08. 
28.64 34.49 Nielsen 
NetRatings 
Greece 
1999. 10. 
1.33 
12.42 
IDC Research 
Hungary 2001. 
04. 
1.2  11.87 
GfK 
Hungary 2001. 
11. 
1.85 17.62 
GfK 
Iceland 2000. 
12. 
0,168 
60.79 
ITU 
Ireland 2001. 
07. 
1.25 
32.54 
Nielsen NetRatings 
Italy 
2001. 08. 
19.25 
33.37 
Nielsen NetRatings 
 
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Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Continued form Table 14 
Country 
Date 
Number of users
In % of 
Source 
(million) 
inhabitants 
The Netherlands 
2000. 08. 
8.70 
54.44 
Nielsen NetRatings 
Norway 
2001. 07. 
2.45 
54.40 
Nielsen NetRatings 
Poland 
2001. 04. 
3.50 
9.06 
ARC Rynek Opinia 
Portugal 2000. 
12. 
2.00 
19.90 
Inst. Das Com. De Portugal 
Russia 2000. 
12. 
9.20 
6.30 
Monitoring.ru 
Slovakia 1999. 
12. 
0.70 
12.94 
ITU 
Spain 
2001. 07. 
7.38 
18.43 
Nielsen NetRatings 
Sweden 
2000. 11. 
5.64 
63.55 
Nielsen NetRatings 
Switzerland 2001. 
07.  3.41  46.82 Nielsen 
NetRatings 
Turkey 
2000. 05. 
2.00 
3.05 
IBS Research 
United Kingdom 
2001. 07. 
33.00 
55.32 
Jupiter MMXI 
Source: http://www.nua.ie/surveys/how_many_online/index.html. 
Figure 8 
The costs of Internet using in 2000, in the countries of OECD 
(30 hours outside of „peak-hours”, USD, in PPP, incl. VAT) 
90
80
70
60
50
40
30
20
10
0
a
d
r
e
n
USA
la
eland
Japan
I
c
-
Ko
Canada
Mexico
Turkey
Po
t
h
Australia
Hungary
u
-average
U
So
E
Switzerland
CD-average
Czech Rep.
New-Zealand
E
O
Subscibing
Using phone lines
Cost for Internet provider
 
Source: OECD 2000. 
98   

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 9 
Changing rate in number of Internet-hosts per 1000 inhabitants in some 
European countries (Hungary = 100%) 
1000
10
1993.jan. 1994.jan. 1995.jan. 1996.jan. 1997.jan. 1998.jan. 1999.jan. 2000.jan. 2001.jan. 2002. jan.
Austria
EU-average
Ireland
Germany
Czech Rep.
Hungary
Poland
 
 
 
 
 
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 
Hungary 
0,06 0,33 0,85 1,72 3,02 7,02 9,45 11,88 10,36 16,64 
Source: Imre Kanalas calculation in the base of RIPE NCC data. 
 
99 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Figure 10 
Number of Internet-hosts in Hungary (1991–2001) 
180000
160 438
160000
140000
119 642
104 415
120000
95 931
100000
71 296
80000
60000
30 632
40000
17 456
20000
25
25
645 3 324 8 661
0
1991. 1992. 1993. 1994. 1995. 1996. 1997. 1998. 1999. 2000. 2001. 2001.
nov.
jan.
jan.
jan.
jan.
jan.
jan.
jan.
jan. 
jan.
jan.
dec.
Source: RIPE NCC. 
 
 
 
Figure 11 
 Changing number of domain-name registrations (1991–2002) 
60000
48192
50000
40000
29528
30000
11833
20000
10000
3
3
15
43
116
388
1080 3796 7059
0
1991. 1992. 1993. 1994. 1995. 1996. 1997. 1998. 1999. 2000. 2001. 2002.
nov.
jan.
jan.
jan.
jan.
jan.
jan.
jan.
jan. 
jan.
jan.
jan.
Number of the domain registrations
 Source: http://www.ripe.net/ripencc/pub-services/stats/hostcount/index.html 
100  

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 15 
 Registered domain-name servers by counties and regions 
County/Region 
Number of servers 
In percent of all  
Change of rates 
(db) 
Hungarian servers (%)
between 1998–2000 
 
1998 2001 1998 2001 
(in %) 
Bács-Kiskun 77 
1,216 
1.47 
1.82 
0.35 
Békés  
49 
,664 
0.93 
0.99 
0.06 
Csongrád 141 
1,852 
2.68 
2.75 
0.07 
South Great Plain  
267 
3,732 
5.08 
5.56 
0.48 
Baranya  
95 
1,455 
1.81 
2.17 
0.36 
Somogy 59 
697 
1.13 
1.04 
–0.09 
Tolna 31 
366 
0.58 
0.55 
–0.03 
South Transdanubia 
185 
2,518 
3.52 
3.76 
 0.24 
Hajdú-Bihar 103 
1,203 
1.95 
1.79 
–0.16 
Jász-Nagykun-Szolnok 53 798 
1.00 
1.19  0.19 
Szabolcs-Szatmár-Bereg 42  969 0.79 1.45 
0.66 
North Great Plain 
198 
2,970 
3.74 
4.43 
0.69 
Fejér 115 
1,265 
2.19 
1.88 
–0.31 
Komárom-Esztergom 62 
768 
1.17 
1.14 –0.03 
Veszprém 68 
1,162 
1.29 
1.74 
0.45 
Central Transdanubia 
245 
3,195 
4.65 
4.76 
0.11 
Borsod-Abaúj-Zemplén 79 1,015 
1.51 
1.52 
0.01 
Heves 53 
841 
1.00 
1.25 
0.25 
Nógrád  
29 
373 
0.56 
0.55 
–0.01 
North Hungary 
161 
2,229 
3.07 
3.32 
0.25 
Budapest 3,773 
43,834 
71.67 
65.25 
–6.42 
Pest 232 
5,612 
4.40 
8.35 
3.95 
Central Hungary 
4,005 49,446 76.07 73.60 
–2.47 
Győr-Moson-Sopron  
117 
1,609 
2.23 
2.39 
0.16 
Vas 37 
738 
0.71 
1.09 
0.38 
Zala 49 
738 
0.93 
1.09 
0.16 
West Transdanubia 
203 
3,085 
3.87 
4.57 
0.70 
Hungary  
5,264 
67,175 100.00 100.00 
0.00 
Source: Hungarnet Egyesület, 2001. 
 
 
101 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 17 
102  

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 18a 
 
103 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 18b 
 
104  

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
18c 
 
 
105 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
18c-2 
 
106  

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
18d 
 
 
107 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
18d-2 
 
108  

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
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Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
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Ter Heide, H. 1990: The spatial significance of technological change: introduction. In: NGS 
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114  

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 17 
Main categories of domain-name owners by counties (2001) 
Counties Administration
 
 
NGOs
 
Other
Enterprises 
 
Cultural
R&D 
Individual 
Educational 
(central, 
institutions  institutions 
owners 
institutions 
regional, local)
Bács-Kiskun 37 
19 
83
 
 
807
 
9
 
3
250 
 
8
Békés 35
 
 
14

477 


111
 
 
8
Csongrád 29 
45 
58 
1,130 

11 
558
 
 
17
Barany  
a
34 
28 
28 
1,049 


296
 
 
11
Somogy 28 
16 
54 
412 


175
 
 
6
 
Tolna
16
 
 
11
18
 
 
254


61
 
 
3
 
Hajdú-Bihar
28 
26 
21
 
 
894
 
2
 
1
214
 
 
17
Jász-Nagykun-Sz
 
olnok
 
24
 
8
 
19
 
582
 
5
 
2
 
150

 
Szabolcs-Szatmár-Bereg
 
18
 
21
 
10
 
775
 
1
 
1
132  11 
Fejér 30
 
 
39
46
 
 
925


205
 
 
12
Komárom-Esztergom 33 
14 
11 
586 2 0 114 8 
Veszprém 52 
29 
65 
743 


254
 
 
8
Borsod-Abaúj-Zemplén 32  28 33 728  7  1  176  10 
 
Heves
23
 
 
303
11 
382 


107
 
 
12
Nógrád 11 
14 

177 


156
 
 
5
Budapest 577 
1,258 
967 
34,837 
55 
137 
5,821
 
 
182
 
Pest
73
 
 
67
209
 
 
4,275

5
 
 
953 
22
Győ
 
r-Moson-Sopron
 
27
 
21
 
50
 
1,252
 
4
 
1
 
234
 
20
 
Vas
56
 
 
17
23
 
 
 
518
5
2
 
 
 
109
8
 
Zala
45
 
 
10
20
 
 
498

1
 
 
155 
7
Hungary altogether 
1,208 
1,988 
1,740 
51,301 
149 
175 
10,231 
383 
Source: Hungarnet Egyesület, 2001. 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 18a 
Rank of counties I. – Demography, Employment, Housing 
Region County 
Number of
 
 
Change in 
Number 
Rate of service  People per 
Rate of 
inhabitants 
number of 
of 
sector in 
one flat 
newly built 
inhabitants 
employees 
employment 
houses 
 
 
1990 
 
2001
 
1990–2001
1999 
1999 
1999  1990–1999 

Central Hungary 
Budapest 

20   
1
 
1
 
1
 
18
Central Hungary 
Pest 





20 

Central Transdanubia  Fejér 
10 



18 
18 

Central Transdanubia  Komárom-Esztergom 
16 
16 

15 
19 
16 
19 
Central Transdanubia  Veszprém 
13 
13 

11 
15 
13 

West Transdanubia 
Győr-Sopron-Moson 8 
7  4 
 
4
 
17
 
17
 
6
West Transdanubia 
Vas 
18 
18 
15 
14 
20 
15 

West Transdanubia 
Zala 
17 
17 
17 
16 

10 

South Transdanubia 
Baranya 
11 
11 
12 
10 

11 
14 
South Transdanubia 
Somogy 
14 
14 
16 
17 
11 


South Transdanubia 
Tolna 
19 
19 
10 
19 
16 

13 
North Hungary 
Borsod-Abaúj-Zemplén 


11 


14 
10 
North Hungary 
Heves 
15 
15 
14 
18 
13 

11 
North Hungary 
Nógrád 
20 
20 
18 
20 
14 

20 
North Great Plain 
Hajdú-Bihar 





12 

North Great Plain 
Jász-Nagykun-Szolnok 

10 
13 
12 
12 

16 
North Great Plain 
Szabolcs-S
 
zatmár-Bereg
 
4
 
4
 
3
 
9
 
2
 
19
 
1
South Great Plain 
Bács-Kiskun 




10 

12 
South Great Plain 
Békés 
12 
12 
19 
13 


17 
South Great Plain 
Csongrád 






15 
Source: National Census 1990, 2001; Statistical Yearbook, Central Statistical Office, 1999. 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 18b 
Rank of counties II. – Economy, Enterprises 
Region County 
GDP/capita 
Change of
 
 
Volume of 
Rate of 
Number of 
Number of 
GDP 
investments  investments entrepreneurs  companies 
in service 
(per 1000 
(per 1000 
sector 
inhabitants)  inhabitants) 
 
 
1994 
1998 
1994–1998 
1999 1999 2000 2000 
Central 
Hungary 
 
Budapest


5 1 1 1 1 
Central Hungary 
Pest 
16 
11 


14 
10 

Central Transdanubia 
Fejér 




18 
14 

Central 
Transdanubia 
 
Komárom-Esztergom
 
10
 
8
 
4
 
8
 
19
 
7
 
6
Central Transdanubia 
Veszprém 
11 


12 
11 

11 
West Transdanubia 
Győ
 
r-Sopron-Moson
 
2
 
3
 
2
 
4
 
17
2 4 
West Transdanubia 
Vas 




13 

13 
West 
Transdanubia
 
 
Zala

 
5
 
10
 
13
 
12
 
3
 
5
South Transdanubia 
Baranya 

10 
12 
11 

12 

South Transdanubia 
Somogy 
15 
18 
19 
18 


12 
South Transdanubia 
Tolna 


17 
17 
20 

14 
 
North 
Hungary
Borsod-Abaúj-Zemplén 
18
 
 
17
 
9
 
3
 
16
 
20
 
15
 
North 
Hungary
 
Heves
17
 
 
13
 
8
 
7
 
15
 
13
 
16
 
North 
Hungary
 
Nógrád
19
 
 
20
 
16
 
20
 
4
 
19
 
19
North Great Plain 
Hajdú-Bihar 

12 
18 


16 
10 
North Great Plain 
Jász-Nagykun-Szolnok 
13 
14 
15 
15 

17 
17 
North Great Plain 
Szabolcs-Szatmár-Bereg
20
 
 
19
 
14
 
10
 
2
 
18
 
18
South Great Plain 
Bács-Kiskun 
14 
15 
13 
14 
10 
11 

South Great Plain 
Békés 
12 
16 
20 
19 

15 
20 
South Great Plain 
Csongrád 


11 
16 



Source: Statictical Yearbook, Central Statistical Office, 1996, 1999, 2000. 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 18c 
Rank of counties III. – Infrastructure, Higher education, R&D sector 
Region County Number of cars  Main road 
Energy con- Length of sew- Rate of flats 
Number of 
(per 1000 
network (per  sumption of 
age network with gas-heat-
students in 
inhabitants) 
100 sq.km)
individuals  (in % of water  ing system 
higher educa-
system) 
tion (per 10000 
inhabitants) 
 
 
2000 
 
1999
 
1999
 
1999
1999 1999 
Central 
Hungary 
Budapest 
 
1
20   
9
 
1
 
8
 
3
Central 
Hungary 
Pest 
 
3
 
4
 
3
 
4
 
1
 
19
Central 
Transdanubia
 
 
Fejér
 
8
 
12
 
12
 
6
 
5
 
8
Central 
Transdanubia 
 
Komárom-Esztergom
 
9
 
5
 
4
 
2
 
19
 
17
Central 
Transdanubia
 
 
Veszprém
 
7
 
8
 
10
 
14
 
16
 
9
West Transdanubia 
Győ
 
r-Sopron-Moson
 
2
 
3
 
2
 
3
 
17
 
5
West 
Transdanubia
 
 
Vas
 
6
 
1
 
6
 
8
 
13
 
7
West 
Transdanubia
 
 
Zala
 
4
 
2
 
19
 
5
 
9
 
16
South 
Transdanubia
 
 
Baranya
 
12
 
7
 
7
 
11
 
20
 
4
South 
Transdanubia
 
 
Somogy
 
11
 
15
 
18
 
18
 
12
 
15
South 
Transdanubia
 
 
Tolna
 
10
 
14
 
1
 
16
 
18
 
18
North Hungary 
Borsod-Abaúj-
 
20
 
10
 
17
 
15
 
15
 
10
Zemplén 
 
North 
Hungary
 
Heves
 
14
 
11
 
5
 
7
 
2
 
1
 
North 
Hungary
 
Nógrád
 
15
6   
11
 
20
 
14
 
20
North 
Great 
Plain 
Hajdú-Bihar 
18 18 14 12 10  6 
North 
Great 
Plain 
Jász-Nagykun-Szolnok
19 19 15 10  4 11 
North Great Plain 
Szabolcs-Szatmár-
17 9 8 9 11 12 
Bereg 
South 
Great 
Plain 
Bács-Kiskun 
5 16 13 19  7 13 
South 
Great 
Plain
 
 
Békés
16 17 16 17  3 14 
South 
Great 
Plain 
Csongrád 
13 13 20 13  6  2 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
 
Region County 
R&D 
Investments in 
R&D 
Number of 
R&D 
expenditures 
R&D sector 
investments per 
employees in 
employees (in % 
capita 
R&D sector 
of inhabitants) 
 
 
2000 1999 1999 
 
1999
 
1999
Central Hungary 
Budapest 
1   
1
 
5
 
1
 
1
Central 
Hungary 
Pest 
 
4
 
7
 
11
 
5
 
8
Central 
Transdanubia
 
 
Fejér
 
8
12 16 11 10 
Central 
Transdanubia 
 
Komárom-Esztergom
 
18
 
17
 
6
 
16
 
16
Central 
Transdanubia
 
 
Veszprém
6 8 7 8 6 
West Transdanubia 
Győr-Sopron-Moson 
7 3 3 7 5 
West 
Transdanubia
 
 
Vas
17 18 19 14 12 
West 
Transdanubia
 
 
Zala
 
12
 
13
 
13
 
12
 
9
South 
Transdanubia
 
 
Baranya
 
5
 
10
 
17
 
4
 
4
South 
Transdanubia
 
 
Somogy
 
16
 
15
 
9
 
17
 
17
South 
Transdanubia
 
 
Tolna
 
20
 
19
 
8
 
20
 
20
North Hungary 
Borsod-Abaúj-
         
Zemplén 
9
11
15
6
7
North 
Hungary
 
 
Heves
 
15
 
16
 
14
 
13
 
14
North 
Hungary
 
 
Nógrád
 
19
 
20
 
20
 
19
 
19
 
North 
Great Plain 
Hajdú-Bihar 
3 4 10 3 3 
North Great Plain 
Jász-Nagykun-Szolnok
13 


18 
18 
North Great Plain 
Szabolcs-Szatmár-
         
Bereg 
11
14
18
10
13
 
South 
Great Plain 
Bács-Kiskun 
10 2 1 9 11 
South Great Plain 
Békés 



15 
15 
 
South 
Great Plain
 
 
Csongrád
2 5 12 2 2 
Source: Statistical Yearbook, Central Statistical Office, 1999, 2000; Statistical Yearbook of R&D Sector, Central Statistical Office, 1999, 
2000. 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
Table 18d 
Rank of counties IV. – Culture, ICT-sector, Media 
Region County  Rented books 
Member of 
Visitors in 
Number of flats 
Penetration 
from libraries (per 
art-groups 
museums 
connected to 
of main 
1000 inhabitants)
(per 1000 
(per 1000 
CABLE-TV 
phone lines 
inhabitants) 
inhabitants) 
networks 
 
 
1999 
 
1999
 
1999
 
1999
 
2000
Central 
Hungary 
Budapest 
13 20 5 9 1 
Central 
Hungary 
Pest 
 
17
 
17
 
10
 
20
 
6
Central 
Transdanubia
 
 
Fejér
12 16 18  4 11 
Central 
Transdanubia 
Komárom-Esztergom 
16 11 6 1 9 
Central 
Transdanubia
 
 
Veszprém
7 10 2 7 3 
West Transdanubia 
Győr-Sopron-Moson 
18 1 4 6 2 
 
West 
Transdanubia
Vas 
5 7 8 8 4 
West 
Transdanubia
 
 
Zala
8 15 7 2 7 
South 
Transdanubia
 
 
Baranya
15 9 3 3 12 
South 
Transdanubia
 
 
Somogy
3  4 13 12  5 
South 
Transdanubia
 
 
Tolna
20  3 12 11 13 
North Hungary 
Borsod-Abaúj-
9 18 11  5 19 
Zemplén 
North 
Hungary
 
 
Heves
6 2 1 14 10 
North 
Hungary
 
 
Nógrád
19 13 14 15 14 
 
North 
Great Plain 
Hajdú-Bihar 
4 14 15 13 17 
 
North 
Great Plain 
Jász-Nagykun-Szolnok
1 12 20 18 16 
North Great Plain 
Szabolcs-Szatmár-
14 19 17 19 20 
Bereg 
South Great Plain 
Bács-Kiskun 
11 

16 
17 
15 
South Great Plain 
Békés 
10 

19 
16 
18 
South Great Plain 
Csongrád 



10 

 
 

Csatári, Bálint - Kanalas, Imre - Nagy, Gábor - Szarvák, Tibor : 
Regions in Information Society – a Hungarian Case-Study. 
Pécs : Centre for Regional Studies, 2004. 114. p. Discussion Papers, No. 42. 
 
Region County 
Rate of 
Rate of 
Number of 
Number of 
Number of  Rank of county 
primary 
secondary 
telecottages  domain-name 
Internet 
in the media-
schools 
schools 
(per 1000 
servers 
providers 
sector 
connected to  connected to 
inhabitants) 
(per 1000 
SchoolNET-
SchoolNET-
inhabitants) 
network 
network 
 
 
2001 
 
2001
 
2001
 
2001
 
2001
2000 
Central 
Hungary 
Budapest 
 
1
10 20   
1
 
1
 
1
Central 
Hungary 
Pest 
 
3
 
17
 
14
 
2
 
2

Central 
Transdanubia
 
 
Fejér
7 14 15 7 4   
7
Central 
Transdanubia 
Komárom-Esztergom 
 
9
 
13
 
16
 
11
 
9
 
13
Central 
Transdanubia
 
 
Veszprém
19 16 12 6 5 4 
West Transdanubia 
Győr-Sopron-Moson 
11 5 11 4 3 10 
West 
Transdanubia
 
 
Vas
20 6 8 8 7 17 
West 
Transdanubia
 
 
Zala
12  1  1   
10
 
11
 
17
South 
Transdanubia
 
 
Baranya
 
18
8 2 5   
11
 
8
South 
Transdanubia
 
 
Somogy
 
10
 
20
 
3
 
14
 
11
 
11
South 
Transdanubia
 
 
Tolna
8  3  4   
19
 
17
 
16
North Hungary 
Borsod-Abaúj-
 
17
 
15
 
10
 
20
 
11
 
3
Zemplén 
 
North 
Hungary
 
Heves
 
5
 
4
 
19
 
9
 
18
 
15
 
North 
Hungary
 
Nógrád
 
13
 
18
9   
16
 
20
 
20
 
North 
Great Plain 
Hajdú-Bihar 
4 7 7 13 9 9 
North 
Great 
Plain 
Jász-Nagykun-Szolnok
14  9 18 15 18 17 
North Great Plain 
Szabolcs-Szatmár-
15 12  6 18 11 14 
Bereg 
South 
Great 
Plain 
Bács-Kiskun 
16 19 13 12  7  6 
South 
Great 
Plain
 
 
Békés
6 11 17 17  5 11 
 
South 
Great Plain 
Csongrád 
2 2 5 3 11 5 
Source: Statistical Yearbook, Central Statistical Office, 1999, 2000; Ministry of Education, 2002; Telecottage Association, 2002; Hungarnet 
Association, 2001; Média Ász 14. (20
 




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BENKŐNÉ LODNER, Dorottya (ed.) (1988): Environmental Control and Policy: 
Proceedings of the Hungarian–Polish Seminar in the Theoretical 
Problems of Environmental Control and Policy 
OROSZ, Éva (ed.) (1988): Spatial Organisation and Regional Development Papers 
of the 6th Polish–Hungarian geographical Seminar 
DURÓ, Annamária (ed.) (1993): Spatial Research and the Social–Political 
Changes: Papers of the 7th Polish–Hungarian Seminar 
DURÓ, Annamária (ed.) (1999): Spatial Research in Support of the European 
Integration. Proceedings of the 11th Polish–Hungarian Geographical 
Seminar (Mátraháza, Hungary 17–22 September, 1998) 
GÁL, Zoltán (ed.) (2001): Role of the Regions in the Enlarging European Union 
HORVÁTH, Gyula (ed.) (2002): Regional Challenges of the Transition in Bulgaria 
and Hungary 
Discussion Papers 
No. 1 
OROSZ, Éva (1986): Critical Issues in the Development of Hungarian 
Public Health with Special Regard to Spatial Differences 
No. 2 
ENYEDI, György – ZENTAI, Viola (1986): Environmental Policy in 
Hungary 
No. 3  HAJDÚ, Zoltán (1987): Administrative Division and Administrative 
Geography in Hungary 
No. 4 
SIKOS T., Tamás (1987): Investigations of Social Infrastructure in Rural 
Settlements of Borsod County 
No. 5 
HORVÁTH, Gyula (1987): Development of the Regional Management 
of the Economy in East-Central Europe 
No. 6  PÁLNÉ KOVÁCS, Ilona (1988): Chance of Local Independence in 
Hungary 
No. 7 
FARAGÓ, László – HRUBI, László (1988): Development Possibilities of 
Backward Areas in Hungary 
No. 8 
SZÖRÉNYINÉ KUKORELLI, Irén (1990): Role of the Accessibility in 
Development and Functioning of Settlements 
No. 9 
ENYEDI, György (1990): New Basis for Regional and Urban Policies in 
East-Central Europe 
 

Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study
No. 10  RECHNITZER, János (1990): Regional Spread of Computer Technology 
in Hungary  
No. 11  SIKOS T., Tamás (1992): Types of Social Infrastructure in Hungary (to 
be not published) 
No. 12  HORVÁTH, Gyula – HRUBI, László (1992): Restructuring and Regional 
Policy in Hungary 
No. 13  ERDŐSI, Ferenc (1992): Transportation Effects on Spatial Structure of 
Hungary 
No. 14  PÁLNÉ KOVÁCS, Ilona (1992): The Basic Political and Structural Prob-
lems in the Workings of Local Governments in Hungary 
No. 15  PFEIL, Edit (1992): Local Governments and System Change. The Case 
of a Regional Centre 
No. 16  HORVÁTH, Gyula (1992): Culture and Urban Development (The Case 
of Pécs) 
No. 17  HAJDÚ, Zoltán (1993): Settlement Network Development Policy in 
Hungary in the Period of State Socialism (1949–1985) 
No. 18  KOVÁCS, Teréz (1993): Borderland Situation as It Is Seen by a 
Sociologist 
No. 19  HRUBI, L. – KRAFTNÉ SOMOGYI, Gabriella (eds.) (1994): Small and 
medium-sized firms and the role of private industry in Hungary 
No. 20  BENKŐNÉ Lodner, Dorottya (1995): The Legal-Administrative Ques-
tions of Environmental Protection in the Republic of Hungary 
No. 21   ENYEDI, György (1998): Transformation in Central European Postso-
cialist Cities 
No. 22   HAJDÚ, Zoltán (1998): Changes in the Politico-Geographical Position of 
Hungary in the 20th Century 
No. 23  HORVÁTH, Gyula (1998): Regional and Cohesion Policy in Hungary 
No. 24  BUDAY-SÁNTHA, Attila (1998): Sustainable Agricultural Development 
in the Region of the Lake Balaton 
No. 25  LADOS, Mihály (1998): Future Perspective for Local Government 
Finance in Hungary 
No. 26  NAGY, Erika (1999): Fall and Revival of City Centre Retailing: Planning 
an Urban Function in Leicester, Britain 
No. 27  BELUSZKY, Pál (1999): The Hungarian Urban Network at the End of 
the Second Millennium 
No. 28  RÁCZ, Lajos (1999): Climate History of Hungary Since the 16th Century: 
Past, Present and Future 
 

Discussion Papers 2004. No. 42. 
Regions in Information Society – a Hungarian Case-Study
No. 29  RAVE, Simone (1999): Regional Development in Hungary and Its Prepa-
ration for the Structural Funds  
No. 30  BARTA, Györgyi (1999): Industrial Restructuring in the Budapest 
Agglomeration 
No. 31  BARANYI, Béla–BALCSÓK, István–DANCS, László–MEZŐ, Barna 
(1999): Borderland Situation and Peripherality in the North-Eastern  Part 
of the Great Hungarian Plain 
No. 32  RECHNITZER, János (2000): The Features of the Transition of Hun-
gary’s Regional System 
No. 33  MURÁNYI,  István–PÉTER,  Judit–SZARVÁK, Tibor–SZOBOSZLAI, 
Zsolt (2000): Civil Organisations and Regional Identity in the South 
Hungarian Great Plain 
No. 34  KOVÁCS, Teréz (2001): Rural Development in Hungary 
No. 35  PÁLNÉ, Kovács Ilona (2001): Regional Development and Governance in 
Hungary 
No. 36  NAGY, Imre (2001): Cross-Border Co-operation in the Border Region of 
the Southern Great Plain of Hungary 
No. 37  BELUSZKY, Pál (2002): The Spatial Differences of Modernisation in 
Hungary at the Beginning of the 20th Century 
No. 38  BARANYI, Béla (2002): Before Schengen – Ready for Schengen. 
Euroregional Organisations and New Interregional Formations at the 
Eastern Borders of Hungary 
No. 39  KERESZTÉLY, Krisztina (2002): The Role of the State in the Urban 
Development of Budapest 
No. 40  HORVÁTH, Gyula (2002): Report on the Research Results of the Centre 
for Regional Studies of the Hungarian Academy of Sciences 
No. 
41. SZIRMAI, Viktoria–A. GERGELY, András–BARÁTH, Gabriella–
MOLNÁR, Balázs–SZÉPVÖLGYI, Ákos (2003):  The City and its 
Environment: Competition and/or Co-operation? (A Hungarian Case 
Study)