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Telekom Stock’s Price Rose After Withdrawal Of Internet Tax

Tamás Székely 2014.11.03.

Bloomberg reported, that Magyar Telekom Nyrt had risen the most in eight months as Hungarian PM Viktor Orbán’s decision to scrap plans to introduce an Internet tax following protests boosted speculation the company will pay a dividend. The Internet tax plan sparked two of the biggest rallies against Orbán’s administration since the premier returned to power in 2010. The demonstrations made the introduction of the tax “impossible,” Orbán told on state radio last Friday. However, he also said:  “It is necessary to find out where the huge profit from internet services goes and whether parts of it could be kept in Hungary and channeled into the budget.”

Hungary’s largest telecommunications company gained 5.3 percent to 340 forint by the close in Budapest, rebounding from the lowest since May. About 4.2 million shares were traded, almost three times the three-month daily average. The stock led the benchmark BUX index 1 percent higher. Magyar Telekom abandoned payout plans to keep its net-debt ratio in the 30 to 40 percent range after purchasing three mobile frequency blocks in Hungary for 58.7 billion forint in September, it said on 7th of October. Magyar Telekom said earlier this month it does not expect to pay a dividend from 2014 profit.

Telekom, which had 36 percent of all broadband Internet subscriptions in Hungary in August, said in July it would cut as many as 1,700 jobs in the country through the end of next year. The company competes with the local unit of Liberty Global Plc (LBTYA) and Digi Kft. for broadband customers and subsidiaries of Telenor ASA (TEL) and Vodafone Group Plc (VOD) for mobile phone customers. Moreover, Telco Digi has been awarded a licence allowing it to set up Hungary’s fourth mobile telecommunications network, the National Media and Telecommunications Authority (NMHH) said on Thursday. Digi won a 10 MHz block in the 1,800 MHz frequency band in a spectrum tender that wound up earlier in the autumn. The block cost 10 billion forints (EUR  32.4m) for a 10-year concession.

via bloomberg.com and hungarymatters.hu photo: Magyar Telekom Headquarters (telekom.hu)


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