Regulators have so far generally been hands-off when it comes phasing out 2G/3G, but may need to give a helping hand where consumers are hesitant
Two out of three operators have announced the phase-out of 3G: Hungarian mobile operators will begin phasing out their 3G networks this year. Telenor will be the first in June, followed by Magyar Telekom in the second half of the year. Vodafone will do it depending on market conditions and subscriber needs, but has not yet announced a specific date. In October 2021, following operators’ announcements, the regulator NMHH stepped in to facilitate the process and announced the launch of a scheme to help consumers exchange their 3G handset for a 4G or 5G one.
How will the scheme work? On 14 February, the NMHH started the scheme, for which HUF5bn will be made available. Up to HUF20k (USD63.4) per person will be allocated. This will cover up to 250k devices, and will apply to devices of a maximum value of HUF120k (USD380) meaning that at least 17% the cost of a new device will be covered. The NMHH has enrolled retail outlets in the scheme, where consumers can trade in their old devices. A dedicated website has been created where consumers can find participating stores on a map, and obtain more information about the scheme and about the reasons why the 3G network is being shut down. The scheme will run until 17 July, or until the funds are exhausted. It will also cover 2G devices, although consumers will not be able to trade them in before 9 May so that 3G devices are prioritised.
Some consumers will be difficult to convince: Phasing out 3G in Hungary is not expected to cause significant disruption given the country has a high level of 4G coverage in rural areas (98.2% of households). The proportion of 3G data traffic in the market is also low at around 3% and falling. Motivating consumers to switch represents a challenge in many countries, particularly where customers on older networks are often prepaid customers with little data usage. Operators in other countries have also compensated consumers in some form before phasing out their 2G or 3G networks – e.g. by offering subsidised switching to other technologies or operators. This has been the case in Japan and in South Korea, where operators introduced incentives for customers to migrate such as free devices, discounts, or waiving subscription fees.
