Matav Case

Matav is Hungary’s sole fully integrated telecommunications company that involved in all major telecommunications sectors such as fixed line telephone, cable TV, mobile, Internet, business and residential services in the country. In 2001, The Company’s strategy group has decided to restructure the company into four business areas- business services, residential services, internet and mobile. This restructuring is done so that the company provides more focus and dedicate management teams for these four business areas. Also, The Company is in “retrenchment” period where to maximize the productivity, use of available resources. I think this strategy has been successful for the company to some extent as they focused on the four areas (business services, residential services, internet and mobile) only. Matav has registered a gradual growth after the implementation of this strategy. For example, the company provided 353 telephones lines per fixed-line full time employee in a small company with huge competition when compared to the other best-in-class European companies that have 500 telephone lines per full time employee which was a significant growth. Also, Matav has a growth of 40% in the subscribers that use internet over the past two years. In addition to that, only 2% of population subscribed to their broadband services and within few years when the prices of cables decreases, then they can reach an increase in the number of subscribers by 9% of population.? Matav has one main competitive advantage in the domestic market which is in fixed line business. It has 80% of the fixed-landline market in Hungary and recently they purchased the holdings of emitel which they have three percent. This is the only one that has more competitive advantage it has in the Hungarian telecom market. In addition to that, they have some competitive advantage in mobile segment that has 47 % of the market and they face more competition from Vodafone and pennon companies….

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