The mobile phone became a sign of protest this week as tens of thousands of Hungarians raised their lit-up smartphones in the air as they marched against the world’s first Internet tax.
The Hungarian government led by Prime Minister Viktor Orban planned to implement a 150 forint per gigabyte tax (about 62 cents). If enacted, the tax would be in addition to Hungary’s current phone tax of 2 forint per minute or text message. The tax has a cap of 700 forints ($2.88) per month for households. In an effort to compromise, the government announced that telcos would pay, not individual users.
This concession did not appear to appease advocates as the first protest on Oct. 26 was followed by an even larger one on Oct. 28 . A protest site on Facebook called “100,000 against the Internet tax” has garnered more than 225,000 “likes.”
Hungary’s biggest telco, Magyar Telekom, which is majority owned by Deutsche Telekom, has come out strongly against the tax.
“Magyar Telekom supports the proposition of the industry players that the government should revoke its plan to launch the tax,” the company said in a statement to The Wall Street Journal.
The company called the plan “drastic” and could result in Internet companies paying 100 billion forints ($412 million) per year in taxes, hindering broadband development in the country. As the biggest player in both Hungary’s mobile and broadband market, Magyar Telekom has a significant investment in the country and recently shelled out 58.65 billion forint ($247.7 million) for several blocks of spectrum in Hungary’s LTE-oriented auction.
Neelie Kroes, the outgoing head of the European Union’s Digital Agenda, also strongly criticized Hungary’s proposed tax, and before the protest she took to Twitter to urge people to action.
“The proposed Internet tax in Hungary is a shame: a shame for users and a shame on the Hungarian government,” she wrote.
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Vodafone investigates possible tax fraud at Ono. The U.K.-based telco launched an investigation and suspended approximately $80.6 million worth of bonuses at its newly acquired Spanish cable company Ono. Tax authorities had started investigating the company nine months before the Vodafone acquisition offer in March. Apparently, Vodafone was not informed of the investigation before the takeover closed in July. Vodafone paid about $10 billion for the company.
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