Magyar Telekom is deliberately becoming more selective in the system integration market, avoiding low‑value prime‑contract roles and prioritizing projects where it can deliver value with its own competencies and services, Deputy CEO Gonda Gábor said in an interview.
Revenue fell in Q1 but profitability improved
System integration and IT revenues fell by 16 percent in the first quarter. Gonda noted that the sector is inherently volatile and project timing can cause base‑effects. He added that the company’s strategy to decline certain projects has also contributed to lower top‑line figures: tasks the firm would have accepted five to ten years ago are now often turned down. As a result, the corporate segment’s gross profit increased despite lower revenues, due to a higher share of higher‑value services.
State contracts and the post‑4iG market landscape
Gonda emphasized that Magyar Telekom does not want to become dependent on any single actor—even if that actor is public administration. The company does not base its strategy on competitors’ market positions; instead it pursues sustainable growth aligned with shareholder expectations and its own service portfolio. Regarding areas previously dominated by 4iG, he said Telekom does not aim to inherit dominance but will enter spaces where its services match genuine demand in either the private or public sector.
Where Telekom can contribute
The company’s strengths include network planning, construction and operation tied to its core telecom business, sovereign cloud services, cybersecurity, and certain AI solutions. Telekom also has experience in smart buildings, transport IT, energy and digital health projects. Gonda stressed that large projects often require a scale and warranty capacity that smaller firms cannot assume alone, which is why partnerships are common: each party contributes specialist skills while Telekom typically can shoulder greater contractual guarantees.
Cybersecurity and a new regulator
Gonda said much remains to be done on cybersecurity in Hungary. Buying the newest technical equipment alone is insufficient—cyber defence requires constant, near‑real‑time readiness rather than campaign‑style activity. He welcomed efforts that increase domestic companies’ cybersecurity awareness and preparedness and said he would support a new authority if it strengthens national cyber resilience.
Digitalisation of SMEs: financing and service models
The SME sector generally lags in digital maturity, and returns on digital investments usually materialize gradually. Telekom’s approach is to offer flexible, subscription‑style services rather than large upfront CAPEX purchases, lowering the digital entry barrier. Complex solutions once sold as bespoke projects are increasingly available as scalable monthly services while keeping customer data within national borders.
AI infrastructure: sustainability concerns and token cost risk
Gonda warned that the huge global capital flows into AI infrastructure are likely unsustainable. He pointed to multi‑billion dollar investments in datacenter capacity and the rapid technological progress that can render prior investments obsolete—undermining the financial case. A specific risk he highlighted is the unpredictability of token costs: the owners of core AI technology will set access prices, and sharp price increases could erode the efficiency gains delivered by AI. Large enterprises that have started integrating AI are monitoring token costs closely and modelling scenarios where providers raise prices by 10, 20 or even 100 percent.
How Telekom is preparing
The company is experimenting intensively and encourages employees to test new tools, while carefully monitoring token costs. Telekom favors building technology‑agnostic, easily replaceable AI architectures; its scale allows testing multiple technologies in parallel and offering the most competitive option to customers. This flexibility is seen as critical to mitigating exposure if a single provider increases prices drastically.
Europe’s position and Hungary’s opportunity
Gonda described Europe’s situation as worrying: he argued the continent has become an "data colony" in the US–China tech rivalry, lacking a meaningful infrastructural alternative in the global AI build‑out. He recommends that Europe—and Hungary—seek competitive advantage through fast, creative adoption of new technologies and by developing local innovations, such as local language models and AI solutions that can run domestically to reduce exposure.
For Hungary specifically, Gonda believes high‑quality human capital and innovation capacity are the most important levers. He urged making engineering and natural sciences more attractive to young people, arguing that even a small advantage in digital capability can mean real competitiveness in the coming decades.
Closing
Magyar Telekom’s strategy focuses on selective growth and higher‑value services while cautiously preparing for financial and operational risks stemming from the global AI infrastructure build‑out. The company sees local solutions and flexible architectures as key to domestic resilience and competitiveness.
The article’s production was supported by the Hungarian‑language Alrite online dictation and video captioning application.
