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By Gergely Szakacs
BUDAPEST, Feb 21 (Reuters) - Deutsche Telekom will invest at least a billion dollars in Hungary over the nextfew years on a nationwide high speed internet network, ChiefExecutive Timotheus Hottges said on Friday.
Hottges and Prime Minister Viktor Orban agreed on Friday togive every Hungarian household access to the broadband networkby 2018, under a deal which also involves government andEuropean Union support.
Deutsche Telekom owns 60 percent of national telecomscompany Magyar Telekom, which competes in mobileservices with Britain's Vodafone Group, Norway's TelenorASA as well as cable group Liberty Global's unit UPC Holding.
"Deutsche Telekom will invest several hundred billionforints in Hungary over the next few years," Hottges told a newsconference.
"Within the right regulatory framework, a framework thatalso includes government and EU support for underdevelopedareas, we are willing and able to develop high-speed broadbandinternet access for all Hungarians."
A spokesman for Magyar Telekom later said that theinvestment plan covers both fixed and mobile broadband services,and that so far about 60 percent of Hungarian households haveaccess to some kind of broadband connection.
Shares in Magyar Telekom were down 5 percent at 326 forintsby 1400 GMT, valuing the company at around 339 billion forints($1.5 billion), after traders said the company had dismissed amarket rumour that it would increase its stake.
Telecommunications is one of several industries, along withenergy and banking to be hit by special taxes since Orban sweptinto power in 2010 as part of his government's drive to cut thenation's budget deficit to European Union limits.
"In the last few years we sometimes felt that the settingwas not as investment-friendly as we had wished and that thedialogue could be improved," Hottges said.
However, following "developments" last year and his talkswith Orban on Friday, Hottges said Deutsche Telekom now lookedahead with "great optimism."
Last year Orban suggested telecoms firms might be able toreduce their tax bills by making investments that supported theeconomy.
In Deutsche Telekom's 20 years in Hungary, Magyar Telekomhas invested 1.8 trillion forints ($8 billion) and with anannual tax bill of 140 billion forints it is among the toptaxpayers, Orban said.
Magyar Telekom's capital expenditure totalled 117.4 billionforints in the first nine months of 2013, boosted by payments torenew its radio spectrum licences both in Hungary and inMacedonia. Its net profit for the first nine months fell by 40percent to 23.2 billion forints.
It employs 12,000 people directly and gives work to another100,000 through suppliers.
Shares in Magyar Telekom were down 3 percent at 332 forintsby 1204 GMT on Friday.
