Deutsche Telekom

Is Deutsche Telekom lending a helping hand to the Orbán government to suppress media freedom?

Scandals in Hungary often fizzle out, as one of our readers correctly stated, but abroad scandals don’t die so fast. They spread via the international media. This is what happened with the case of Origo, an internet news organ, whose latest editor-in-chief, Gergő Sáling, was forced to resign, most likely for political reasons. Soon enough the deputy editor-in-chief followed suit, and by now practically the whole news team is gone. A fairly large demonstration was organized immediately after the sacking of the editor-in-chief, and more demonstrations are planned for next week.

Yesterday 444.hu, a relatively new internet newspaper, came out with additional information on the case which, if true, isn’t pretty. Origo Zrt. is a subsidiary of Magyar Telekom, which is in turn a subsidiary of Deutsche Telekom, which is partly owned by the German government. 444.hu learned from a high-ranking member of the government that the firing of Gergő Sáling was the result of a deal between Magyar Telekom and the Orbán government.

Kerstin Günther / Source: Portfolio

Kerstin Günther / Source: Portfolio

One of the problems with the Hungarian economy is the preponderance of the state in all facets of economic life, which means that good relations with the government are very important for any company. In 2010 and 2011 relations between Magyar Telekom and the government were strained, mainly because of the extra taxes levied on communications companies. Apparently Hungarian politicians didn’t particularly like the CEO of Magyar Telekom, the American Christopher Mattheisen. Then in April 2013 the post of CEO was split in two, carving out a separate post of chairperson of the board. This new job was created for Kerstin Günther, who was very knowledgeable about Hungary because she began her Telekom career in Budapest in the 1990s. According to 444.hu‘s informer, she was sent to Hungary for the purpose of improving relations between the company and the Orbán government.

The company needed the goodwill of the Hungarian government because it is the government that decides the fates of frequencies that T-Mobil, a large part of Magyar Telekom’s business, uses. In 2013 it was time to renew these frequencies. Their renewal was vital for the company. At the end of the year, the government decided to renew the frequencies of all three cell phone companies operating in Hungary until 2022. For these frequencies the government asked a total of 100 billion forints. Magyar Telekom’s share was approximately 35 billion forints. It is 444.hu‘s claim, based on information received from its source, that Origo’s fate was sealed by the end of 2013. The deal was that Magyar Telekom would get an extension of its frequencies and that in return the management would make sure that Origo plays ball. Apparently, János Lázár “was often unhappy” about some of the articles that appeared on the site about various Fidesz and government wrongdoings, including his own.

According to the informer, Günther and Lázár met even before Günther arrived in Hungary. Lázár apparently showed her a 150-page analysis of the news items that had appeared in Origo and Híradó, the government mouthpiece that provides news to all state radio and television stations. Given Híradó‘s pro-government stance, it’s no wonder that Origo looked “dramatically oppositional.” It seems, however, that Magyar Telekom found the “study” well founded and often referred to it in arguments with Origo.

In the last two years pressure mounted on the internet site, hence the frequent personnel changes at the head of the editorial board. In three years there have been four different editors-in-chief. In government circles it was common knowledge that Lázár believed that “one must do something about RTL Klub and Origo.”

The relationship between Magyar Telekom and the Orbán government is excellent at the moment. In fact, it looks as if Deutsche Telekom will be entrusted with “the government’s comprehensive development of rural broadband access” that will cover the whole country. Or at least this is what János Lázár said in his parliamentary hearing that approved his suitability for the post of minister at the head of the prime minister’s office.

444.hu immediately translated the article into English, and naturally the story was picked up by several important German papers, especially since DPA (Deutsche Presse-Agentur) reported on it. A long and detailed article, not based on the DPA summary, entitled “Under Pressure” appeared in Süddeutsche Zeitung by Cathrin Kahlweit. She operates out of Vienna but knows the Hungarian scene quite well. In the article she reminds her readers that four years ago the controversial media law “drew international protests,”  and says that it seems that the Orbán government is again using “money and new legal provisions to impede critical reporting.” According to her, Deutsche Telekom received a one-billion euro contract from the Hungarian government for the “expansion of the broadband network,” the price of which was the taming of Origo. Deutsche Welle also reported on the attempted censorship by the Orbán government. And naturally, Reporters Without Borders protested as well.

Up to now two opposition politicians, Gergely Karácsony (E14-PM) and András Schiffer (LMP), have written letters to Timotheus Höttges, CEO of Deutsche Telekom, in which both strongly disapproved of the alleged “deal” between Deutsche Telekom and the Hungarian government. Karácsony called the deal unethical and expressed his hope that Deutsche Telekom would not be a partner to such a dirty affair. Surely, he said, Höttges considers freedom of the press a basic right. Schiffer’s letter was equally hard hitting and expressed amazement that a respectable firm operating in a democratic country would lend its name to such shady business.

Deutsche Telekom is washing its hands of the affair. The spokesman for the firm emphasized that they are all for freedom of the press but reiterated that they have nothing to do with personnel changes within Origo, which are the “result of internal restructuring.” I fear that will not be enough.