BUDAPEST — EVERYONE in Eastern Europe has a story about the phone system, and Hungary is no exception.
Peter Solymosi brought a Budapest flat three years ago, without phone service. Recently he went in to check on the status of his line. ''The clerk told me I could expect it to be installed in 1997, fourth quarter,'' he recalls. ''I asked if I was far down the waiting list. 'Oh, yes, very far,' she said. 'You're No. 3' ''
Then there's the journalist who, when trying to call across Budapest, was frequently connected to an Afrikaner-speaking home in South Africa. University students pass along the addresses of defective phone booths, where you could talk for hours with friends overseas and still get your coin back. Countless hours are spent trying to call to Poland, Russia, or simply across town.
Like so many things in Eastern Europe, the Hungarian phone system is changing - slowly. The postal service surrendered control of the phone network to a newly created state phone company, MATAV, in 1990. In the biggest privatization deal to date, a US-German consortium paid $870 million for a 30 percent of the company, promising improved service that would bring Hungary into the information age. But despite millions of dollars in investment, MATAV is still struggling to correct 40 years of neglect.
''In all the communist countries, the government tried to restrict access to information,'' says Kalman Balla, public relations officer at MATAV. ''Part of this was to neglect the public phone system. This was easy for them because they had their own separate network.'' The state's exclusive network still operates today, connecting state and former party offices, police stations, and the military.
A few years ago, Hungary's phone network consisted of antiquated analog exchanges and unreliable copper lines and cables. One in three phone calls failed, compared with 1 in 20 in Western Europe. And when a connection was made, more often than not the conversation would be overwhelmed by a chorus of static.
Using a fax machine was problematic, while modem communication was often impossible. While MATAV has installed a new digital backbone network, millions of dollars are needed to link it to subscribers. The number of phone lines has nearly doubled to 1.7 million, but that is still only 17 lines for every 100 Hungarians.
Most of the improvement has been in Budapest, which received 90 percent of the newly installed lines to meet the demand of new businesses. But some 700,000 Hungarians are still waiting for phone lines.
This has been anathema to foreign investors and Hungarian business executives alike, who need reliable telecommunications in order to work. Impatient entrepreneurs have bought cellular phones by the millions and talk on them in cars, buses, cafes, even in the hot-spring-fed Turkish bath houses for which Budapest is famous.
''Hungary is now one of, if not the, fastest-growing cellular phone markets in the world,'' says Andrew Bock, regional director for telecommunications for Andersen Consulting. ''These people need reliable phone service or they'd go out of business.''
In the countryside, some villages can only be reached when the post office is open. Line security remains a problem. Most customers don't have itemized phone bills, making it difficult to track down criminals who break into other people's lines to make long-distance calls. MATAV has tried to circumvent criminals by introducing new card-operated phones, but computer hackers are breaking the card codes.
But Mr. Solymosi is still hopeful: The phone company says everyone on the waiting list will have a line by 1998.
Fed up by static and unreliable security on-line, Hungarians are grabbing for cellular phones by the millions.