The Hungarian water utility services experience major changes nowadays. A water utility act, to make up for decades without dedicated regulations, is being drafted. The sector is fragmented, with intricate ownership and property relations and a missing regulation to set the rules and constraints for competition, market and pricing. This article presents the factors that characterise and influence the sector, and outlines the specif- ics of water utility services, as one of the network industries in Hungary. We also take a brief outlook on solutions for market regulation in Europe, the discuss the conclusions that should practically be considered in the course of developing regulations and requirements for the sector