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‘New chapter’ as Vodafone sells Hungarian operation for €1.7bn

Gellért Jászai.jpg

Vodafone has agreed terms to sell its business in Hungary operation to a local IT company and the Hungarian state.

4iG, an IT systems integrator, and the state holding company will together pay €1.7 billion for Vodafone Hungary. The deal is expected to close by the end of January.

4iG called the deal “one of the most significant transactions in the history of Hungarian telecommunications”.

Gellért Jászai (pictured), chairman of 4iG, said: “The acquisition of Vodafone Hungary opens a new chapter in the Hungarian telecommunications market. It is the first info-communications group in almost thirty years that can operate as a Hungarian majority-owned convergent operator.”

Margherita Della Valle, Vodafone Group’s interim CEO, said: “This combination establishes a scaled converged operator across mobile and fixed communications and supports the Hungarian government’s goal of creating a national information and communications technology champion. The combined entity will increase competition and accelerate investment in the ongoing digitalisation of Hungary.”

Jászai added: “The strategic cooperation between the Hungarian state and 4iG in this transaction will not only transform the market but also improve competitiveness and accelerate the digital transformation of the economy.”

Corvinus, the Hungarian state holding company, will take 49% and 4iG, working through its subsidiary Antenna Hungária, will take 51%.

Vodafone Hungary is the second largest telecommunications company on the Hungarian market. 4iG said: “The market-shaping transaction will allow 4iG Group to strengthen its role as a convergent operator in all areas of the market.”

The transaction was announced this morning on the Budapest Stock Exchange.

The purchasers said: “The national group created by the merger of fixed and mobile telecoms portfolios of 4iG group and Vodafone Hungary will reopen the market in numerous service areas and strengthen its role in offering convergent telecoms services.”

4iG’s Antenna Hungária owns radio and television services. It undertakes the design, construction and operation of outdoor and indoor WiFi networks in the 2.4GHz or 5GHz frequency bands, and provides business services. It runs a content delivery networka and a streaming service called Connectmedia.

Vodafone has 800,000 fixed line customers and 3 million mobile customers in Hungary. With the transaction, 4iG and the Hungarian state will acquire Vodafone Hungary’s mobile frequencies, active radio transmission equipment, active antennas and cables, part of the outdoor cabinets, as well as the uplink and optical network serving the towers.

4iG said this morning: “The acquisition of Vodafone Hungary could also significantly reshape the market power balance in Hungary, and the state-of-the-art solutions and innovative technologies will enable 4iG group to play a leading role in the digital transformation of the Hungarian economy.”

Following the closing of the transaction, the combined portfolio of 4iG Group – under the DigiMobil brand – and Vodafone will be the second largest in the mobile voice and internet services market, which is the largest revenue generator.

4iG will be in the top position in fixed line internet services, and will become market leader in the television broadcasting market, it said.