British multinational telecommunications company Vodafone sold its Hungarian mobile unit to a consortium of a local company and the Hungarian state, the Hungarian company involved in the business, 4iG, announced on Monday.
The value of the transaction is worth HUF 715 billion (€1.75 billion), which is 7.7 times the company’s EBITDA for the business year ending on March 31.
4iG’s telecommunications and IT portfolio, supplemented by Vodafone Hungary, is a significant step in the creation of a national, market-leading infocommunications group.
With the planned acquisition, 4iG Nyrt. will have a 51 percent stake and the Hungarian government will have 49 percent ownership in the second-largest Hungarian telecommunications company.
The acquisition of Vodafone Hungary can fundamentally reorganize the domestic telecommunications market. In addition to wired voice and internet, as well as subscription television and digital terrestrial broadcasting, 4iG is expected to be a serious player in the field of mobile telecommunications after the transaction is closed.
In terms of subscription share, Vodafone is the second-largest player on the Hungarian market, serving more than 3.8 million residential and business subscribers (3 million use its mobile services while fixed services such as household internet access amounts to 800,000 subscribers). The company wrote in a statement that Vodafone Hungary features more than 5 million revenue generating units (RGU) amounting to 3 million mobile phones, 700,000 television, 700,000 broadband Internet units, and 600,000 using wired voice networks in July 2022.
The group created by the planned acquisition may have a total of 7.6 million RGUs by the end of 2022. Hungary Vodafone claims that its digital infrastructure can make 4iG Nyrt. one of the most advanced service providers among domestic wired voice, internet, cable TV, and mobile service providers.
The other two players in the Hungarian telecommunications market are German-owned Telekom and Telenor, which is owned by the Norwegian government. The deal is the biggest transaction since Telekom bought then state-owned Matáv from Hungary in 1995.
The transaction can be completed by the end of 2022 after due diligence by Vodafone Hungary, the signing of the final sales contract and the necessary official procedures.