Hungarian state becomes major telecoms player with Vodafone acquisition

Vodafone has completed the sale of its Hungarian business to a group consisting of an IT firm and the Hungarian government.

The acquiring parties are Antenna Hungária, which is a subsidiary of 4iG, a major Hungarian IT group, and Corvinus International Investment, the vehicle being used by the Hungarian state in this transaction It will result in the former owning 51% of Vodafone Hungary and the latter 49%. When the deal was first announced last year Vodafone expected to receive 715 billion Hungarian forints but subsequent ’due diligence’ has whittled the final selling price down to 660 billion ($1.7 billion).

“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,” said Vodafone Group’s interim Chief Executive Margherita Della Valle. “The combined entity will increase competition and accelerate investment in the ongoing digitalisation of Hungary.”

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

That remains to be seen. Hungarian PM Viktor Orbán is not known for willingly sharing power and it’s easy to imagine the state’s supposed minority stake resulting in full control of the company.

Regarding increased competition, Orbán is a nationalist and is unlikely to resist the temptation to put his thumb on the public policy scales where it may benefit his new toy, something the other two main MNOs in the country, owned by German and Czech companies, will presumably be wary of. There will be little they can do about it, however, given the levels of government accountability currently allowed in Hungary.

Get the latest news straight to your inbox. Register for the Telecoms.com newsletter here.