Creates locally owned national ICT champion
Britain’s Vodafone is to sell its Hungarian business for €1.797 billion (715 billion Hungarian forints) in cash, it said on Monday.
In a release it said it has entered into ‘heads of terms’ with networking service provider 4iG and Corvinus Zrt the Hungarian state holding company in relation to the potential sale of 100% of Vodafone Magyarország Távközlési Zrt (AKA Vodafone Hungary) for a total cash consideration of HUF 715bn (€1.8bn). This represents a multiple of 9.1x Adjusted EBITDAaL for the 12-month period ending 31 March 2022.
Vodafone Hungary in combination with 4iG will become the second biggest operator in mobile and fixed communications with broader ICT capacity. It also supports the Hungarian state’s goal of creating a national ICT champion. The deal will create a locally-owned telecoms leader in the central European country, according to Reuters.
Vodafone chief executive Nick Read said the Hungarian Government has a clear strategy to build a Hungarian-owned national champion in the ICT sector. “This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play a major role in the future growth and development of the sector as a much stronger scaled and fully converged operator,” said Read (pictured)
Vodafone was notable in Hungary for creating the first live video broadcast over 5G in the country, in 2018. The trial used spectrum in the 3.5GHz band. Vodafone at the time was the only provider in the country to hold 5G frequencies. The operator used a standalone infrastructure to carry out the test, comprising a core network and 5G modem, independent of the 4G network, and a base station equipped with a Massive MIMO active antenna.
A year earlier Magyar Telekom and Ericsson claimed to have created the first 5G radio link in Hungary. The national telecoms regulator National Media and Infocommunications Authority (NMHH) began to auction off 5G licenses at the end of 2019. Vodafone used VMware’s full Telco Cloud Platform to standardise its networks across its European markets, including Hungary, so there is a question over how the new independent Hungarian unit will maintain continuity.