# Orban tightens hold over telco sector as Vodafone sells Hungarian unit
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-22
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Vodafone to sell Hungarian business, strengthening
Meta Description: Vodafone to sell its Hungarian business to local IT company 4iG and the Hungarian government for $1.8 billion, creating Hungary's second largest telecoms
URL: https://financedigest.com/orban-tightens-hold-over-telco-sector-as-vodafone-sells-hungarian-unithtml

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LONDON/BUDAPEST (Reuters) – Britain’s Vodafone will sell its Hungarian business for 715 billion forints ($1.8 billion) in cash to local IT company 4iG and the Hungarian state, consolidating the hold of Prime Minister Viktor Orban’s government over the telecoms sector.

Orban, in power since 2010, has expanded his nationalist government’s influence in areas such as energy, banking and the media, which it considers strategic, and long harboured plans to tighten its grip over the telecoms sector.

The deal — which does not include Vodafone’s shared services business VOIS — is expected to create Hungary’s second largest telecoms operator. 4iG will hold a [majority 51% stake](https://www.financedigest.com/deutsche-telekom-reaches-majority-stake-in-t-mobile-u-s-ceo.html "Deutsche Telekom reaches majority stake in T-Mobile U.S. – CEO") while the Hungarian state will hold 49%.

The combination of 4iG and Vodafone is a significant step towards building a Hungarian owned national champion in the (Information and [Communications Technology](https://www.financedigest.com/peppermint-technology-revamps-communications-with-via-voice-solution.html "PEPPERMINT TECHNOLOGY REVAMPS COMMUNICATIONS WITH VIA VOICE SOLUTION")) sector,” 4iG said in a statement on Monday.

The [British mobile phone and broadband group said it had agreed non-binding terms with the buyers](https://www.financedigest.com/what-brexit-mean-for-british-buyers-in-spain.html "WHAT BREXIT MEAN FOR BRITISH BUYERS IN SPAIN"), 4iG and state-run Corvinus Zrt.

Minister for [Economic Development Marton Nagy in a statement noted the government’s prior successes with boosting ownership in other strategically important sectors](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector").

Now there is a chance for a Hungarian company, with a state ownership stake, to become a significant player in the [telecoms market](https://www.financedigest.com/telecom-api-market-api-set-to-redefine-telecom-sector-as-telecom-2-0-gets-closer-to-reality.html "Telecom API Market – API Set to Redefine Telecom Sector as Telecom 2.0 Gets Closer to Reality") as well,” he said.

4iG has grown exponentially in recent years, becoming the dominant ICT [group in Hungary through acquisitions](https://www.financedigest.com/incentive-fm-group-announces-latest-strategic-me-acquisition.html "INCENTIVE FM GROUP ANNOUNCES LATEST STRATEGIC M&E ACQUISITION"), lucrative state contracts and growing its existing operations.

[CEO and largest shareholder](https://www.financedigest.com/shareholder-group-iss-backs-barclays-board-over-former-ceo-staley.html "Shareholder group ISS backs Barclays board over former CEO Staley") Gellert Jaszai told Reuters in 2019 that 4iG planned to grow through debt-fuelled acquisitions in Central Europe.

Businessmen close to Hungary’s [ruling Fidesz party have come to dominate several industries as the government](https://www.financedigest.com/italys-rightist-government-tightens-rules-for-migrant-rescues.html "Italy’s rightist government tightens rules for migrant rescues"), which was re-elected for a fourth consecutive term in April, expands its direct involvement in a number of key sectors.

The Hungarian Government has a clear strategy to build a Hungarian owned national champion in the (Information and Communications Technology) [sector,” Vodafone](https://www.financedigest.com/orban-tightens-hold-over-telco-sector-as-vodafone-sells-hungarian-unit-2.html "Orban tightens hold over telco sector as Vodafone sells Hungarian unit") Chief Executive Nick Read said in a statement.

The [sale is expected to be completed by the end](https://www.financedigest.com/eu-approves-law-to-end-sales-of-new-co2-emitting-cars-by-2035.html "EU approves law to end sales of new CO2-emitting cars by 2035") of 2022.

4iG [shares jumped](https://www.financedigest.com/ericssons-provision-for-u-s-probe-hints-of-smaller-fine-shares-jump.html "Ericsson’s provision for U.S. probe hints of smaller fine, shares jump") 9.25% on Monday to trade at 850 forints on the Budapest bourse at 0843 GMT.

($1 = 404.0500 forints)

(Reporting by Pushkala Aripaka in Bengaluru and Sachin Ravikumar in London; Additional reporting by Krisztina Than; Editing by Rashmi Aich and Kirsten Donovan)


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