The state to invest in mobile communications giant, Vodafone Hungary

The Hungarian government will contribute towards the domestic ownership of Vodafone Hungary, the Minister of Economy announced on Monday morning.

"Since 2010, each government has always had the goal of strongly increasing the share of Hungarian ownership in sectors of strategic importance for the nation and, if feasible, reaching majority ownership. This government objective has already been achieved in the banking, energy and media sectors, and now there is an opportunity for a major player in the telecommunications market to become partially state-owned."

- the statement, signed by Márton Nagy (Minister for Economic Development) and issued via the MTI news service on Monday morning reads. It is a long-standing government ambition, which could be summed up in a single sentence: where every Hungarian citizen is constantly glued to his or her mobile phone, it is a matter of national sovereignty that mobile operators in the country should not only be owned by Germans, Britons and Czechs but should also include Hungarian ownership.

According to the proposed deal, the Hungarian state would like to acquire Vodafone with 49 percent ownership and 4iG would have 51 percent.

4iG is a stock market listed Hungarian company, which has been a big winner in recent state tenders in the ICT-sector. The key figure in it is Gellért Jászai, and the company has already started to operate abroad (e.g. in Albania) and has also partnered with the Hungarian state through the integration of the Antenna Hungária group.

The Vodafone Group has reached an agreement with 4iG Plc and Corvinus Ltd to sell 100 percent of Vodafone Hungary Telecommunications Ltd (Vodafone Hungary) for a total cash equivalent of 715 billion forints (€1.8 billion) for the enterprise value, Vodafone Group announced on Monday, shortly after Minister Nagy announced the Hungarian state's buy-in of the company.

According to Vodafone CEO Nick Read

"The Hungarian government has a clear strategy to create a Hungarian-owned, national market leader in the ICT sector. The merger with 4iG will allow Vodafone Hungary, which has a successful and innovative business in the country, to play a significant role in the future growth and development of the sector as a significantly larger scale and fully convergent operator.

The combined company will strengthen competition and have greater access to investment to propel Hungary's digitalisation."

János Suba, Communications Director of Vodafone Hungary, confirmed the news to MTI, but declined to comment and did not provide any details.

The transaction is expected to be completed by the end of the year.