Vodafone to sell Hungary unit for €1.8 billion as Ghana sale stalls

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Vodafone Ghana
Vodafone Ghana

Vodafone Group has agreed to sell its operations in  Hungary for €1.8 billion as part of ongoing efforts to simplify its European portfolio and reduce debt.

The UK-based operator entered into heads of terms with Hungary-based IT service management company 4iG and state-holding company Corvinus for the potential acquisition of 100 per cent of Vodafone Hungary. The deal is subject to due diligence and regulatory approval, with completion targeted by the end of 2022.

Internal shared services division, Vodafone Intelligent Solutions (VOIS) is not included in the transaction.

Vodafone CEO Nick Read stated the nation’s government “has a clear strategy to build a Hungarian owned national champion in the ICT sector”.

He added the combined entity “will increase competition and have greater access to investment to further the digitalisation of Hungary”.

When the deal is done, 4iG will become the majority owner of Vodafone Hungary with 51 per cent, while the Hungarian state will own 49 per cent.

The aim is to create the market’s second-largest fixed and mobile operator which can better compete with Deutsche Telekom-owned Magyar Telekom as well as Yettel Hungary (formerly Telenor).

Vodafone Hungary currently has 3 million mobile, 700,000 TV, 700,000 broadband and 600,000 fixed voice subscribers.

4iG stated the resulting combined entity would have 5 million customers and 7.6 million revenue generating units (RGU) as of July 2022.

Ghana

This comes amid Vodafone Group’s similar agreement to sell its 70% majority shares in the Ghana operations to Telecel Group stalled because the Ghanaian regulator, National Communications Authority (NCA) says the sale agreement failed to meet regulatory requirements and international best practice.

 

The Ghana government, which holds 30% minority shares in Vodafone Ghana, also claims Telecel lacks the financial and technical muscle to acquire and run Vodafone Ghana, but Telecel has said it has cash ready to buy Vodafone’s assets in Ghana and is also set to invest at US$500 million into the network over the next three years.

Telecel is currently re-engaging their Ghanaian regulator over the deal, following the regulator’s reaction to news about the sale and alleged attempts by government to block it.

Meanwhile, whereas the price for the sale of Vodafone Hungary is open – €1.8 billion – till date no one knows how much Telecel is paying for Vodafone’s shares in the Ghana operations, except for what the company said that it is an all-cash deal.

Vodafone Ghana is number one in fixed voice and fixed broadband, number two in mobile voice (over 7 million subscribers) and number three in mobile broadband (over 3 million subscribers). It reportedly has about US$150 million (GHS500 million) debt on its books and it is currently not profitable. 

Telecel on the other hand, is a leading mobile operator in Central African Republic, a key player in Gibraltar and also holds a mobile license and operates an MVNO (mobile virtual network operations) in South Africa. In total, Telecel has over 4 million mobile subscribers across the three markets.

But it also offers several other B2B, B2C, B2G and digital services under its Telecel Play and Telecel Services portfolio; plus, it runs a consistent accelerator for Africa start-ups known as ASI (Africa Start-up Initiative), which has benefited a number of start-ups on the continent, including even Ghana.

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