(AOF) – British telecom operator Vodafone has announced that it has reached agreements with 4iG Public Limited Company and Corvinus Zrt, a Hungarian state-owned holding company regarding the potential sale of 100% of Vodafone Magyarország Távközlési Zrt for a total amount in cash equivalent to an enterprise value of 715 billion Hungarian forints (1.8 billion euros). This represents a multiple of 9.1x Adjusted EBITDA for the 12-month period ending March 31, 2022.
Vodafone Hungary is one of the leading convergent network operators in Hungary. An alliance with 4iG will create the number 2 in mobile and fixed communications with broader ICT (information and communication technology) capabilities. This operation is also part of the objective of the Hungarian State to create a national ICT champion.
Vodafone’s shared services business in Hungary – VOIS – is not included in the scope of the transaction and it will continue to provide services to Vodafone’s other operating companies.
The parties aim to complete the transaction, subject to the usual regulatory procedures and authorizations, by the end of 2022.
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End of the price drop
Thanks to the price war, French consumers have benefited from internet prices that are among the lowest in Europe. But gradually, subscription prices are increasing. According to the telecoms authority (Arcep), in 2021 they increased by 3.1% for mobile and 5.1% for fixed. If the current inflationary context can explain this rise in prices, it is not the only reason. All players are indeed seeking to restore their margins. They have already succeeded in outsourcing part of their capital expenditure related to the deployment of their fiber and mobile infrastructures (4G and 5G). Now they have to increase their income. This is an important issue in order to benefit from the development of their performance. Generating a satisfactory level of available cash (free cash flow) also allows them to benefit from attractive financing conditions, in a sector that requires substantial investments. Investments in the sector almost reached 15 billion euros in 2021, a historic level. The increase has reached almost 50% since 2017.