Jászai Gellért: State involvement is normal in telecommunications

Last week, the news broke that 4iG Nyrt., the Hungarian state and the owner of Vodafone Hungary had reached a preliminary agreement on the sale of Vodafone’s domestic subsidiary. The parties will pay a total of HUF 715 billion, 4iG will own 51 percent, while the state will own 49 percent. The deal may bring changes not seen for decades in the domestic telecommunications market, but its outcome and consequences are at least multi-probable. Jászai Gellért, the president and CEO of 4iG Nyrt., recently gave Index an exclusive interview regarding the deal, in which he emphasized: it was not the state that approached 4iG with the idea of ​​buying Vodafone Hungary, but rather the opposite.

He calls the decision a strategic acquisition, which, according to him, can be at least as far-reaching and significant in terms of the history, modernization, and market positions of Hungarian telecommunications as the sale of Matáv 29 years ago (we also examined the possible scenarios and their effects earlier in our article). Jászai offered the government the possibility of minority ownership more than a year ago.

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In the interview, Jászai emphasizes that, in his opinion, it is not nationalization, but a market transaction in all respects, in which 4iG can participate as a majority investor and the Hungarian state as a minority investor.

“The privatization of the sector and the admission of large international telecommunications companies to the domestic market took place in such a way that both the state and domestic private capital were pushed out of this strategic industry for a long time. With the Vodafone transaction, this situation will change,” said the CEO of newspaper, who says that with the transaction, the national capital will bring in a 30-year lag caused by the peculiarities of privatization, and then highlights that 54 percent of Telenor is still owned by the Norwegian state, but 51 percent of the state’s presence in Swisscom is also there.

Regarding the financing of the purchase, he said that they are primarily thinking about international market financing, loans, and bond issuance, which they are working on together with the investment bank JP Morgan. According to their calculations, it will take no more than 10-12 years for the investment to pay off, but they can give a more accurate estimate after Vodafone’s due diligence.

To Index’s question whether the fact that they also have a 25 percent share in the other mobile service provider, Yettel, could create a cartel-suspicious situation, Jászai replied that they are only investors in a competing company in the future, which does not significantly affect the strategy. He adds: they have several scenarios, the property in Yettel could be an important issue not only from the point of view of competition law, but also from the point of view of financing and return.

Source: HWSW Informatikai Hírmagazin by www.hwsw.hu.

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