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Telenor to consider parting with business in Hungary

Norwegian telco Telenor revealed on Friday it has received an "expression of interest" for its mobile operations in Central and Eastern Europe, including Hungary.  Telenor said it would assess the offer in the first quarter of 2018, adding that the assessment would not impact the companyʼs operations, customers or employees.

"Telenor has received inbound and unsolicited interest for its Central and Eastern Europe portfolio consisting of the mobile operations in Hungary, Bulgaria, Montenegro and Serbia," the company said. "With a view to creating shareholder value, Telenor has engaged in a process to evaluate the interest received," it added.

Online news site hvg.hu recalled that Mergermarket, a news and intelligence service for mergers and acquisitions, reported last week that Telenor is considering pulling out of Bulgaria, Serbia and Montenegro, citing insider sources. Hungary was also mentioned.

Mergermarket reported at the time that Telenor was negotiating with an American investment fund on the sale of its interests in Bulgaria, Serbia and Montenegro for USD 2 billion. The suspicion that Hungary might also be involved, hvg.hu notes, was based on the fact that the four countries together belong to Telenorʼs Central European cluster, overseen by Alexandra Reich, CEO of Telenor Hungary since October 2016.

The CEE portfolio generates about 9% of group-level revenue and 8% of EBITDA before other items. Telenor said it would not issue any further statements or comments on the matter until the review has been concluded.

Responding to a query from state news agency MTI, Telenor Hungary said that obligations linked to its spectrum licenses regarding service quality and technical parameters would remain in force regardless of the companyʼs owner. Any possible change in ownership will not affect these parameters, service quality or contractual framework, it added.

Telenor entered the Hungarian market in 1994. It has an almost 30% market share with 3.5 million individual and corporate subscribers. Telenor Hungary has a staff numbering about 1,000.

Separately, Telenor has already been in the news today after the Competition Office (GVH) conducted unannounced on-site probes at its headquarters, as well as at those of rival Magyar Telekom, on suspicion of collusion between the two telcos in connection with a broadband frequency tender.  See here for the BBJ report.