Vodafone Group Plc has agreed to sell its Hungarian unit in a deal valued at 1.8 billion euros ($1.8 billion) including debt as part of the British telecommunications company’s plan to simplify its sprawling business.

The company sold the assets to 4iG Public Ltd. and Corvinus Zrt, a Hungarian state holding company, Vodafone said in a statement. The companies aim to close the acquisition by the end of the year, and VOIS, Vodafone’s IT and business support venture, isn’t included in the deal.

The combination with 4iG will create the second-largest mobile and fixed communications company in the country, the company said in the statement. It will go toward the government’s strategy of creating a “national champion in the ICT sector,” Vodafone Chief Executive Officer Nick Read said.

The deal fits into a pattern of expanding state ownership in the economy under Prime Minister Viktor Orban’s 12-year rule, while helping businesses close to the premier acquire prized assets, which have included businesses in the banking, insurance, energy, aviation, telecommunications and media industries. The state plans to take a 49 percent stake in the asset via Corvinus while 4iG, an IT and telecommunications company that relies on state contracts, will get the remaining 51 percent.

The government plans to label the assets as strategically important, Economic Development Minister Marton Nagy said in a statement. That means the purchase won’t face regulatory scrutiny. Vodafone has about 3 million mobile customers and 738,000 fixed broadband customers in Hungary according to filings.

Although Hungary is one of Vodafone’s smaller units, its planned divestment shows Read’s ongoing effort to simplify the business, which has also included the sale of Vodafone operations in New Zealand, Malta and Qatar. The business has also spun out its mobile masts into a separate infrastructure business and consolidated its African assets into its Vodacom subsidiary. Next, Read said he wants to consolidate Vodafone in key markets like Italy, the UK and Portugal.

After almost three decades of global expansion riding the global proliferation of wireless services, Vodafone has retrenched and focused on core markets in Europe and Africa. Telecom shareholder returns have dwindled facing regulation, fierce competition, demands for relentless investment in networks, and the loss of revenues from services like messaging.