EC approves Hutchison’s acquisition of Orange Austria with conditions
The European Commission has granted approval for Hutchison’s €1.3 billion acquisition of Orange Austria, subject to several tough conditions.
The deal, which was first announced in February, had been held back by concerns that it would reduce competition in the Austrian telecoms market and drive up prices for consumers.
In order to complete the deal, Hutchison 3 Austria will have to sell off some of its radio spectrum and additional rights to an interested new entrant in the Austrian market.
The new entrant will be reserved additional spectrum at an auction planned in 2013 by Austria’s telecoms regulator, enabling it to build out mobile network infrastructure in the country. It will also have privileged conditions with regards to the purchase of network sites.
Hutchison will also have to grant access to up to 30% of its wholesale network capacity to up to 16 MVNOs in the next 10 years.
The EC said that Hutchison will need to enter into at least one MVNO as an up-front condition for the deal’s completion, although this has already been achieved through a deal with UPC Austria signed in October.
Hutchison 3 Austria CEO, Jan Trionow, reportedly reacted well to the news, saying that the conditions would see a continuation of a competitive mobile market in Austria with lower thresholds for new entrants. He also said the merger would enable 3 to quickly roll out a nationwide LTE network.
The EC approval for the deal is likely to be an important stepping stone for further consolidation in the region as European telcos look to improve their balance sheets by divesting assets in non-core countries.
Despite the EC approval the Orange Austria deal may still be dependent on an agreement Hutchison signed with Telekom Austria to sell frequencies, base station sites and Orange’s discount mobile brand Yesss! for €390 million.
Although approval for the Yesss! acquisition was granted by the Austrian cartel court at the end of November, Austria’s cartel office is reportedly set to appeal the decision.