T-Mobile has lodged an appeal against the reallocation of radio frequencies that will take place as a result of the proposed merger of Hutchison Whampoa’s 3 Austria and Orange Austria, Reuters reports.
The merger was approved by the European Commission in December but the appeal by Austria’s number-two operator could potentially delay the successful completion of the EUR1.3 billion deal.
Austria’s telecom control commission, the TKK, approved the transfer of frequencies alongside the merger but T-Mobile has lodged an appeal against the decision in Austria’s higher administrative court.
A Reuters source said in December that T-Mobile Austria’s parent company Deutsche Telekom planned to appeal the spectrum transfer due to fears that it would give Austrian rivals a significant head-start in building LTE networks.
T-Mobile’s current frequency holdings are unsuitable for LTE, meaning it will have to wait until after a spectrum auction in 2014 before it can build its next-generation network.
The operator said it will have to invest EUR90 million and rack up significant operating costs if its standard UMTS frequencies are to cope with rising data demand.
According to Reuters, T-Mobile expects the court to quickly decide whether to grant an injunction in the case which could last until March or April, delaying the deal for Hutchison Whampoa to acquire Orange Austria from France Telecom and Mid Europa Partners.
The merger of 3 and Orange — which would reduce the number of operators in Austria from four to three — was approved by the European Commission in December after Austria’s competition authority dropped its opposition.
The EC’s concerns were allayed as Hutchison has agreed to divest spectrum to a new entrant in the market and provide wholesale access to up to 30 percent of its network capacity for up to 16 MVNOs over the next 10 years.
Telekom Austria is also due to acquire frequencies from Orange as part of a related EUR390 million deal to buy budget mobile brand YESSS. Austria’s competition regulator was reported in December to be preparing to oppose the deal.