The European Commission (EC) has cleared the proposed EUR1.3 billion acquisition of Orange Austria by Hutchison Whampoa’s 3 Austria from current owners Mid Europa Partners and France Telecom.
The deal, which Hutchison notified the EC of in May, is subject to conditions, including commitments to facilitate the entry of new players to the Austrian mobile market.
The Commission was concerned that the reduction of the number of operators in the market from four to three would reduce competition and lead to price increases. The other two Austrian operators are Telekom Austria’s A1 and T-Mobile.
The concerns have been 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.
“The commitments proposed by H3G ensure that competition is preserved so that Austrian consumers continue to enjoy the benefits of innovation and fair prices,” said Commission vice-president in charge of competition policy, Joaquín Almunia.
In order to further smooth the way for the deal, Hutchison aims to sell Orange Austria’s discount YESSS brand to Telekom Austria. However, it has been reported that Austria’s BWB competition regulator is to appeal the decision by Austria’s cartel court in November to approve this deal.
The acquisition of YESSS would bring Telekom Austria’s market share up to 47 percent from the current 45 percent, which the cartel court said would not make Telekom Austria market-dominant.