The sale of France Telecom’s Orange Austria to Hutchison Whampoa, owner of rival 3 Austria, has been opposed by the country's federal competition authority, the Financial Times Deutschland reports.

The main issue, according to the newspaper, is that Hutchison wants to sell Orange Austria’s discount subsidiary Yesss – which has 750,000 customers – to Austrian number-one operator Telekom Austria, along with some network and spectrum assets. Such a deal would boost Telekom Austria’s market share from 42 percent to 47 percent.

Head of the competition watchdog in Vienna, Theodor Thanner, said he cannot envisage the sale taking place in its current form, despite numerous discussions aimed at providing a solution taking place, the paper said.

If the sale of these assets to Telekom Austria continues to be opposed, it is understood that Hutchison may walk away from the EUR1.3 billion agreement it concluded with France Telecom in February.

Orange Austria is the number-three operator in the country, and is 35 percent owned by France Telecom with private-equity firm Mid Europa Partners owning the remaining 65 percent.

The combination of Orange Austria and 3 Austria would have 3.44 million connections prior to the disposal of Yesss, strengthening it against Telekom Austria's A1 (5.27 million connections) and T-Mobile (4.06 million), according to Wireless Intelligence figures.

France Telecom is reviewing several European markets to assess the value of retaining ‘non-core’ assets. The firm recently sold its Swiss mobile unit to private-equity group Apax Partners for EUR1.6 billion and is investing heavily in developing markets.