Hutchison Whampoa

Hutchison closes in on Austria deal

PUBLISHED : Friday, 02 November, 2012, 12:00am
UPDATED : Friday, 02 November, 2012, 5:30am

Hutchison Whampoa, whose acquisition of mobile network operator Orange Austria is under review, has taken a step forward to gaining the European Commission's approval of the €1.3 billion (HK$13 billion) deal.

Li Ka-shing's flagship conglomerate yesterday said it had offered certain concessions to the EC, which raised its objection in September to the takeover by Hutchison 3G Austria of the larger Austrian carrier owned by France Telecom and private equity investment firm Mid Europa Partners.

"We have submitted remedies to the EU last week that involve frequencies," a Hutchison Whampoa spokesman said.

That means Hutchison 3G Austria would be willing to sell certain radio frequency spectrum to a new domestic operator in the event one participates in the government's scheduled spectrum auction next year.

According to a Reuters report that cited a source familiar with the matter, that would be the 2.6-gigahertz spectrum.

This radio frequency is being used by mobile network operators worldwide for high-speed 4G mobile services.

"We're very confident that the Orange takeover will be approved by the end of the year," Hutchison 3G Austria spokeswoman Maritheres Paul said in a Bloomberg report.

The EC's main concern is that a decrease in the number of mobile network operators in Austria from four to three, after Hutchison 3G Austria is merged with Orange Austria, could result in more expensive telecommunications services for consumers.

EC vice-president Joaquin Almunia, who serves as commissioner for competition in the executive body of the European Union, had earlier suggested to Hutchison 3G Austria to sell assets, such as frequencies, on top of the operator's previous offer to open up its network to rival carriers at cost price, Reuters said.

Post-merger, Hutchison 3G Austria would have a 22 per cent market share, while larger carriers Mobilkom Austria and T-Mobile Austria have a combined 78 per cent share.

Hutchison Whampoa has said the merger would "ensure the investment needed to guarantee" the early deployment in Austria of a 4G network based on long-term evolution (LTE) technology.

Theoretical online download speeds of up to 100 megabits per second are provided by 4G LTE networks, while the fastest 3G networks run up to 42Mbps.