UPDATE 2-Hutchison-Orange deal in hands of Austrian watchdog
* Hutchison MD lobbies Austrian watchdog for Orange takeover
* Telecoms regulator confirms deal could fall through
* Telekom Austria shares rise 2.8 percent (Adds Hutchison MD comment, background, updates shares)
By Georgina Prodhan and Angelika Gruber
VIENNA, Dec 14 (Reuters) - Hutchison Whampoa's managing director flew into Vienna on Friday to fight for his company's 1.3 billion euro ($1.7 billion) takeover of Orange Austria held up for almost a year by regulatory wrangling.
Hutchison's Canning Fok, who is based in Hong Kong, said he had had constructive talks with the BWB, the Austrian competition authority, the regulator that could still block the deal.
The Asian company wants Orange Austria to gain critical mass in the country, where it is the smallest mobile operator.
The outcome of the deal is being closely watched in other European countries where hard-pressed telecoms companies are also hoping to be allowed to consolidate.
The takeover is conditional on Telekom Austria buying Yesss, Orange's budget brand in Austria, a deal approved by Austria's cartel court.
But the BWB has said it might appeal this decision because it is concerned the Yesss acquisition could hurt consumers.
"I've just come from the competition authority's office. We spent over an hour talking," Fok told reporters in Vienna. "Nothing is decided. However, the meeting was very constructive. I feel very positive about it," he said.
A BWB appeal would delay regulatory approval beyond the end of January, a deadline after which Telekom Austria could walk away from the 390 million euro Yesss deal.
"If there is no decision by then, Telekom Austria could get out of the deal," Georg Serentschy, in charge of telecommunications at Austria's t e lecoms regulator RTR, said at a news conference on Friday.
Telekom Austria agreed almost a year ago to buy Yesss, which would raise its market share in Austria by about 2 percentage points to 47 percent.
But since then, the company has warned on profits and slashed its dividend to conserve cash. And Hutchison has promised to help open up the market to new entrants to gain approval for the merger, which would limit benefits from consolidation.
Investors are not keen on Telekom Austria's purchase of Yesss partly because the company, like other European telecoms groups, is cutting its dividend.
Shares in Telekom Austria have risen since the BWB hinted it might intervene to delay the Yesss deal. They closed 2.8 percent higher at 5.45 euros on Friday, topping the gainers in a European telecoms index that closed 0.6 percent lower.
The European Union approved the Hutchison-Orange takeover on Wednesday, on condition Hutchison offer wholesale access to its network to new entrants and give up frequencies to any potential new network operator.
The BWB will issue its formal decision next week.