Hutchison's Orange Austria buy clears last hurdle

The letters Telekom Austria are placed in front of the headquarters of Telekom Austria Group in Vienna, August 17, 2011.

VIENNA/FRANKFURT (Reuters) - Austria's BWB competition authority said on Friday it would not appeal against Telekom Austria's acquisition of Orange's budget mobile brand Yesss, clearing the way for a wider consolidation of the country's telecom market.

The decision by the BWB, which had signaled it might appeal and said it still had concerns, frees Hutchison Whampoa to buy Orange Austria in a 1.3 billion euro ($1.7 billion) deal that was conditional on the Yesss sale.

The BWB said there was no point in challenging the decision of Austria's cartel court, which approved the deal last month on the grounds that Telekom Austria would not achieve market dominance by acquiring Yesss's 740,000 customers.

"The decision is indeed defective, but did not seem contestable in the high cartel court. The BWB had concerns until the last about the merger," it said in a statement.

Hutchison and Orange Austria, who are the country's two smallest operators and have combined market share of about 24 percent, can now go ahead with their deal, which will cut the number of mobile operators in Austria from four to three.

The European Union gave its conditional approval on Wednesday, raising hopes that similar consolidation from four to three mobile operators may be allowed in other European countries.

Telekom Austria shares rose 1.3 percent to 5.73 euros by 6.42 a.m. ET. Shares in Orange Austria's part-owner France Telecom were flat, broadly in line with a 0.3 percent weaker European telecoms index.

($1 = 0.7628 euros)

($1 = 0.7555 euros)

(Reporting by Georgina Prodhan; editing by Keiron Henderson)