* EU approves Hutchison's 1.3 bln euro buy of Orange Austria
* Hutchison must provide network access to third parties
* Hutchison must divest spectrum to any new network operator
(Adds details, background, Hutchison, Orange comments)
BRUSSELS/VIENNA, Dec 12 Hutchison 3G
won European Union approval for its 1.3 billion euro ($1.7
billion) takeover of Orange Austria on condition it
helped new players enter the market.
The European Commission said it had been worried that the
transaction would lead to higher prices and less competition but
said Hutchison's commitments to sell radio spectrum and open up
its network to new rivals had addressed its concerns.
The ruling on the deal, which was agreed by the parties a
year ago, will be a relief to the telecoms sector, where
operators had worried that regulators would frown on mergers
reducing the number of competitors in national markets.
Analysts say four-player markets like Germany and Spain are
ripe for consolidation that could help to offset falling sales
Completion of the Hutchison-Orange takeover is still
conditional on a linked deal for Austrian incumbent Telekom
Austria to buy budget mobile brand Yesss from Orange,
which could be stopped by Austria's BWB competition authority.
A BWB spokesman said this week it would likely appeal
against the Austrian cartel court's approval of the 390 million
euro Yesss deal, which would delay completion for long enough
for Telekom Austria to be able to walk away.
The BWB will decide whether to put in an official appeal by
the beginning of next week.
Orange Austria and Hutchison 3G Austria welcomed the
European Commission's decision on Wednesday, which comes after
10 months of wrangling with authorities in Brussels and Vienna.
"The combination of the two businesses will result in a
stronger challenger in the Austrian market, able to take the
fight to the two incumbent mobile network operators," Hutchison
3G Austria Chief Executive Jan Trionow said in a statement.
The takeover of Austria's second-smallest operator by the
smallest will give Hutchison a market share of about 24 percent,
behind leader Telekom Austria with about 46 percent and Deutsche
Telekom's T-Mobile with about 30 percent.
EU Competition Commissioner Joaquin Almunia said in a
statement: "The risks posed by more concentration in national
mobile telephony markets cannot be ignored."
"The commitments proposed by H3G ensure that competition is
preserved so that Austrian consumers continue to enjoy the
benefits of innovation and fair prices."
Mobile customers in Austria, a country of 8.4 million
people, enjoy monthly tariffs as low as 7 euros for
Helmut Gahleitner of the Chamber of Labour, which represents
the interests of working people, said: "We are going to have to
keep a closer eye in future on price developments at mobile
Hutchison, a unit of Hutchison Whampoa, which is controlled
by Hong Kong billionaire Li Ka-shing, promised to sell radio
spectrum and other rights to new entrants.
It also promised wholesale access to its network for rivals,
allotting up to 30 percent of its capacity for as many as 16
mobile virtual network operators (MVNOs) in the next 10 years,
and will have to seal at least one such deal before the takeover
($1 = 0.7693 euros)
(Reporting by Foo Yun Chee, Georgina Prodhan and Angelika
Gruber; editing by Rex Merrifield and Michael Shields)