December 21, 2012 / 2:35 PM / 5 years ago

UPDATE 2-Hutchison's Orange Austria buy clears last hurdle

* BWB says no point in appealing cartel court decision

* Way clear for Hutchison-Orange Austria takeover

* Telekom Austria shares up 1.1 pct, France Telecom flat (Adds Telekom Austria, Hutchison, Orange comments; updates shares)

VIENNA, Dec 21 (Reuters) - Austria’s competition authority said 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 on Friday 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 a 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.

Austria’s crowded mobile market, with four operators serving a population of just 8.4 million, is extremely competitive, with all-inclusive no-strings deals starting at 7 euros per month.

Hutchison said it would immediately start preparing to build a super-fast LTE mobile network as soon as the deal was closed.

Orange said it welcomed the fact that its 800 workers at last had a degree of certainty about their future, after a year of wrangling with regulators in Brussels and Vienna.

The European Union had given its conditional approval on Wednesday, raising the prospect that similar consolidations from four to three mobile operators may be allowed in other European countries.

Telekom Austria shares rose 1.1 percent to 5.72 euros by 1344 GMT. Shares in Orange Austria’s part-owner France Telecom were flat, broadly in line with a 0.2 percent weaker European telecoms index.

Telekom Austria, which will pay 390 million euros for Yesss plus some base stations and frequencies, welcomed the decision, despite the fact that it needs to conserve cash and has slashed its dividend.

“We are extremely pleased that after this long approval process we are now able to go ahead with the takeover ... without a single condition having been imposed,” Chief Executive Hannes Ametsreiter said in a statement.

“This transaction is an important strategic step toward strengthening our position as the market leader in Austria.”

$1 = 0.7628 euros Reporting by Georgina Prodhan; Editing by Keiron Henderson and David Holmes

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