Hutchison, EU set for talks on Orange Austria bid

Hutchison 3G (Hong Kong) is set to meet EU authorities on Wednesday this week to present the case for its planned takeover of Orange Austria, reports Reuters.

The mooted €1.3 billion acquisition has run into opposition from Joaquin Almunia, the EU’s competition commissioner, who fears the merger will result in a poorer deal for Austrian telecoms consumers and higher wholesale rates for MVNOs.

Hutchison 3G has already offered to sell some Orange (Paris, France) assets to Telekom Austria as a concession, as well as open its network to rivals at cost price, but regulatory authorities remain unconvinced the deal should be allowed to proceed.

Citing a person familiar with the matter, Reuters reports that Jan Trionow, Hutchison 3G Austria’s chief executive, and Christian Salbaing, its deputy chairman, are scheduled to meet with senior officials from the European Commission’s competition unit on Wednesday at a closed-door hearing about the merger.

Similar sessions helped US software giant Oracle (Redwood Shores, USA) to persuade EU authorities that it should be allowed to acquire server maker Sun Microsystems (Santa Clara, USA) in 2010.

Austria currently hosts four network operators (Telekom Austria and T-Mobile, besides Hutchison 3G and Orange) – the same number as the UK – but is home to just 8 million people, compared with the UK population of around 63 million.

Analysts frequently cite the country as one of the most competitive markets in Europe, while Telekom Austria (Vienna) has often blamed the levels of competition, combined with unsympathetic regulation, whenever it has issued a disappointing set of financial results.

Hutchison is concerned that EU authorities will demand so many concessions the deal becomes pointless.

What’s more, the proposal to sell assets to Telekom Austria has raised additional concern about the growing market power of the former state-owned operator.

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