H3G ‘days away’ from Orange deal

17 Jan 2012

Hutchison 3G Austria (H3G) is reported to be just days away from finalising an agreement to acquire rival mobile operator Orange Austria for EUR1.40 billion (USD1.85 billion). As previously reported by TeleGeography’s CommsUpdate, the deal – which has been rumoured since September 2011 – is dependent on H3G offloading around 3,000 of Orange’s 5,000 base stations, surplus frequencies in the 2.1GHz spectrum band, and Orange’s wholly-owned Yesss! mobile virtual network operator (MVNO) unit to A1 Telekom Austria in a EUR300 million transaction.

Representatives of France Telecom-Orange and Hutchison have declined to comment thus far, as have officials at Budapest-based private equity firm Mid-Europa Partners, which owns 65% of Orange Austria.

France Telecom-Orange initiated a comprehensive review of its European assets in 2011, as it sought to rebalance its portfolio towards emerging markets; the telco intends to withdraw from countries where it is not one of the top two operators, or where it does not have a controlling stake in the company. To this end, last month the Paris-based company agreed to sell its Swiss unit to Apax Partners for CHF2 billion (USD2.13 billion). France Telecom-Orange also hopes to offload its 20% stake in Portugal’s Sonaecom, the communications arm of Portuguese conglomerate Sonae.

According to TeleGeography’s GlobalComms Database, at end-September 2011 Austrian market leader A1 controlled 41.5% of the local wireless market, with T-Mobile accounting for a further 31.3% of customers. If fourth-placed H3G’s (10.0%) acquisition of the larger Orange (17.2%) goes ahead as planned, the consolidated entity will remain in third place, slightly adrift of Deutsche Telekom-owned T-Mobile.

Austria, CK Hutchison, Hutchison Drei Austria, Orange Austria, Orange Group