EU regulators suggest MVNO compromise to smooth Hutchison/Orange deal

24 Jul 2012

According to Austrian business daily Wirtschaftsblatt, European Union (EU) regulators are willing to allow Hutchison Whampoa’s H3G Austria unit to take over France Telecom-Orange’s Austrian subsidiary, as long as the combined entity allows other local operators to access its network as mobile virtual network operators (MVNOs). The news, which cites ‘EU insiders’, offers the first indication that there is a light at the end of the tunnel for the Hong Kong-based firm. However, the EU solution fails to address the chief objection from Austria’s federal competition authority, Bundeswettbewerbsbehorde (BWB), which objects to a clause in the EUR1.40 billion (USD1.87 billion) deal which would see H3G sell MVNO Yesss! to A1 Telekom Austria immediately after the transaction; the transfer of 750,000 Yesss! subscribers would allow Telekom to boost its market share to around 47%. If the anti-monopoly agency decides to formally block the transfer of the FT-Orange assets to Telekom, Hutch is understood to be prepared to walk away from the deal.

The Austrian wireless market is currently home to more than a dozen well known MVNOs and airtime resellers, including Schwarzfunk, Yesss!, eety and Red Bull Mobile (formerly aonMobil).

Austria, Hutchison Drei Austria, Orange Austria, Yesss!