Hutchison 3G Austria (3 Austria) has completed the acquisition of Orange Austria from its owners Mid Europa Partners (65%) and France Telecom (35%). The transaction has a value of EUR 1.3 billion and took almost one year to be completed as the European Commission, Austrian cartel office BWB and Austrian telecom control commission TKK had to approve several parts of the acquisition. After completion, 3 Austria is now the third largest mobile operator in Austria behind A1 Telekom Austria and T-Mobile Austria. France Telecom reports that it gets cash proceeds of around EUR 370 million for the sale of its equity stake.
3 Austria CEO Jan Trionow is happy that the acquisition has been completed and is looking forward to working with his new colleagues to deploy a nation-wide LTE network during the next two years. Part of the acquisition is the sale of frequencies, base station sites, Orange Austria’s discount brand Yesss!, as well as certain intellectual property rights currently owned by Orange Austria to Telekom Austria. The value of this sale amounts to EUR 390 million.
On 3 February 2012, 3 Austria announced the acquisition including the sale of assets to Telekom Austria. The acquisition had to be approved by the European Commission, which it did on 13 December 2012 including conditions. The conditions include 3 Austria divesting spectrum to an interested new entrant on the Austria mobile market as well as the right to acquire additional spectrum for such a newcomer at an auction planned in 2013 by the Austrian telecom regulator. The new entrant will also benefit from privileged conditions for the purchase of sites for building up its own network in Austria. 3 Austria also commits to provide, on agreed terms, wholesale access to its network for up to 30 percent of its capacity to up to 16 mobile virtual network operators (MVNOs) in the coming 10 years.
An up-front commitment ensures that 3 will not complete the acquisition of Orange before it has entered into such a wholesale access agreement with one MVNO. This condition is already fulfilled with UPC Austria signing a MVNO deal with 3 Austria on 9 October 2012.
Earlier, the Austrian cartel court approved the sale of Yesss to Telekom Austria and the TKK approved the sale of the frequencies to Telekom Austria. On 2 January of this year, T-Mobile Austria announced it had filed an appeal against the latter decision at the Austrian federal administrative court, claiming it was not heard by TKK during the approval process. T-Mobile demands that the TKK redistributes UMTS/HSPA frequencies in a more fair way, which is a possibility according to the telecommunications law and has been calling for such a measure during the approval process of the merger. The operator also demanded an injunction on the transfer of the frequencies, meaning a delay for the completion of the Orange Austria acquisition. The Administrative Court will decide on the injunction during the coming days.
