VIENNA, Dec 10 (Reuters) - Austria's competition regulator is to object to Telekom Austria's proposed acquisition of local budget brand Yesss, it told a newspaper on Monday, threatening to unravel a broader deal to cut competition in the Austrian mobile market.
The agreement for Telekom Austria to buy Yesss, currently owned by Orange, is a condition of Hutchison Whampoa's 1.3 billion-euro ($1.7 billion) deal to buy Orange Austria, which is awaiting approval from the European Union.
Yesss has about 740,000 customers and would raise Telekom Austria's market share to 47 percent from 45 percent. Austria's cartel court said last month when approving the deal that this would not make Telekom Austria market-dominant.
Telekom Austria has agreed to pay 390 million euros for the Yesss business, smoothing the way to reducing the number of operators in Austria's fiercely competitive mobile market to three from four.
"A merger (of Yesss and Telekom Austria) would lead to considerable disadvantages for consumers and does not promote competition but rather hinders it, from our point of view, and should therefore not go ahead," A spokesman for competition regulator the BWB was quoted as saying in WirtschaftsBlatt.
"We will appeal the decision," he told the newspaper.
The BWB did not immediately respond to calls for comment, while Telekom Austria said it could not comment until officially notified of an appeal.
Even if unsuccessful, an appeal against the sale would delay both Telekom Austria's takeover of Yesss and Hutchison's takeover of Orange Austria until at least next spring, the WirtschaftsBlatt said.
The European Commission is due to give its decision on the Hutchison-Orange deal by Dec. 21. ($1=0.7735 euros) (Reporting by Georgina Prodhan; Editing by Greg Mahlich)