* EU objections could force Hutchison to offer more
* Hutchison last month proposed to let rivals use its
* EU Commission decision due by Nov. 30
By Foo Yun Chee and Georgina Prodhan
BRUSSELS/VIENNA, Sept 13 EU regulators object to
Hutchison 3G's agreed 1.3 billion euro ($1.7 billion) takeover
of France Telecom's Orange Austria and will carry out a
full probe, Hutchison said on Thursday, in a move likely to
force more concessions to win approval.
The European Commission, which has been examining the
takeover since June, has said it is worried the deal would cut
the number of telecoms operators in Austria to three from four
and lead to higher consumer prices. The commission declined to
comment On Thursday.
The case is being watched closely by telecoms executives and
investors for how it might apply to bigger markets such as
Spain, Italy and Germany - which also have four mobile operators
and are seen as in need of consolidation.
Hutchison, Austria's third-largest mobile operator and a unit
of Hutchison Whampoa, which is controlled by Hong Kong
billionaire Li Ka-shing, offered last month to let rivals use
its mobile network to allay regulatory concerns.
The EU executive subsequently sought feedback from rivals
and other parties.
Hutchison said some respondents were negative on the deal
and that the Commission would broaden its investigation into the
proposed merger, confirming what a source earlier told Reuters.
H3G Austria's Chief Executive Jan Trionow said in an email
Hutchison would work with the EU watchdog but that further
concessions would erode the benefits of the deal for consumers
and may further boost the bigger operators.
The EU competition watchdog has set a Nov. 30 deadline for
Sources familiar with the matter have told Reuters that
Hutchison's offer included signing a memorandum of understanding
to open up its network to cable operator UPC, which is owned by
Some observers said the intense regulatory scrutiny is
surprising for a deal between a country's third and fourth
telecoms operators that would a combined group with just a 22
percent market share and in a country with 8.2 million people.
Telekom Austria is the market leader, followed by
Deutsche Telekom unit T-Mobile.
EU regulatory concerns about losing a fourth player in
Greece torpedoed Vodafone's plan to merge its Greek unit
with rival Wind Hellas in February, a source told Reuters at the