Hutchison sees speedy EU decision on Orange Austria
Hutchison Whampoa is hopeful of a decision within weeks on its intended takeover of Orange Austria and may seek a review of the European Union process if the deal is not approved, its managing director said on Sunday, Reuters reports.
"At the end of three weeks, there can be a decision," Canning Fok told journalists in Vienna. "We will seek a judicial review of the whole process if this doesn't go through... We will seek clarification."
Hutchison argues that merging the two smallest mobile operators in Austria will create a better environment for consumers by giving the new, bigger company more scope to invest in services and a faster, fourth-generation network.
The merged company would still be the smallest player in Austria, with a share of 22 percent, behind Telekom Austria and Deutsche Telekom's T-Mobile.
The Austrian market is fiercely competitive, with four operators vying with each other in the country of 8.2 million people.
"I am at a loss to understand why we have to go to phase two," Fok said of the European Commission's decision to launch an in-depth investigation of the proposed 1.3 billion euro ($1.6 billion) deal.
Fok said Hutchison had signed a deal to allow another player to enter the Austrian market as a mobile virtual network operator (MVNO) using Hutchison's network if the Orange merger was approved - and said the offer was open to other potential new entrants.
"We signed with an MVNO and in fact we gave him quite a good deal so that when we come in there will be another player in the market to overcome the theoretical worry of the Commission," he said. "I just hope the regulator can come to a common sense decision and not a political decision."
He added that a stronger player, which would result from the Orange merger, would be able to afford to build a faster, fourth-generation network and would set about doing so within months.
Hutchison 3G Austria Chief Executive Jan Trionow said such a network could be built in about two years, after the necessary spectrum auctions and reforming of existing spectrum took place.
Fok said the Austrian regulator, which is investigating a proposed sale by Orange of its Austrian discount brand Yesss! to Telekom Austria that is linked to the Hutchison-Orange merger, was proving more sympathetic than Brussels.
He repeated that the Hutchison-Orange merger was dependent on the Yesss! sale going through, because it will strengthen Orange's weak balance sheet by 390 million euros.
"I was told that the Austrian side is much more receptive," Fok said.
He added that Hutchison had no intention of exiting Austria if the merger failed, having spent 10 years getting to the point of breakeven in 2011, nor did he want to exit any other European markets. "I would like to do more consolidation," he said.
Hutchison 3G is typically the smallest player with the keenest pricing in the European markets in which it operates, and Fok said the current harsh economic climate was favouring his company, as customers searched harder for good deals.
Fok said Hutchison would be conservative with its cash, being keen to preserve its credit rating of A. The company recently made an acquisition in Britain's gas infrastructure market but almost immediately issued new shares of $300 million.
Fok added that Hutchison was "very interested" in buying a stake in Britain's Manchester Airports Group, for which it has been reported to be shortlisted. He declined to elaborate.
In its home continent of Asia, Fok said Hutchison's business was "going strong. Obviously it is slower than last year."
He said the conglomerate's container business was growing and the property business was "OK". He declined to give details ahead of the group's reporting earnings next week.