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Hutchison closes deal to become No. 3 in Austria

The logos of "Orange" and "3" are pictured outside a telecommunications store in Vienna February 3, 2012. REUTERS/Heinz-Peter Bader
The logos of "Orange" and "3" are pictured outside a telecommunications store in Vienna February 3, 2012. REUTERS/Heinz-Peter Bader

VIENNA (Reuters) - Consolidation of Austria's cut-throat telecoms market moved ahead on Thursday when Hutchison Whampoa Ltd completed its 1.3-billion-euro ($1.7 billion) takeover of Orange Austria, making it the country's third-biggest mobile operator.

Its purchase from Mid Europa Partners (MEP) and France Telecom-Orange followed extensive negotiations that finally won European and Austrian regulatory approval last month.

"We are delighted that, after undergoing a lengthy regulatory process, we have finally been able to close this acquisition," said Jan Trionow, head of local unit Hutchison 3G Austria.

"I am particularly looking forward to working ... to push forward with building a nationwide LTE network in Austria within the next two years," he said, referring to the next-generation high-speed networks that will speed data delivery to users.

France Telecom said it would get around 70 million euros in cash from selling its 35 percent stake in Orange Austria. Private equity group MEP held the other 65 percent.

In a separate but related deal, market leader Telekom Austria wrapped up its purchase of discount brand Yesss from Orange Austria.

Both transactions have won regulatory approval, but Deutsche Telekom's T-Mobile Austria unit has tried to throw a spanner in the works by lodging a court appeal against the accompanying re-allocation of radio frequencies.

Hutchison and Orange Austria are the country's two smallest operators and have a combined market share of about 24 percent. Their deal will cut the number of mobile operators in Austria from four to three.

Austrian operators serve a population of just 8.4 million and have been extremely competitive, with all-inclusive no-strings deals starting at 7 euros per month.

Telekom Austria agreed last February to buy frequencies, base station sites, mobile phone provider Yesss and other intellectual property rights from Orange Austria for up to 390 million euros.

It said in a statement it had also completed the acquisition of intellectual property rights for the "One" brand on Thursday, while closing on the other assets "follows gradually".

(Reporting by Michael Shields; Editing by Dan Lalor and Mark Potter)

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