Vodafone, KPN slam EU's Almunia over Hutchison deal

Tue Oct 2, 2012 11:36am EDT
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By Foo Yun Chee and Leila Abboud

BRUSSELS (Reuters) - Vodafone (VOD.L: Quote) and KPN (KPN.AS: Quote) on Tuesday slammed EU antitrust regulators who are examining Hutchison 3G's 0013.HK bid for France Telecom's FTE.PA Orange Austria, saying their narrow focus could block mergers and investments in the sector.

Earlier on Tuesday, EU Competition Commissioner Joaquin Almunia questioned whether Hutchison could offer sufficient concessions to ease his concerns about the proposed takeover, raising the specter of a veto.

Almunia's comments came a week after the European Commission sent Hutchison a list of its reservations regarding the deal, which would eliminate a fourth telecoms provider in Austria. He had expressed similar doubts about the deal last month.

"We have recently adopted a statement of objections in relation with this proposed merger. At this stage, the question remains whether effective remedies will be found," Almunia said in the text of a speech at a conference in Nicosia.

A Hutchison spokesman said the company had little scope for more concessions on top of a proposal to offer network access to rivals at cost price. He said Hutchison would continue talks with the Commission and was confident of a positive outcome.

Chief executives of Vodafone, KPN and Orange urged a regulatory re-think on consolidation, arguing that more mergers were needed in Europe to meet the need for investment in networks and spur economic activity in the region.

"The solution has to be found in scale and consolidation. Commissioner Almunia has complained that there are not enough cross-country deals - he needs to ask the question why," Vodafone CEO Vittorio Colao told the FT ETNO Summit in Brussels.

"We need to allow consolidation. We should not worry how many operators a single country has, we should be a bit more American," he added.   Continued...

European Union Competition Commissioner Joaquin Almunia addresses a news conference at the EU Commission headquarters in Brussels July 17, 2012. REUTERS/Eric Vidal