Austria merger delays 4G auction to late 2013

VIENNA, Oct 5 (Reuters) - Uncertainty over a controversial merger is expected to delay an auction for Austria's fourth-generation telecoms frequencies until next September, potentially leaving the pioneer in mobile technology among the last European countries to have faster networks.

Most of Europe's major economies and many of its smaller ones have already completed auctions for LTE (long-term evolution) spectrum, allowing networks to be built that offer mobile speeds roughly 10 times of those now available in most countries.

In Austria, lingering doubts over the proposed merger between the local units of Hutchison and Orange

will delay the auction in the Alpine country until the second half of 2013, the head of the broadcasting and telecoms watchdog said.

"I expect that the auction will close in September," Georg Serentschy told Reuters, saying that any handover of frequencies between the parties as a result of the merger would have to take place before preparations for the auction could begin.

The European Commission has until the end of November to conclude its investigation of Hutchison's proposed 1.3 billion euro ($1.7 billion) takeover of Orange Austria, which was agreed in February and would combine the two smallest Austrian players.

EU Competition Commissioner Joaquin Almunia on Tuesday reiterated his doubts whether Hutchison 3G could provide a satisfactory proposal to sooth concerns over its bid for Orange Austria.

Hutchison argues that consolidation is essential for survival in the Austrian market, where four operators fight over a population of just over 8 million, resulting in price wars and all-inclusive deals for as little as 7.50 euros per month.

Austria was Europe's first country to have national coverage with third-generation networks and is an over-saturated market, meaning consumers have their pick of high-quality services and frequently switch operators for better deals.

Already available in Japan, South Korea, the Nordics and part of the United States, LTE is fast becoming the new standard, with smartphones including Apple's iPhone 5 being designed for the new networks.

Functions such as high-definition video calls and high-speed movie downloads will only work where such networks are in place. Faster networks also drive productivity and economic growth. ($1 = 0.7689 euros)

(Reporting by Angelika Gruber and Georgina Prodhan; Editing by Hans-Juergen Peters)

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