France Telecom and an investment partner have sold mobile operator Orange Austria to Hong Kong-based Hutchison for 1.3 billion euros ($1.7 billion), Hutchison's Austrian affiliate said.

The Hutchison deal has been long in the works from the heavily indebted France Telecom, which holds 35 percent of the Austrian company. Buyout firm Mid Europa Partners holds the other 65 percent.

In a bid to satisfy competition regulators, Hutchison will in turn sell assets including wireless spectrum and transmitters worth 390 million euros to rival operator A1, which is part of Telekom Austria.

Hutchison, which is already active in Austria with its "3" brand, will also offload Orange Austria's cheap-rate affiliate Yesss!, according to a statement from Orange.

But the deal, which will create a company with 3.5 million customers, could still attract close scrutiny from European Union authorities, Austrian media have reported.

A1 is the dominant mobile company in Austria with 41 percent of market share, followed by Deutsche Telekom's T-Mobile Austria with about 31 percent.

Hutchison's 3 trails far behind with a market share of just under 10 percent, but will more than double that with the Orange Austria acquisition.

The acquirer is part of the Hutchison Whampoa conglomerate controlled by Hong Kong's richest man Li Ka-shing, and via the 3 brand it operates in nine mobile markets including Australia, Britain and Italy.

The sale marks the latest effort by the formerly state-run France Telecom to raise cash by selling non-core assets. It recently offloaded its Swiss mobile unit to private equity group Apax Partners for 1.6 billion euros.

Analysts expect the French operator to announce further sell-offs in the Middle East and Africa.