Vodafone set to halt Greek unit merger Vodafone is set to abandon attempts to merge its Greek business with rival Wind Hellas in the face of concerns among regulators about the precedent being set by allowing a duopoly in a European mobile market. Vodafone's Greek subsidiary and Wind Hellas had announced plans in September to pursue a merger to create a more competitive position in the difficult economic conditions in the country. Vodafone is the second-largest operator in Greece, ahead of Wind, but both are about half the size of Cosmote, the state-backed market leader. Vodafone took a £450m impairment loss on its Greek unit last quarter. As recently as last week reports had suggested that a deal might be struck, with Vodafone expected to have received a 60 per cent ownership and Wind's shareholders lined up for the remaining 40 per cent. The combined group would have been valued at more than €1bn. However, one person with knowledge of the talks said that the likelihood of being able to agree a deal that was satisfactory for European regulators had diminished since Christmas. He added that the argument of difficult market conditions was unlikely to be acceptable under competition rules. Even combined, the two would not be larger than Cosmote, although they could have close to 50 per cent of the market with about 4m subscribers in Greece each. The proposed merger was seen by analysts as the most extreme example of the wider in-market consolidation of mobile operations in many European markets. This has been in part caused by the pressure on mobile operators from falling revenues in weak economic conditions at a time when many need to continue investment in upgrading networks and bidding on spectrum that has been freed for next generation services. Last week, a deal was agreed to combine the third- and fourth-largest Austrian operators when Hutchison Whampoa, which owns 3, the European telecoms group, completed a €1.3bn deal to buy Orange Austria from France Telecom and Mid-Europa Partners, the private equity group. In the UK, France Telecom and Deutsche Telekom have merged businesses under the Everything Everywhere joint venture, while there has been a recent resurgence of rumours that KPN and Telefonica could pursue a long-anticipated combination of their German businesses later this year. However, regulators are seen to be reluctant to allow deals that reduce the number of operators to below four in most larger markets and three in smaller countries. An attempt to merge the two smaller Swiss operators was blocked in 2010. People with knowledge of the talks said that the two companies could carry on talks to share networks, which is more likely to be permitted by European regulators, and would still allow some cost savings. Vodafone and Wind Hellas declined to comment. Wind was acquired in 2007 by International Weather Investments but ownership was transferred to senior secured bondholders under a restructuring of its debts in October 2010. Many of the owners of the company are distressed debt funds, which had agreed to write down about €1.9bn of debt. It is no longer connected with Wind operations elsewhere in Europe.