* EU decision due by March 24
* Along with Germany deal, Ireland is key test case
* Hutchison says remains confident deal will be approved
BRUSSELS, Nov 6 (Reuters) - European antitrust regulatorswill investigate whether Hutchison Whampoa's $1billion bid for Telefonica's unit in Ireland willreduce competition in the country's mobile market, the EuropeanCommission said on Wednesday.
The move will put pressure on Hutchison to offer concessionssuch as spectrum sales or making it easier for rivals to accessits network, to ease the regulatory concerns.
Along with another review of a much larger deal in Germanyin which Telefonica aims to buy smaller rival KPN's E-Plus, Hutchison's Ireland deal is seen by investors andtelecom executives as a key test of whether European regulatorsare softening their stance on mergers in the sector.
If they are cleared without major concessions, bankerspredict further consolidation to reduce the number of Europeanoperators and help the sector return to growth after years ofshrinking sales and regulatory pressure.
Hong Kong-based Hutchison Whampoa, controlled by Asia'srichest man, Li Ka-shing, announced the 780-million-euro ($1.05billion) offer for Telefonica's 02 Ireland unit in June tostrengthen its position in Europe.
It also owns mobile carriers, which market services underthe brand name 3, in five other European countries.
Reuters reported on Oct. 23 that the Commission would openan in-depth investigation into the acquisition.
The European Union competition authority, which held apreliminary review of the deal in the last month, said the dealmay have a negative impact on rivals and lead to higher prices.
"The Commission has concerns that the transaction wouldremove an important competitive force and change the mergedentity's incentive to exert significant competitive pressure onthe remaining competitors," it said in a statement.
The acquisition would quadruple the market share ofHutchison's subsidiary, 3 Ireland, to 37.5 percent, behindmarket leader Vodafone.
Hutchison said the decision to open an extended inquiry"does not in any way prejudge the final outcome of theCommission's review" and that it was "confident that the mergerwill be approved".
The Commission said it would decide by March 24.