A1 bags half the spectrum in Austrian auction

Oct 22, 2013

The final score, then, was Telekom Austria with four blocks of 800MHz spectrum, three blocks at 900MHz and seven blocks of 1800MHz spectrum. There were two other winners: T-Mobile won 2 x 45MHz, while 3 Austria took 2 x 25MHz.

So much spectrum does Telekom Austria now hold - especially its big win (two thirds of the total) in the prized 800MHz band - that it calculates it can deploy its radio assets to shore up its fixed line business: the press release talks of "unique strategic advantages" which allows "Telekom Austria Group to protect its fixed-line as well as mobile customer base."

The result was clearly a major strategic win for Telecom Austria but the corporate response was carefully muted with CEO Hannes Ametsreiter pronouncing the company "very happy about the excellent spectrum package we were able to purchase," but bemoaning the €1.03 billion it took to buy it as a "bitter pill to swallow."

If there's any real bitterness about, it must surely be in the mouth of the Austrian regulator who had been hoping to use the auctions to tempt in an LTE challenger but clearly failed to do so.

According to Pal Zarandy of Finnish consultancy Rewheel, the Austrian operators "spent about 60 per cent of their annual mobile revenues, which is just 4 per cent of the cumulative 15 year undiscounted market revenue." Even so, he says, they paid the highest European per capita price to win the spectrum at an average of €236, a smidge higher than the €227 paid by the Dutch.

In the Dutch case Information Commissioner Neelie Kroes had bemoaned the regulator's decision to hold back some spectrum for a fourth entrant, claiming it had created artificial spectrum scarcity by doing so. The Austrian result undercuts that theory since its prices ended up being higher despite (or perhaps because) there was no spectrum held back and no new bidder participated.

The challenger in the Austrian market therefore remains 3 which, Zarandy says, must be content with a market narrowed to just the urban/suburban areas.

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