Austria plots investment-friendly 5G auction

• Tender proposes low reserve prices, 20-year terms, no MVNO requirement
• Regulator considers bonus scheme to incentivise broad rollout
• There will be minimum coverage obligations for road and rail links

Austria's telco regulator has launched a consultation on proposed tender conditions for its next 5G auction, and they are so sensible as to almost be unnerving.

The Regulatory Authority for Broadcasting and Telecommunications (RTR) said it wants to establish an investment-friendly framework, and to that end has suggested 20-year licences and a reserve price for spectrum in the 700 MHz, 1500 MHz and 2100 MHz bands totalling €295 million. That compares to a €1.5 billion reserve in Germany's multiband 5G auction earlier this year, and we all know what operators made of that.

"A big concern for us was to establish investment-friendly framework conditions for the development of networks and thus give the operators as much freedom of design as possible," said Klaus Steinmaurer, head of the RTR's telecommunications and post department.

Furthermore, licences won't come with mandated wholesale access, after a recent review led the RTR to conclude that "no more MVNO requirements are necessary."

That's not to say successful bidders will be given entirely free rein. For one thing, there will be the usual stringent coverage conditions.

The watchdog wants them to roll out minimum speeds of 10 Mbps downlink/1 Mbps uplink to 98 percent of highways, expressways and selected rail links, and to 90 percent of federal and state highways. Operators will also be required to deliver 30 Mbps downlink/3 Mbps uplink connectivity to 900 underserved locations.

However, in line with the RTR's operator-friendly approach, it has proposed a bonus system designed to incentivise bidders to go above and beyond those 900 locations.

It works like this: after operators have finished vying for spectrum, they have an opportunity to bid to roll out networks in one or more of around 2,000 areas identified as moderately or poorly served. For each underserved area that they win, the operators will receive a rebate on their spectrum bids.

"To grant this bonus, a substantial sum has been reserved from the pot of minimum bids," Steinmaurer explained.

It's almost as if the regulator's main priority is ensuring decent 5G coverage, rather than securing a giant windfall for the government. Nonetheless, it will be interesting to see what the operators make of the proposals.

"Once the tender conditions have been approved by the Federal Minister of Transport, Innovation and Technology, the start of the second 5G auction is scheduled for spring 2020; at the end of the second quarter of 2020, the frequency allocation procedure will be completed," Steinmaurer said.

Hong Kong is suffering from a similar bout of level-headedness.

It emerged last week that the Office of the Communications Authority (OFCA) has set a reserve for spectrum in the 3.3 GHz, 3.5 GHz, and 4.9 GHz bands totalling HK$1.24 billion (US$158 million).

"This will be positive to mobile operators in the medium term for 5G network investment," said a research note from DBS Bank, at the time.