Austrian operators file complaints over spectrum auction of 800 MHz, 900 MHz and 1800 MHz

Austria's operators are lining up to complain about the high price they are being forced to pay for new mobile spectrum after the country's recent auction raised around €2 billion (US$2.7 billion) from the three leading players.

According to Reuters, Hutchison Whampoa's Austrian unit H3G, or 3 Austria, has now said it will appeal against the result of the auction. Deutsche Telekom's T-Mobile Austria told Reuters it also plans a legal challenge, while Telekom Austria said it will decide next month whether to appeal.

Reuters said T-Mobile Austria and H3G are appealing to the country's highest constitutional and administrative courts to order a re-run of the auction. They claim that the conditions were designed to maximise profits and were not in the interests of competition.

Telekom Austria has said separately that it sees the auction costing it €90 million a year. In an interview with Austrian investor newsletter Boerse Express, Telekom Austria CFO Hans Tschuden said the company would write down its €1.03 billion bill for the Austrian auction at €50 million per year over 20 years, while the financing costs would add another €40 million.

"In total that gives a profit impact of €90 million per year," Tschuden said.

The three operators have previously said they have paid among the highest prices for spectrum in Europe in a market that has among the lowest mobile tariffs in the region.

In late October, the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) said it raised about €2.014 billion from the auction of frequency blocks in the 800 MHz, 900 MHz and 1800 MHz bands.

At the time, Telekom Austria CEO Hannes Ametsreiter said the operator was pleased with the spectrum package it had been able to acquire--but said the high price it had to pay was "a bitter pill to swallow." 3 Austria CEO Jan Trionow claimed that the outcome of the auction was a disaster for the industry as a whole.

For more:
- see this Reuters article
- see this Boerse Express article (translated by Google Translate)

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