Report: Tele2 eyes LTE spectrum as Austria preps auction

Austria's LTE spectrum auction is set to take place this September, with one report indicating that four bidders could be lining up, including Swedish operator Tele2.

Citing unnamed "informed sources," Austrian newspaper WirtschaftsBlatt reported that alternative fixed operator Tele2 may bid for spectrum alongside incumbent mobile operators Telekom Austria's A1, T-Mobile Austria and Hutchison's 3 Austria,. Tele2 might bid for two blocks of spectrum in the 800 MHz frequency band that have been reserved for a potential new entrant.

A spokesperson for Tele2 was not immediately available for comment, according to Dow Jones Newswires.

Getting access to these radio frequencies would allow Tele2 to build its own LTE network and also offer competitive multi-service bundles of fixed and mobile services in the competitive Austrian market.

However, some experts are far from convinced that the market can support a new entrant, and indeed the number of players only recently shrank from four to three after Hutchison acquired Orange Austria earlier this year.

"We have really passed the stage where there is room for a new entrant," Bengt Nordstrom, co-founder and chief executive of Swedish telecoms consultancy Northstream, told Reuters.

Nevertheless, the Austrian Telecom Control Commission (TKK) has set out a clear package for a new entrant, including the reserved frequency blocks, the option to take over sites and buy spectrum in the 2.6 GHz band and the use of national roaming. A refarming plan for spectrum used by existing GSM services will also be created.

According to Reuters, Austria aims to raise at least €526 million from the auction of 28 2x5-MHz blocks of 800 MHz, 900 MHz and 1800 MHz frequencies. Of this sum, €45.6 million relates to the spectrum reserved for a new entrant.

However, operators already spooked by the recent suspension of the LTE auction in the Czech Republic over escalating bids are worried that total costs could reach €1.5 billion, and also say that the auction process outlined by the TKK this week is too complex. The TKK has also taken a tough line with operators to ensure that collusion on bids does not take place.

According to the TKK timetable, the tender submission period ends on June 10, 2013.

For more:
- see this WitschaftsBlatt article (translated via Google Translate)
- see this Reuters article
- see this Bloomberg article
- see this Dow Jones Newswires article
- see this TeleGeography article

Related Articles:
Mallinson: Spectrum auctions need to generate investment, not just government revenue
Telekom Austria shies away from giving 2013 profit forecast
Hutchison's €1.3B Orange Austria bid faces T-Mobile challenge
Hutchison set to get green light for Orange Austria buy
EU to launch 'full probe' into Hutchison's takeover of Orange Austria
Hutchison offers MVNO access to Orange Austria to gain regulators' approval

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