T-Mobile sees end to Austrian price war, as new MVNO targets 2014 launch

Austria's operators have been fighting one of the toughest price wars in Europe for several years now, but one operator believes that there is now light at the end of the tunnel as the lowest tariff of €7.50 ($10) is removed from the market.

T-Mobile Austria CEO Andreas Bierwirth told Reuters last week that the race to the bottom may now be over now that 3 Austria has dropped the €7.50 SIM-only tariff under its HalloSIM plans. The low tariff was temporarily adopted from Orange Austria after it merged with Three Austria, but has now been replaced by a €10 plan.

"I see something happening, and to that extent I am cautiously optimistic today that we may have passed a low point in Austria," Bierwirth said.

Telekom Austria will also no doubt be relieved; the company recently told FierceWireless:Europe that the €7.50 plan was "clearly a price where you cannot invest any longer."

Austrian operators still face challenges on several fronts. The recent spectrum auction was described by Telekom Austria CEO Hannes Ametsreiter as a "bitter pill to swallow" after all three operators 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. The total amount to be paid is about €2.014 billion ($2.71 billion) from the auction of frequency blocks in the 800 MHz, 900 MHz and 1800 MHz bands.

The operators have complained to the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) about the high prices, and Bierwirth told Reuters that said T-Mobile, which paid €654 million for the frequencies it bought, planned a legal challenge.

"We will start by demanding that the auction be declared null and void on the grounds of a failure of due process," he told the news agency. "It is already decided internally that we will go through with legal steps."

Prices also remain highly competitive on the market, although following H3G's acquisition of Orange Austria there are now three rather than four competitors on the market. At the same time, Hutchison Whampoa's H3G was forced to comply with a number of obligations as part of the merger, one being to offer cheap wholesale access to mobile virtual network operators (MVNOs).

Mass Response has now become the second company to confirm it will take advantage of this deal after Liberty Global, according to Reuters. On its Web site, the company said its "ambitious goal" is to gain 100,000 new customers in its first year in the three areas of B2C, B2B and M2M. The company is a former unit of Telekom Austria and provides interactive services for television and media companies, among other services.

Nevertheless, T-Mobile Austria's Bierwirth told Reuters that the market could absorb up to 10 such MVNOs.

For more:
- see this Reuters article
- see this separate Reuters article

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