Telekom Austria echoes T-Mobile optimism over end to domestic price war

Telekom Austria became the second Austrian operator in recent weeks to cautiously predict that the price war on the domestic market may soon be over, with the company's CFO now hoping it will stabilise its core profits next year.

Austria has for some years been one of Europe's most fiercely fought mobile markets, with 3 Austria until recently marketing a price plan including 1 GB of data for as little as €7.50 (around $10) per month.

The ending of that price plan and the recent expensive spectrum auction that has hit all three operators hard, combined with the fact that the number of operators has fallen to three from four following 3 Austria's merger with Orange Austria, caused T-Mobile Austria's CEO to say recently that the race to the bottom may be over.

Now, Telekom Austria CFO Hans Tschuden said he is also more confident that an end to the price war may be in sight: "There is now a more rational approach to the market than there was before," he said during the Morgan Stanley Technology, Media & Telecom Conference in Barcelona, Reuters reported. Tschuden added that if all goes well, Telekom Austria should be able to see a stabilisation of EBITDA in Austria.

This stabilisation will also be achieved through cost cutting and a review of the operator's handset subsidy policy, which could see a reduction in the subsidies provided by Telekom Austria. Tschuden added that tariff increases imposed by Telekom Austria ahead of the Christmas season should also send "a strong signal to the market," Reuters reported.

On the subject of M&A, Tschuden said there are no projects ongoing, with any acquisitions clearly requiring a capital increase. Carlos Slim's América Móvil also recently ruled out a hostile takeover of Telekom Austria, in which it owns around 23 per cent.

For more:
- see this Reuters article

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