2.6 GHz frequency auction completed – Revenues total EUR 39,5 million

Press release dated 20 September 2010

The Telekom-Control-Kommission (TKK) completed the auction of frequencies in the 2.6 GHz band today. The total proceeds from the auction came to EUR 39.527.109, which will go to the Austrian federal government. The auction thus generated far higher revenues than the overall minimum bid amount of EUR 7.4 million.  

All of Austria’s mobile network operators participated in the auction, in which the available spectrum was assigned as follows:  

A1 Telekom Austria AG acquired 2x20 MHz in the paired band and 25 MHz in the unpaired band, while Hutchison 3G Austria GmbH received 2x20 MHz in the paired band and 25 MHz in the unpaired band.  

Orange Austria Telecommunication GmbH acquired 2x10 MHz in the paired band, and T-Mobile Austria GmbH was assigned 2x20 MHz, likewise in the paired band.  

The regulatory authority expects that the frequencies will be used primarily for high-speed mobile broadband services in areas of high population density, for example using LTE (Long Term Evolution) technology. Georg Serentschy, Managing Director of RTR's Telecommunications Division, explains, “LTE technology enables operators to offer wireless broadband access with top speeds of up to 100 MBit/s. These additional frequencies are important because the use of mobile broadband has skyrocketed in recent years, which in turn has led to bottlenecks in urban areas. Austria’s operators will now be able to offer their subscribers high-capacity mobile broadband services.”  

New auction design and software  

The frequency auction was based on a new auction format which affords participants a maximum of flexibility in terms of bidding strategies as well as ensuring the efficient assignment of frequencies. For example, the auction’s design ensures that operators are only able to acquire contiguous frequency packages, thus preventing fragmentation in spectrum assignments (as has sometimes been the case in the past).

The “combinatory clock auction” is divided into a principal stage and an assignment stage. In the principal stage, a two-step procedure is carried out in order to determine how many frequency packages each winning bidder receives. The purpose of the assignment stage is to decide which specific frequency packages are assigned to the winning bidders. Therefore, the latter stage serves to determine the actual position of each winning bidder’s frequency packages in the available spectrum.  

In contrast to most other European regulatory authorities, which outsource the execution of frequency auctions to consulting firms, the TKK instructed the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) to carry out the auction, thus saving the telecommunications sector a considerable sum of money. For this purpose, a tailored auction software program was developed by an Austrian IT company in accordance with the regulatory authority’s specifications. The auction itself was carried out over the Internet, meaning that the participating companies could submit bids from their own offices. The auction was completed without technical problems.  

Now that the auction has ended, the regulatory authority will proceed to issue the official frequency assignment decisions. The Telekom-Control-Kommission plans to conclude the frequency assignment procedure in October.