Austrian Regulatory Authority (TKK) completes multiband auction, raising total revenues of approx. EUR 2.014 billion

Press release dated 21 October 2013

Austrian Regulatory Authority (TKK) today completed the auction for the 800 MHz, 900 MHz and 1800 MHz frequency ranges, resulting in revenues of approx. EUR 2 014 million for the Republic of Austria. The total frequency blocks auctioned off were as follows: six in the 800 MHz band, seven in the 900 MHz band and 15 in the 1800 MHz band. The frequency assignment procedure will be completed with legal effect when the official decisions are issued in the course of November.

Three network operators took part in the auction – no new entrants

The only mobile network operators to participate in the multiband auction were the three current Austrian operators A1 Telekom, T-Mobile and Hutchison. A total of 28 frequency packages, each consisting of 2x5 MHz, were awarded to the bidders as follows: A1 Telekom acquired 14 packages for approx. EUR 1 030 million, T-Mobile acquired nine packages for approx. EUR 654 million and Hutchison successfully bid for five packages, paying approx. EUR 330 million.

Auction aimed at efficient frequency use

The main aim of the auction is to ensure an efficient utilisation of frequencies. This is achieved by re-farming and redistributing the GSM frequencies and through technology-neutral utilisation of all three bands (i.e. GSM, UMTS and LTE).

800 MHz frequencies: improved broadband service in rural areas

Another objective of the multiband auction was to move forward efforts to expand mobile broadband service to poorly covered areas. The propagation characteristics of frequencies in the 800 MHz band (referred to as the ‘digital dividend’) make them especially suited as carriers of services to rural areas. A1 Telekom acquired the frequency package designated for this purpose by the regulatory authority.

Failure to meet coverage obligations will result in fines

Each of the parties awarded frequencies will be under obligation to ensure that, by means of the frequency spectrum allocated to that operator, a defined level of mobile broadband coverage is provided by a stipulated date. For the 800 MHz frequency band, the auction rules already additionally specified a certain number of municipalities to be supplied service, with the aim of moving forward the expansion of broadband service to poorly covered rural areas. Penalty regulations apply where coverage obligations are not met.

GSM, UMTS and LTE frequencies allocated for varying periods

Usage rights for the 900 and 1800 MHz bands are currently held for a defined term, so that these frequency blocks will only become available for use at a later stage. The allocation of frequency blocks in the 800 MHz band runs until 31 December 2029, while the allocation in the 900 and 1800 MHz bands ends as of 31 December 2034.

The three mobile network operators are required to deposit the frequency licence fee, as determined in the auction procedure, within four weeks of the frequency allocation decision becoming legally effective. The Republic of Austria is the recipient of the payment.

Additional information will be published on the regulatory authority’s website at www.rtr.at/en/tk/multibandauktion.