A1 scoops half of spectrum spoils; H3G brands process ‘a disaster’ for industry

22 Oct 2013

Telekom Austria Group has announced that its A1 Telekom Austria subsidiary has secured around half of the available spectrum in the Telekom Control Commission’s (TKK’s) ‘combinatory clock’ auction, which concluded recently. A1 acquired 2×20MHz blocks of 800MHz spectrum, 2×15MHz blocks of 900MHz frequencies and 2×35MHz blocks of 1800MHz spectrum, paying a total of EUR1.03 billion (USD1.41 billion) for the bandwidth.

Meanwhile, T-Mobile Austria paid a total of EUR654 million for 2×45MHz of spectrum in the 800MHz (2×10MHz), 900MHz (2×15MHz) and 1800MHz (2×20MHz) bands. Hutchison 3G Austria (H3G) brought up the rear, paying EUR330 million for 2×5MHz of 900MHz spectrum and 2×20MHz of 1800MHz frequencies.

An A1 press statement commented: ‘This new spectrum offers Telekom Austria unique strategic advantages. Having acquired 67% of the immediately available low frequency 800MHz spectrum, Telekom Austria is in an unparalleled position to roll out a leading LTE network across Austria’. However, media reports have quoted CEO Hannes Ametsreiter as describing the inflated EUR1.03 billion price-tag as ‘a bitter pill to swallow’. The total represented a 356% premium on the reserve price attributed to A1’s spectrum. T-Mobile paid a 359% premium, while H3G spent 453% more than anticipated for its own spectrum allocation. Jan Trionow, CEO of H3G, described the auction as a ‘disaster for the industry’ because the high pricing is likely to see rural rollouts abandoned, but noted: ‘Compared to competitors, we managed to minimise the financial damage to the company’.

The purchase prices must be paid in full within eight weeks; licences are valid until 2029 (800MHz band) and 2034 (900MHz and 1800MHz bands).