Austria has raised about €2.014bn in its multiband 4G spectrum auction, with Telekom Austria’s (TA) contributing about half the amount.
TA’s mobile unit A1 Telekom paid about €1.03bn for 14 spectrum blocks, the Austrian Regulatory Authority…
Austria has raised about €2.014bn in its multiband 4G spectrum auction, with Telekom Austria’s (TA) contributing about half the amount.
TA’s mobile unit A1 Telekom paid about €1.03bn for 14 spectrum blocks, the Austrian Regulatory Authority (TTK) said. Deutsche Telekom’s T-Mobile paid €654m for nine blocks, while Hutchison Whampoa’s H3G paid €330m for five blocks. No new market entrant took part.
TA acquired half of the available spectrum: four blocks in the 800 MHz band, three in the 900 MHz band and seven in the 1800 MHz band.
TA to pay in cash and additional debt
Telekom Austria said it will finance its spectrum acquisition with existing cash and “additional debt”, without going to details. The incumbent said its rating target remains BBB (stable), and it therefore intends to repay debt from operating cash flow.
There has been considerable speculation that the Austrian incumbent will carry out a capital increase to help raise funds. Full payment is required within about eight weeks.
TA CEO Hannes Ametsreiter said that while the company is very happy with its “excellent spectrum package”, the high price tag “is a bitter pill to swallow”. TA had been expected to spend between €300m and €500m in the auction.
TA contended that its acquisition of two-thirds of the immediately-available 800 MHz spectrum leaves it well-positioned to roll out an LTE network nationwide.
Meanwhile, T-Mobile said it obtained nine spectrum blocks: two in the 800 MHz band band, three in the 900 MHz, and four in the 1800 MHz band.
T-Mobile said that while its acquired spectrum provides the “prerequisite” to develop LTE services, it criticised the “exorbitant” prices.
H3G also criticised the auction terms in a statement, but said it managed to minimise financial damage.
Licence periods for the 800 MHz spectrum run until 31 December 2029 and, for the 900 MHz and 1800 MHz spectrum, until 31 December 2034.
Austria’s ministry for transport, innovation and technology announced earlier this year that €250m of the proceeds from the auction will be put toward broadband investments and research and development grants.
A total 28 blocks were auctioned: six in the 800 MHz band, seven in the 900 MHz band and 15 in the 1800 MHz band. The frequency assignment procedure will legally conclude when official decisions are issued in November, the regulator explained.
