Austrian auction decision delayed again

Austrian auction decision delayed again

24 NOV 2014

A decision on the validity of a spectrum auction held in Austria in 2013 has been delayed once again, with a ruling now expected in December, a court representative told Reuters.

The court is deciding whether to annul the auction, which netted the government around €2 billion, and was Europe’s most expensive 4G auction on a per capita basis at the time.

It said in September that a decision would be reached by the end of November. The representative said the decision, which will be final, is now expected in early December and “definitely this year”.

If the court decides to uphold the complaint, the auction would be rerun, delaying the availability of higher-speed mobile services in Austria.

The outcome will also impact the government’s pledge to invest €1 billion of the auction’s proceeds to improve access to high-speed internet services in the country.

The Austrian business units of Hutchison Whampoa and Deutsche Telekom appealed against the results of the auction in November last year, arguing it should be run again.

The main issue was that the auction had been designed to maximise financial returns for the government at the expense of competition in the mobile market.

The operators particularly objected to a condition that allowed individual bidders to acquire up to 50 per cent of the available spectrum, with the risk that one of the three bidders could end up with nothing.

Although the country’s regulator said it would not have allowed this to happen, the complainants said the fear of losing out altogether drove bidders to ever-higher prices.

Another gripe was that no bidder was allowed to know what the others were putting on the table. While this prevented collusion, it was seen by the two operators as another way to ramp up prices.

Telekom Austria paid most in the auction (€1.03 billion for 14 spectrum blocks), followed by T-Mobile (nine blocks for €654 million). Hutchison paid €330 million for five blocks but did not win any spectrum in the most attractive 800 MHz band.

Hutchison withdrew its appeal in June after the Austrian government made its pledge to invest in the country’s broadband infrastructure. However, the government has yet to spell out what its plan will involve.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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