A court in Austria said it will rule by November whether to declare invalid the results of the country’s €2 billion ($2.6 billion) spectrum auction in 2013, which at the time was Europe’s most expensive 4G auction on a per capita basis, according to Reuters.
The Austrian business units of Hutchison Whampoa and Deutsche Telekom appealed against the results of the auction, arguing the contest should be rerun (although Hutchison subsequently withdrew its appeal).
Their prime contention was that the auction had been designed to maximise financial returns for the government at the expense of competition in the mobile market.
In particular, they 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 (the country’s regulator said it would not have allowed this to happen).
The fear of losing out altogether drove contestants to higher and higher bids is the allegation.
Another gripe was that no bidder was allowed to know what the others were putting on the table. While this prevented collusion, it was also another lever to ramp up prices.
The country has three operators: Hutchison Whampoa’s 3, Deutsche Telekom’s T-Mobile and incumbent Telekom Austria’s A1 Telekom.
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 said it would invest €1 billion of the auction proceeds in improving the country’s broadband infrastructure. However, the government has yet to spell out what its plan will involve.