Sept. 27 (Bloomberg) --- Austria offered two blocks of wireless spectrum reserved for new carriers to existing operators in a sign that it may have failed to attract new bids, according to two people with knowledge of the matter.
The airwaves, which had been set aside for bidders who don’t own any spectrum, were offered to Telekom Austria AG (TKA), Deutsche Telekom AG (DTE) and Hutchison Whampoa Ltd. (13), said the people, asking not to be identified because the process is confidential. Daniela Andreasch, a spokeswoman for the Rundfunk & Telekom Regulierungs regulator, declined to comment.
The offers mean Austria’s carriers may not face a new competitor for years to come. The spectrum blocks were part of a bigger auction that started this month with minimum bids totaling 526 million euros ($713 million). Operators need the frequencies to build faster networks based on the so-called long-term evolution technology.
Reserving the two blocks for a new entrant was a condition for the European Commission’s approval of Hutchison’s takeover of Orange Austria last year. That transaction reduced the number of mobile carriers in the country to three from four.
Cutting the number of operators could ease the pressure in a market with prices more than 50 percent below the European average, according to consulting firm Booz & Co. All three operators introduced tariffs this year that charge customers based on the volume and speed of data they choose. They had mainly offered flat-rate tariffs before.
“We believe that the Austrian mobile market remains competitive post consolidation, but prices seem to be stabilizing,” Vera Sutedja, a Vienna-based analyst at Erste Group Bank AG, wrote in a note this week.
Telekom Austria, which climbed as much as 7.6 percent earlier today, traded 2.1 percent higher at 6.05 euros as of 4:36 p.m. in Vienna. Deutsche Telekom slipped 1 cent to 10.80 euros in Frankfurt. Hutchison, based in Hong Kong, added 0.2 percent to HK$94.15 on the local exchange.
Speculation about a possible takeover by Carlos Slim’s America Movil SAB (AMX:US), which holds a 23.7 percent stake in Telekom Austria, also contributed to the share increase this week, Usman Ghazi, a London-based analyst at Berenberg Bank, said by telephone yesterday.
A one-year period during which Slim would have to pay a 60 percent premium to Telekom Austria’s current share price if he made a buyout offer to minority shareholders ended on Sept. 25.
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