Telekom-Control Commission: TETRA licence awarded to TetraCall

Highest bidder pays ATS 66.5 million for digital trunked radio frequencies

Press release dated 8 February 2000

 In the meeting of 7 February 2000, the Telekom-Control Commission decided to award the TETRA licence to TetraCall Bündelfunk Errichtungs- und Betriebs- GmbH. This decision was preceded by a multistage procedure focussing on auctioning the frequency package.

Tetra Call, 50 % of which are owned by WIENER STADTWERKE Holding AG, 45 % by Siemens Aktiengesellschaft Österreich and 5 % by Frequentis Nachrichtentechnik Gesellschaft m.b.H., was awarded the licence in the course of the auction as highest bidder, with a bid of ATS 66.5 million. In September 1999, bids for the TETRA licence had been invited by the Telekom-Control Commission, with a minimum bid of ATS 5 million.

TETRA is a digital trunked radio system which is used by organisations for their internal communication but which also allows for interconnection with other public telecom networks. Among prospective customers of the radio system may be e.g. ambulance services, building or taxi companies. Compared to GSM networks, TETRA offers better group communication and considerably faster call set-up. The licensee TetraCall now has a total of 40 radio frequency channels which can be used in the economic area of Vienna and serve Vienna, its surroundings, Korneuburg, Baden and Mödling.

Auction: 3 bidders, 11 rounds

The licence auction in which two other companies, Center Nachrichtentechnische Anlagen GmbH and Walky Talky Telecom GmbH, took part besides TetraCall was held as multiple round auction on 3 and 4 February 2000. Already on the first day the auction was decided after 11 rounds. Upon completion, the parties involved commented favourably on the efficient course of the auction: the procedure was transparent for all bidders and its handling was considered fair and professionally prepared.

Auction - the optimum procedure for the allocation of scarce goods

"Solely on the basis of analysing the business plans - key word beauty contest - it would not have been possible to decide who of the three bidders shall be awarded the licence", says Dr. Heinrich Otruba, managing director of Telekom Control, about the awarding mode. "But it was possible perfectly well on the basis of the auction bid! We will know the market value of the frequency package only after the auction."

According to Otruba, this auction showed clearly that an auction is the optimum instrument for utilising scarce goods most practically in the intended way. This awarding mode combines objectives in the public economic interest and the justified wish of the auction players for a fair, transparent and non-discriminatory procedure.