Start of the UMTS/IMT-2000 frequency allocation in Austria

Minimum bid and tender conditions have been determined

Press release dated 10 July 2000

In the meeting of 3 July 2000, the Telekom-Control Commission determined the minimum bids for the frequency packages and agreed on the detailed tender conditions for the frequency allocation of the third generation mobile communications systems.

Detailed tender conditions

The tender document is also accompanied by a draft of the Licence and Frequency Allocation Document which contains, among other things, provisions on coverage obligations, infrastructure, national roaming and network access. All standards of the IMT-2000 family will be permitted. The licence area will be the territory of the Republic of Austria, the licence duration was determined to be 20 years as of licence award.

Coverage obligations to an extent quite common internationally

Coverage obligations to an extent quite common internationally (including contractual penalty) will be imposed on the licensees: 25 % coverage on a commercial basis shall be achieved by 31 December 2003 and 50 % by 31 December 2005. Coverage shall be provided by means of a self-operated network. In the covered areas a carrier service at a data rate of at least 144 kbits/sec shall be offered.

Infrastructure and infrastructure sharing

The shared use of antenna masts is laid down in the Telecommunications Act (TKG). Accordingly, the owners or those otherwise entitled to use an antenna mast or a power line mast have to permit its shared use by holders of a licence for the provision of a public telecommunications service if this is technically feasible, in particular with regard to frequencies.

National roaming obligatory for 3G-2G, optional for 3G-3G

GSM operators (2G) licensed in Austria are obliged to make available, at an appropriate fee, network capacities to holders of UMTS/IMT-2000 licences (3G) who do not hold a 2G licence in Austria (national roaming). A new entrant may make use of national roaming for a maximum period of four years after a minimum roll-out of his own network (i.e. 20 % coverage) has been achieved.

In areas not covered, under the coverage obligation, by means of a self-operated network it is possible to conclude agreements under civil law with regard to national roaming 3G-3G (roaming between national UMTS/IMT-2000 networks). However, there exists no legal obligation for that.

Minimum bid

To be able to participate in the auction, the bidders shall submit a minimum bid for each frequency package applied for.

For a frequency package (2x5 MHz) in the paired band the minimum bid is ATS 700 million. The minimum bid for a package (1x5 MHz) in the unpaired range is ATS 350 million.

All minimum bids submitted must be secured by a bank guarantee of the same amount.

A total of 17 frequency packages - 12 frequency packages (of 2x5 MHz each) in the paired band and 5 frequency packages (1x5 MHz) in the unpaired band – will be put up for auction. The total spectrum – rated on the basis of minimum bids - corresponds to an amount of ATS 10.15 billion.

Two-stage award procedure pursuant to TKG

After receipt of the bids, in the first stage the Regulatory Authority will review the technical and economic prerequisites according to art. 15 sec 2 subpar 1 and 2 TKG. The business plans of the bidders, the technical roll-out plans, the legal and financial situation as well as the ownership structure will be examined. Bidders not complying with the prerequisites will not be admitted to the frequency award procedure pursuant to art. 49a sec 6 TKG.

Furthermore, it will be checked if bidders are under common control of a group of companies. In such case a preliminary auction for participation in the frequency auction will be held for each group of affiliated companies and only one bidder each will be admitted to the auction.

In the second stage of the award procedure the 17 frequency packages will be put up for auction. The auction will follow an open upward simultaneous multiple round format in two stages. Those interested will have the opportunity to follow the auction live on the TKC home page

Auction will be held in November

In the first stage of the auction 12 frequency packages of 2x5 MHz each in the paired band will be auctioned off as basic set of frequencies. In order to obtain a licence the bidders have to buy at least two frequency packages but may not bid for more than three packages in the first stage. Thus, as the auction proceeds, the number of licences will be determined; accordingly, four to six licences are possible.

In the second stage a total additional spectrum of 25 MHz (5 packages of 5 MHz each) in the unpaired band is available to the successful bidders of the first stage. Each bidder may buy a maximum of two packages plus the maximum of one package from the packages in the paired band which may have not been sold during the first stage.

„There has been speculation for a long time about the value of the UMTS licences, bordering on hysteria. The fact is that we will know for sure the value of the licences as result of the play of the market forces only at the end of the auction", says Dr. Heinrich Otruba, spokesman of the Telekom-Control Commission.

Milestones for the allocation of UMTS/IMT-2000 frequencies

The period for the submission of bids is from 10 July 2000 until 13 September 2000. If required, an auction for the elimination of affiliated companies will be held in October 2000. The auction will start in November, the frequencies will be allocated to the "winners" within 2 weeks of the end of the auction.

The tender documents can be obtained from the TKC home page.