In concert with the European Union’s directive to liberalize the telecommunications market in Europe, Austria plans to permit a second, privately owned mobile phone license by the end of the year.
Austria’s Ministry for Public Economy and Transport recently issued a tender for a Global System for Mobile communications license, with applications and business plans from interested parties due Oct. 13, according to Waltraud Augesky, commercial specialist for the United States Embassy in Vienna, Austria. Officials expect the license will be awarded by the end of the year.
As Ewuropean countries open their markets, the European Commission is keeping a watchful eye to ensure license fees do not discriminate against incoming mobile phone operators. But what fairness measures Austria plans to take is “not quite clear yet,” noted Augesky.
She said the chosen consortia will likely pay upwards of 1 billion Austrian schilling, or $98 million, for the license. The license term is 15 years, with an option to renew for 5 more years, said Augesky.
For a second carrier to begin operations, spectrum allocation needs to be restructured, sources said. Currently, the Post and Telegraphenverwaltung, which offers analog and digital mobile phone service, occupies all available GSM frequencies. Augesky reported that spectrum at 900 MHz has been apportioned for the new GSM rival.
As a member of the European Union, Austria is required to expunge its government monopoly in telecommunications to promote competition by Jan. 1, 1998. However, the Austrian government wants the second operator to begin service next year, ahead of schedule.
Several prospective licensee consortia have been identified, including a handful of U.S. companies. The United Telecom Austria group, comprised of three provincial utility companies, perhaps may add foreign investors. Austracom is made up of electric company Verbund and Credit Anstaldt bank, both of Austria, and Mannesmann Eurocom and RWE utility company both of Germany. Austrian bank Gutmann, industrial conglomerate Montana and Bell Atlantic Corp. were named in a third prospective group applying for the license. Bell Atlantic would not confirm any involvement.
Augesky identified key criteria directing the Austrian government’s selection process: business plans, experience in telecommunications, financial strength and license fee offered. Augesky noted entities with Austrian majority ownership have an advantage in the selection process.
Other possible U.S. investors cited include U S West Inc., BellSouth Corp., SBC Communications Inc., Ameritech Corp., AirTouch Communications Inc. and AT&T Corp. Foreign candidates include Cable & Wireless plc, Deutsche Telekom, France Telecom, Telecom Finland, U.K.-based Vodafone and Unisource Mobile, the wireless division of the Unisource alliance of several European post, telephone and telegraph entities.
Austria’s PTV began offering Total Access Communications System service in 1990 and its GSM system was launched last year. In July, the PTV reported a total of about 314,000 subscribers among three networks, representing a 3.93 percent penetration rate. Of this number, about 235,000 are TACS/analog customers.
The PTV said it plans to expand its GSM network to serve a potential 300,000 subscribers by the end of the year, with equipment and support delivered by Motorola Inc.
