New 5G frequencies auctioned in Austria

39.4 million euros were raised from an auction of radio frequency rights for mobile services in Austria. The usage rights in the 2600 MHz range, auctioned in 2010, expire at the end of the year, necessitating a new allocation. Additionally, the regulatory authority TKK (Telekom-Control-Kommission) has allocated the unpaired frequency block from 2300 to 2360 MHz for the first time.

The amount raised is almost the same as the 39.5 million euros from 2010 (File No. F4/08). However, more frequency spectrum went under the hammer this time, and for significantly longer terms, meaning the price per megahertz, bandwidth, and year has fallen considerably. On the one hand, there are now only three nationwide mobile network operators in Austria, whereas in 2010 there were four.

On the other hand, maximizing revenue was explicitly not a goal of the allocation procedure (File No. F2/24), which concluded on Friday. Instead, the aim was to promote the efficiency of frequency use, competition, innovative business models, and mobile coverage in terms of coverage and quality.

The Result

Magenta (T-Mobile Austria) secured the 2300 MHz block, awarded for the first time. The subsidiary of Deutsche Telekom is paying 4.2 million euros for the 60 MHz. Drei (Hutchison Drei Austria) is paying the same amount for 50 MHz of unpaired spectrum, of which, however, only the 40 MHz from 2575 to 2615 MHz are freely usable. Drei already holds half of this in 2010; the other half must be vacated by A1 (Telekom Austria) at the end of the year. The lower price could be due, among other things, to the fact that several neighboring countries use this spectrum for air force purposes, potentially causing interference near the border.

For the paired frequencies in the 2600 MHz range, there is only a minor defragmentation of usage rights; the allocated bandwidth remains unchanged compared to the current status. A1 and Drei each receive 2x25 MHz for a price of just over eleven million euros each, while Magenta pays just under nine million euros for its 2x20 MHz. The 2600 MHz rights run until at least 2046, but possibly until 2050 or even 2055. The latter would be the case if radio technology and regulatory requirements for time-division duplex (TDD) develop positively by the end of 2042. The network operators agree on a reallocation of their frequency rights, and actually put TDD into operation by 2046 at the latest.

In 2010, Orange Austria (formerly One) acquired 2x10 MHz. However, at the beginning of 2013, Drei took over the mobile competitor Orange. On the same day, Drei sold Orange's discount subsidiary Yesss to market leader A1. The 2600 MHz frequency rights of Orange were divided between A1 and Drei.

Coverage Obligations

Each network operator must use the paired frequency blocks at 1,400 base stations by the end of 2029 at the latest, at 1,600 base stations by the end of 2032, and at 2,000 base stations by the end of 2036. Both Drei and Magenta must use the unpaired frequencies at 250 base stations each by the end of 2029 at the latest, at a minimum of 600 base stations by the end of 2032, and at 1,000 base stations from the end of 2036. Unpaired blocks are generally used for the downlink (from the mobile network to the end device).

A series of TKK decisions shows that Austria's mobile operators do not always fully comply with their coverage obligations. In the multiband allocation procedure of 2020 (File No. F1/16), each operator selected specific, underserved cadastral communities that they pledged to cover by 2022. None of the three mobile operators fully achieved this. Market leader A1 has the largest backlog; according to decisions from this year, it has not sufficiently supplied 33 out of the 349 self-selected communities (File Nos. F 4/23, F3/24, F3/25). Therefore, A1 is to pay a penalty of 1.32 million euros.

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