T-Mobile Austria confirms intent to appeal auction results

The Austrian arm of operator group Deutsche Telekom, T-Mobile Austria, has confirmed its intent to appeal the results of the country’s recent LTE spectrum auction. A spokesperson from the operator told that it plans to appeal to Austria’s Administrative Court and the Constitutional Court next week.

“This is the only legal action we can take,” explained the spokesperson. “There are only two possible outcomes: either our appeal is turned down or the auction is repeated, there is no other remedy.”

T-Mobile won just 2 x 45MHz of spectrum for €654m and 3 Austria took just 2 x 25MHz for €330m. Telekom Austria won four blocks of 800MHz spectrum, three blocks at 900MHz and seven at 1800MHz. This gave the nation’s leading operator a 2 x 70MHz allocation in total for a price of €1.03bn. The auction raised more than €2bn overall; the Austrian government had set an acceptable minimum target of €526m.

T-Mobile said it has three complaints regarding the auction. Firstly it involved selling licences from the beginning of 2016, despite the fact that T-Mobile already holds licences to use those same frequencies until 2019.

“We are effectively being disarmed of frequencies we own,” the spokesperson said. “This is a complaint that we made before auction.”

Secondly, T-Mobile suggested that the prices eventually paid for the spectrum were above its market value, in contravention of the auction rules.

“If one of the three operators was unable to afford spectrum, they would not be able to provide 4G services, and we came very close to that scenario. Therefore, the prices set are at the market value of the entire company, rather than the market value of the spectrum.”

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T-Mobile’s third complaint stemmed from the lack of consultation between the regulator RTR and operators before the auction process was confirmed. The operator said it had a legal right to be consulted and that RTR did not afford it that right; another complaint the operator said it made prior to the auction.

T-Mobile said it will likely file the complaints Monday or Tuesday next week. It has six weeks to file complaints after the end of the auction, but the spokesperson said it must move quickly, as the spectrum costs must otherwise be paid within four weeks of the end of the auction.

T-Mobile was not the only firm to criticise the regulator for its planning of the auction. According to news agency Reuters, 3 Austria’s CEO Jan Trionow said in a statement this week “The auction process was illegal in form and in substance. 3 Austria was considerably harmed. To simply accept this would be irresponsible.”

Industry experts also attacked the auction process. Bengt Nordström of Swedish consultancy Northstream said the result was an illustration of “the insanity of auctions”, favouring the player with the strongest legacy business and greatest capacity for investment. Meanwhile Stefan Zehle, CEO of Coleago Consulting, which specializes in spectrum policy, said that demand for 1800MHz spectrum in Europe means that “governments can hold a gun to operators’ heads and demand almost any price.”

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