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Austrian Operators Willing to Relieve Telefonica of UMTS Frequencies

August 28, 2003

As Telefonica Moviles ponders what to do with the pan-European 3G licence albatross around its neck, a number of mobile operators are showing an interest in the unwanted UMTS frequencies in Austria. The Spanish operator, which is also pulling out of the Italian 3G market, has yet to decide whether to sell the licence on, hang on to it and pay penalties for not meeting its rollout obligations, or simply hand the licence back to the government.

According to a report in the Austrian newspaper Der Standard, Mobilkom Austria has expressed a ‘serious interest’ in the unused licence. Rival T-Mobile Austria may also be willing to take the lucrative frequencies off Telefonica’s hands, given the right offer. “If Telefonica approaches us with a concrete offer for its UMTS frequencies, we’ll carefully evaluate this offer and any conditions that may be attached to it,” said T-Mobile CEO Georg Pölzl. Meanwhile, Hutchison Austria’s Berthold Thoma commented, “Everybody wants additional frequencies, as insufficient bandwidth can only be overcome with very high investments.”

Austria’s third largest cellular operator One, however, is not tempted. “Until 2007, when there is expected to be another spectrum auction, our existing frequencies will be sufficient,” its CEO Jorgen Bang-Jensen told the Austrian daily. The smallest of the 3G licensees, Tele-ring, recently voiced its reservations about UMTS and said it was going for a ‘minimum’ rollout, which will make it an unlikely buyer.

The 3G licence conditions stipulate that opeators must have at least 25 percent network coverage by the end of 2003. Telefonica had better make up its mind soon.

 


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