Fashion Victim

Mention the word "auction" to mobile operators these days and many will break out in a sweat, start to shake, and ask for their mummies. So guess what happened when Austria asked its wireless carriers to put their names forward for an auction of GSM spectrum?

Of the six service providers in the country, one applied willingly (T-Mobile Austria); one applied grudgingly (state-owned Mobilkom Austria AG & Co. KG); and four had disappeared over the Tyrol by the application deadline late last week. The lack of interest from Tele2 AB, tele.ringTelekom Service GmbH, Connect Austria (One), and newcomer Hutchison 3G Austria, means the regulator, Rundfunk und Telekom Regulierungs-GmbH (RTR), will hold an auction in October for six chunks of GSM spectrum but has only two bidders. There is always the possibility, though unlikely, that the numbers will be reduced further by one of the applicants failing to meet all the technical requirements.

Unstrung thinks it's fair to assume the bids will not rise above the minimum price set, which varies between €4 million and €9.6 million for one frequency package, though the conditions of the auction specify that the auction should raise a minimum of €37.6 million for the Federal Finance Ministry. For the regulator's sake, let's hope the Austrian government had not factored any more than that minimum amount into its annual budget.

Maybe someone should let the Austrian authorities know that the days of easy money from wireless auctions are well and truly over.

— Ouida Taaffe, special to Unstrung
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