VIENNA: Telekom Austria AG and local units of Hutchison Whampoa Ltd and Deutsche Telekom AG tightened their hold on the Alpine republic's mobile-phone market in a spectrum auction that raised ?2 billion, or US$2.7 billion (RM8.7 billion).
Telekom Austria bought half of the 28 available frequency blocks for ?1.03 billion, the Rundfunk & Telekom Regulierungs broadcast and phone-industry overseer said on Monday.
Deutsche Telekom's T-Mobile unit spent ?654 million on nine packages, and Hutchison's Three division paid ?330 million for the remaining five, the regulator said.
The price tag is "clearly above expectations", said Bernd Maurer, an analyst at Raiffeisen Centrobank.
The auction, the biggest in Austria's history, was delayed by a year after Hutchison agreed to buy mobile operator Orange Austria from Mid Europa Partners LLP last year.
Three and larger operators Telekom Austria and T-Mobile are the only mobile-service providers in the country following the takeover.
No other company took part in Monday's competition, in which the regulator was seeking a combined minimum of ?526 million from all suitors.
For Telekom Austria, negative short-term effects including higher debt and rising financing costs will outweigh positive mid-term prospects for new business, Maurer said.
Six of the 28 frequency blocks offered yesterday are in the 800MHz spectrum, the main segment for larger-capacity long-term evolution technology, and Telekom Austria was allocated four.
LTE networks enable expanded broadband Web access in rural areas while allowing urban customers to browse the Internet faster and stream higher-quality videos.
Operators are likely to "gorge on frequencies because the volume of data is growing so rapidly", said Telekom Austria chief executive officer Hannes Ametsreiter, at a conference on October 8.
"Videos are going to explode and this is posing a gigantic challenge to the networks."
Telekom Austria will finance the acquisition, which has to be paid within eight weeks, with existing cash and new debt, the Vienna-based operator said. The company intends to reduce liabilities via "operational cash flow".
The result of the auction is a "disaster for the industry" because of high pricing, said Jan Trionow, head of Three Austria. "Compared to competitors, we managed to minimise the financial damage to the company." Bloomberg