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T-Mobile Austria challenges spectrum auction terms

A T-Mobile logo is seen atop a store in Beverly Hills, California August 31, 2011. REUTERS/Danny Moloshok
A T-Mobile logo is seen atop a store in Beverly Hills, California August 31, 2011. REUTERS/Danny Moloshok

By Georgina Prodhan and Angelika Gruber

VIENNA (Reuters) - T-Mobile Austria has filed a challenge to the terms of an auction due to be held in September for frequencies that will enable operators to build fourth-generation (4G) networks, its lawyer said.

The move may create uncertainty around the auction for the 4G Long-Term Evolution (LTE) networks, which aims to raise at least 526 million euros ($698 million) and is necessary before 4G networks can be rolled out nationwide.

Europe, which led development of the globally used GSM standard in the 1980s, now lags the United States, Japan and South Korea in next-generation mobile technology - with the exception of Scandinavia where the first LTE networks were built.

Neelie Kroes, who is vice-president of the European Commission and in charge of its digital policy, last week said delays to 4G spectrum auctions that were supposed to have happened at the beginning of the year were hurting the economy.

T-Mobile, a unit of Deutsche Telekom and the second-biggest of Austria's three mobile carriers, says the regulator has no right to sell the frequencies as set out in the auction terms because some of them still belong to T-Mobile.

Some of the spectrum is being made available from 2016, but T-Mobile says it has rights to use this spectrum until the end of 2019. The frequencies have a book value of several million euros (dollars).

Lawyer Ewald Lichtenberger, who is acting for T-Mobile, told Reuters this week: "This is an issue that I believe must be clarified before the auction because later it would create big problems."

He said a request to the broadcasting and telecoms regulator had been filed some weeks ago.

A T-Mobile Austria spokesman also confirmed that the complaint had been filed.

The regulator declined to comment. It has six months to respond to the complaint - taking it past the auction date.

Austria's biggest mobile operator, Telekom Austria, , and smaller Hutchison Drei Austria <0013.HK> also own spectrum that is being offered for sale. Both declined comment.

T-Mobile Austria is also fighting a legal battle to wind back the allocation of frequencies resulting from Hutchison's takeover of Orange Austria at the start of this year, which it said put it at a disadvantage in building 4G networks.

(Reporting by Georgina Prodhan; Editing by Charlotte Cooper)

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