Press Releases

4th GSM licence: Connect proposes "two-by-two-model"

- 2 GSM-900 operators plus 2 GSM-1800 operators
- Full usage of the 1800 frequencies
- No regional licences, but full equipment for the four national licences

Connect Austria (ONE) uses the consultation phase announced by Telekom Control in connection with the award of the 4th national mobile licence to propose a “two-by-two model”, which also takes into account the importance of the UMTS technology.

Clear rules

Jørgen Bang-Jensen, CEO of ONE says, “clear rules are important for a positive and competitive development of the mobile market. However, at the moment, there are several points that tend to create more insecurities rather than eliminate them.” Already now, the frequencies market is anything but clearly regulated,” Bang-Jensen continues. This can already be seen from the fact that, with the exception of Mobilkom, all network operators and Tricotel have entered formal objections to the Austrian Constitutional Court and the Commission of the EU regarding different aspects of the award of frequencies. Without the creation of clear rules we would have to fear another “negative trend towards insecurity in the mobile market”.
Bang-Jensen says, “Before finalising the award of more frequencies, one should await the decision of the Constitutional Court about an award of 1800-MHz frequencies to Mobilkom. After all, this decision has an immediate influence on the further scenarios.” According to the ONE Managing Board, this period should at the same time be used to make plans in the right direction.

Weaknesses in award procedure – regulation for UMTS not yet defined

ONE sees inconsistencies for further developments – and thus for the mobile operators – mainly in three points. Eduard Zehetner, CFO of ONE says, “For example, it is not understandable why they don’t release the entire available 1800 band of 2 times 75 MHz for commercial use.”

Furthermore, the use of the 900 frequencies, most of which are no longer needed by Mobilkom´s “D-Netz”, and thus the actual application of the respective EU directive remain open, Zehetner points out.
In July 1998, Connect Austria had entered a formal objection to this point of insufficient application before the EU – the procedure is still running. Finally, a well-balanced division of the three regional frequencies that corresponds to the market volume is de facto not applicable, which basically makes the award of regional licences very difficult. Zehetner says, “It is evident that a third of the country does not correspond to a third of the population and thus of the purchasing power.” And what would make even less sense would be to award narrow 1800 frequencies to be used nation-wide according to indiscriminate distribution, which would be nothing more than an additional income (?) for the existing operators.

“Two-by-two model” for fair conditions and strong competition

Jørgen Bang-Jensen on the model presented by ONE, “What is important is to create the right preconditions for four strong operators and introduce clear regulations for the start into UMTS.”

1. Two times 1800
The third (Connect Austria) and fourth operators of national 1800 licences receive – before the introduction of the UMTS standard in 2002 - 50% each of the 75 MHz of the GSM-1800 range dedicated to public mobile voice telephony. This includes the 22.5 MHz already awarded to Connect Austria. For the 4th licence, which would then be well equipped with 37.5 MHz, the Government could obtain a suitably high licence fee.
With an available frequency of 37.5 MHz each, both operators would be able to offer part of the services available in UMTS, such as high data transmission rates up to 2 Mbit (with 2 Mbit, data can be transmitted about 16 times faster than with ISDN).

2. Two times 900 plus UMTS starting 2002
The two operators in the 900-MHz range (Mobilkom and max.mobil) receive no frequencies from the 1800 range, but the binding confirmation that they will be the first operators to start fully with UMTS from 2002. For this purpose, it would be necessary to amend the Austrian telecommunications law, which would grant Mobilkom and max.mobil frequencies from the UMTS range (these frequencies lie above the GSM-1900 spectrum). Mobilkom and max.mobil would thus be the first providers to offer full UMTS services, for example a connection of GSM telephony and satellite-supported telephony.
Moreover, frequencies from “D-Netz” should also be given to Mobilkom and max.mobil soon, in order for them to be able to solve capacity shortages arising in their networks until 2002.

The managers of ONE think this “two-by-two model” would ensure that all parties involved are properly equipped with frequencies at clear conditions and guarantee a fair transition to the age of UMTS. Bang-Jensen says, “This means best possible security in planning and optimum use of existing resources for all operators.”

Present status of awarded frequencies: 12.1 MHz unused
2 x 22.5 MHz
dedicated to Connect Austria

2 x 5 MHz
dedicated to existing GSM operator 1 (§ 125 section (3) TKG)

2 x 5 MHz
dedicated to existing GSM operator 2 (§ 125 section (3) TKG)

2 x 14.6 MHz
dedicated to 4th mobile licence (national)

2 x 15.8 MHz
dedicated to so-called “regional licences”

2 x 62. 9 MHz in total

What remains unclear for Eduard Zehetner is the fact why the supreme Austrian telecommunications authority (Oberste Fernmeldebehörde) has not yet made the 12.2 MHz still unused according to the present planning available for commercial use – “This should be clarified as soon as possible. After all, the Austrian telecommunications law prescribes a best-possible use of frequencies.”