A1 Telekom Austria Group acquires spectrum for EUR 64.3 mn in the Austrian 3.5 GHz band

Today, the A1 Telekom Austria Group (VSE: TKA, OTC US: TKAGY) informs that the Austrian spectrum auction for the 3.5 GHz band (39 blocks with 10 MHz auctioned) has been concluded. A1 Telekom Austria Group’s domestic subsidiary A1 Telekom Austria AG acquired, depending on the region, 100-140 MHz for a total amount of EUR 64.3 mn. This corresponds to EUR 0.063/MHz/population. The auctioned frequency bands will be used for the new 5G network and capacity expansions of the existing mobile network.

3.5 GHz as a 5G pioneer band

With the result of this spectrum auction, the A1 Telekom Austria Group is well prepared for the commercial launch of 5G. Amongst others, 5G is expected to increase the capacity of mobile networks by a factor of 25, for example. In the 3.5 GHz band, eMBB (enhanced mobile broadband) is a particularly important application case.

Auction design

The auction was in the form of a simple clock auction. A total of 390 MHz frequencies, ranging from 3410 MHz to 3800 MHz, were auctioned. The available frequencies were auctioned on a regional basis (12 regions, thereof 6 urban and 6 rural), divided into blocks of 10 MHz each.

Spectrum distribution

The A1 Telekom Austria AG auctioned frequencies in all regions, whereas the number ranges from 100 – 140 Mhz depending on the region.

Subsequent to the auction, the 3.5 GHz spectrum in Austria will be allocated as follows:

	Acquired spectrum in MHz	Share of the allocated spectrum	Duration
A1 Telekom Austria	100-140	~29%	January 1, 2020 – December 31, 2039
Hutchison 3G Austria	100	~25%	As of notification – December 31, 2039
T-Mobile Austria	110	~28%	As of notification – December 31, 2039

Additionally, four regional providers acquired frequencies in selected regions.

The licensing period for the band 42 (3.4-3.6 GHz) starts at January 1, 2020 and is valid until December 31, 2039 while the licence in the band 43 (3.6-3.8 GHz) can be used from the date of the frequency allocation decision until December 31, 2039.

Payment deadline and funding

The purchase price of the spectrum will be payable within 4 weeks after the notification of the frequency allocation decision. The A1 Telekom Austria Group will finance the spectrum acquisition via operational cash flow.