Austria's new mobile telecom players to halt price rises: RTR

Fri Oct 10, 2014 6:45am EDT
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By Shadia Nasralla and Angelika Gruber

VIENNA (Reuters) - New mobile telecom providers set to enter the Austrian market within months can become real competitors to the established market players by luring hundreds of thousands of customers and halting price rises, the head of regulatory body RTR said.

Hutchison Whampoa 0013.HK unit Drei Austria has to offer wholesale access to its network to as many as 16 mobile virtual network operators (MVNO) which use another company's network to offer telecoms services.

This was a regulatory condition in Hutchison Whampoa's acquisition of Orange Austria in 2013, which was followed by price rises in Austria's telecoms market on average of about 20 percent, according to RTR. Users of phone and SMS services only had to face price rises of around a third since then.

Even though Drei must eventually start opening to MVNOs, almost two years have passed with no increased competition. The European Union's powerful antitrust chief, Joaquin Almunia, has acknowledged the way the EU handled the merger was a mistake.

RTR head Johannes Gungl said new entrants may gain hundreds of thousands of customers in Austria, whose 8.5 million people own around 13.2 million SIM cards.

"It is absolutely realistic to think that these new providers could attract hundreds of thousands of customers within three years," Gungl told Reuters, adding it was likely the new entries will stop further price rises.

"I believe that new providers will and want to differentiate themselves in terms of price because they can't do it through their network, because they are virtual providers... This will certainly soften prices."


Hutchison Whampoa's Austrian telecoms unit CEO Jan Trionow listens during a news conference in Vienna August 19, 2013, after the integration of Orange Austria, which it bought in January .  REUTERS/Heinz-Peter Bader