Austria
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Austria |
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1. Background The first candidates to offer services via their alternative telecommunications infrastructure have been energy utilities and railway companies. The major factors hindering the launch of commercial services of alternative network operators were the infrastructure monopoly of PTA and the insecure regulatory environment. The infrastructure monopoly of PTA has been lifted only once when energy utilities were allowed to convey calls from the second mobile operator max.mobil on their networks. Until the end of 1997, UTA (United Telecom Austria) and tele.ring had negotiated "probational approvals" for "commercial testing" of alternative infrastructure with the regulator. The new Telecommunications Act improved the environment for alternative network operators considerably. Not only that the framework for future investments is rather clearly visible and the objective of promoting entry into the market clearly stated but many of the disputed regulations concerning dominant operators, rights of way and interconnection are more in favour of entrants. The end of the year 1997 showed intensified activities to complete the regulatory framework necessary for the "big bang" in 1998. The Supreme Telecommunications Authority issued ordinances on numbering and interconnection. Telekom Control has issued 17 licences for voice communication and/or leased lines (see below). Alternative infrastructure providers had been negotiating interconnection agreements with PTA but had to refer the case to the for determination. Nonetheless, competition on a broad basis is due to develop not at January 1st but in course of 1998. The following table gives a brief overview of Austrian licensees and their activities. Those three alternative infrastructure operators which have been actively preparing for market entry since 1997 are described in more detail in Part 2.
Since this survey:
It is important to note that competition focuses, to a large extent, on business customers. It coincides that enterprises are willing to change their telecommunication service provider: According to a survey of ADL about 81% of enterprises are willing to take up the offers of alternative providers. Furthermore, private households will be able to benefit from reduced tariffs for international calls. A number of licensees are planning to act as an access network provider (e.g. Cybertron, tele.ring, RSL Com, UTA). A recent survey revealed that 17% of firms which do international calls already have been using the services of alternative operators. The most important arguments for using new operators are smaller tariffs. The majority of firms which tried new operators was satisfied with the services offered. Citykom Austria started as a co-operation of the public utilities of 7 towns to use their infrastructure for telecommunications purposes. Competitive advantages for Citykom Austria are expected to come from its closeness to regional markets, well established relationships with potential telecommunications customers through their core activities, the ability to construct and/or expand town networks for telecommunications purposes at comparatively low prices and in short time periods. Citykom Austria intends to become a full service provider within the regions of the stakeholders. Citykom was the first alternative infrastructure operators to announce a strategic alliance with an international telecommunications operator. Mannesmann Eurokom - the German mobile and fixed network operator - will take over 49,9% of Citykom Austria shares and will deliver relevant know-how for network roll-out. Citykom plans to become operational by January 1999. Its services (voice telephony, data transmission and Internet access) will be mainly centred towards residential customers bringing the benefits of the liberalisation process to this market segment. Citykom was issued a full telecommunications license on the 17th of December 1997. Citykom envisages to employ around 1000 employees, a turnover of AS 2,1 billions and a market share of 7,5% by the year 2004. Presently 100 persons are employed. 2.2. UTA (United Telecom Austria) UTA was a consortium of 9 regional energy utilities, each with its own telecommunication infrastructure. UTA holds a 10% stake in the second GSM operator max.mobil and already conveys calls from max.mobil on its network. The alliance with max.mobil also offers the opportunity to jointly market mobile and fixed-network services. Presently about 400 people are employed in marketing, network management and distribution. UTA has been issued a licence for voice telephony and leased lines and started a media campaign to announce its services to a wider audience in March 1997. At the same time it has been negotiating a co-operation agreement with an international partner. In September 1997, UTA negotiated a resale agreement with Gobal One and will therefore be the national distributor of Global One services. In May 1998, UTA announced that 50% of stocks plus one share were sold to Swisscom. The selling price and information on the current situation of UTA were not released. UTA focuses its business activities on enterprises with more than ATS 400.000 - annual telecommunications spending and intents to serve 15% of the telecommunications market in the medium term. Since October 1998, UTA has been offering national and international calls to private customers by acting as an access network provider. UTA´s roll-out of services proceeded as follows: since March 1st, UTA has been offering countrywide telephony services for business customer with at least 15 mainlines. Since mid of March voice telephony services have been offered to SMEs, small offices or home offices (SOHO, 2 mainlines or more) and residential customers in four selected areas. In October 1998, indirect access has been available to all telecommunication customers. A decision of the regulator to allow for single stage dialing was in favour of UTA. UTA expects that high volume customers can save up to 35%, residential customers up to 20% of their telecommunication expenses compared to present PTA tariffs. The reduction arises not only from lower tariffs but also from per second billing and increased local area zones. Overall UTA expects a market share of 10% after 10 years. tele.ring was a joint venture of Verbund Telekom (V-Tel), a subsidiary of the energy utility Verbund, and ÖBBTel, a subsidiary of Austrian railways company. The majority of shares of Verbund (i.e. 51%) and ÖBB (i.e. 100%) are controlled by the Republic of Austria. tele.ring combines the alternative infrastructure of both companies and manages a nation-wide network of more than 7700 km in length of which about 1500 km consist of fibre optic cables. tele.ring will set up a backbone network using SDH-technology of about 1700 km by the end of 1997. Mannesmann Eurocom acquired 74,8% of tele.ring for ATS 2 billions from Verbund and ÖBB. ÖBB´s infrastructure which is necessary for its rail business is not included in the deal. Mannesmann will integrate its interests in Citykom and tele.ring to form a single telecommunication operator in Austria. Combined offering of services is scheduled for the third quarter of 1998. Mannesmann is also interested in future mobile licences in Austria. tele.ring received a licence for the operation of leased lines, voice telephony and the operation as access network operator (indirect access). tele.ring presently offers data transmission services and intents to enlarge its product range in the thirst quarter of 1999 towards voice telephony for large and medium telephony customers (via ISDN) and international calls for all customer groups via indirect access (billing either through itemised billing in the PTA invoice or as a tele.ring customer). Access to the customer will be accomplished by radio, WLL or cable and interconnection. tele.ring presently employs about 200 people (estimated). A substantial increase of this number was forecasted for the fourth quarter of 1998. 3. Employment effects of telecom liberalisation in Austria The monthly report No. 7/97 of the Austrian Institute of Economic Research presents a study on likely employment trends in the telecommunications sector up to the year 2000 (Leo, H., Beschäftigungsentwicklung in der Telekommunikation, Wifo-Monatsbericht 7/97, Wien, 1997). The analysis of the employment situation in the Austrian telecommunications sector includes Post & Telekom Austria (PTA), the mobile communications operators, alternative network providers, value-added service providers, cable operators and the telecoms equipment industry, i.e. those sectors that are directly affected by liberalisation. Together they employ some 36,000 people. In general, prospects are good that employment in the telecommunications sector will grow despite liberalisation. The decisive factors for this are moderate staff cuts at PTA, the generally positive development of the mobile communications sector (including paging services) and a likely increase in the number of alternative infrastructure providers, cable companies and value-added service providers. As to equipment manufacturers, it is assumed that employment will not change significantly. In total, his results in an expected shift of -350 to +3,000 between late 1997 and 2000. Indirect impacts of investments, etc. on other fields are not included in this figure. Alternative infrastructure operators employed around 200 people by the end of 1997. Up to the year 2000 further 1000 - 2000 employees will be added. The absolute increase in employment is to a large amount dependent on the entry into voice telephony - the earlier operators enter this market the higher employment increases will be. |
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