21.10.2013 – 18:03

Telekom Austria AG

EANS-Adhoc: Telekom Austria AG
Telekom Austria Group acquires spectrum for a total of EUR 1,030 million in Austria (Ad-Hoc)

--------------------------------------------------------------------------------
  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
--------------------------------------------------------------------------------
other
21.10.2013


Vienna, 21 October 2013: The Telekom Austria Group (VSE: TKA, OTC US: TKAGY)
announces that the Austrian spectrum auction for the new 800 MHz band (6 blocks
auctioned) as well as the existing 900 MHz (7 blocks auctioned) and 1800 MHz (15
blocks auctioned) bands has been concluded today. No new operator entered the
spectrum auctions. Thus all spectrum (28 blocks of 2 x 5 MHz each) was available
to the existing operators. Telekom Austria Group's domestic subsidiary A1
Telekom Austria acquired 4 blocks of the 800 MHz spectrum, 3 blocks of the 900
MHz spectrum and 7 blocks of the 1800 MHz spectrum for a total consideration of
EUR 1,030 million. Thus Telekom Austria Group acquired 2 x 70 MHz of spectrum
out of a total available spectrum of 2 x 140 MHz. 

Bidding strategy

In light of Telekom Austria's existing spectrum as well as the spectrum held by
its competitors (significant positions in the 1800 MHz frequency band) prior to
the auction, Telekom Austria Group's bidding strategy was focused on the 800 MHz
spectrum as well as retaining its vital position in the 900 MHz band during the
main round (so called "clock round"). The comparatively high number in the 1800
MHz band (7 blocks in total) was a result of the "supplementary round" where
Telekom Austria Group acquired 2 x 20 MHz of additional spectrum as 4 blocks of
spectrum remained unsold in the "clock round". This 40% increase in spectrum
only lead to a 3% increase in total costs.

Spectrum distribution

Subsequent to the auction the new spectrum distribution for the auctioned
frequency bands in Austria will be the following:


                                 800 MHz         900 MHz         1800 MHz
A1 Telekom Austria   before      n.a.            2 x 20.2 MHz    2 x 15 MHz
                                                 (until 2015/17) (until 2015)
                     after       2 x 20 MHz      2 x 15 MHz      2 x 35 MHz
                                 (until 2029)    (until 2034)    (until 2034)

Hutchison 3G Austria before      n.a.            2 x 0.8 MHz     2 x 29 MHz
                                                 (until 2017)    (until 2017)
                     after       0 MHz            2 x 5 MHz      2 x 20 MHz
                                 (until 2029)    (until 2034)    (until 2034)
        
T-Mobile Austria     before      n.a.            2 x 12.8 MHz    2 x 25.4 MHz
                                                 (until 2015)    (until 2015/19)
                     after       2 x 10 MHz      2 x 15 MHz      2 x 20 MHz
                                 (until 2029)    (until 2034)    (until 2034)


The maturity date for the 800 MHz spectrum band, which is available immediately,
is 31 December 2029. The start of the licensing period for all auctioned blocks
in the 900 MHz and the 1800 MHz band depends on the existing frequency licences,
while the new licences will now have a common maturity date of 31 December 2034
for all operators.

Strong strategic position

This new spectrum offers Telekom Austria unique strategic advantages. Having
acquired 67% of the immediately available low frequency 800 MHz spectrum,
Telekom Austria Group is in an unparalleled position to roll out a leading LTE
network across Austria. This fully supports Telekom Austria Group's high value
strategy and network quality leadership and allows Telekom Austria Group to
protect its fixed-line as well as its mobile customer base, in particular in
rural areas. Moreover, the spectrum distribution has significantly reduced the
viability of a potential new mass market mobile virtual network operator (MVNO).

Financial implications and funding

The purchase price of the spectrum will be payable in full within approximately
8 weeks. The Telekom Austria Group will finance the spectrum acquisition via
existing cash as well as additional debt. In light of the resulting impact on
its balance sheet the Telekom Austria Group intends to achieve deleveraging via
operational cash flow generation to support the Group's BBB (stable) target
rating.

Broadband investments

On 22 March 2013, the Federal Ministry for Transport, Innovation and Technology
announced that EUR 250 million of the proceeds from the Austrian spectrum
auctions will be dedicated to broadband investments & research and development
grants.


___

Disclaimer for forward-looking statements: 
This document contains forward-looking statements. These forward-looking
statements are usually accompanied by words such as "believe", "intend",
"anticipate", "plan", "expect" and similar expressions. Actual events may differ
materially from those anticipated in these forward-looking statements as a
result of a number of factors. Forward-looking statements involve inherent risks
and uncertainties. A number of important factors could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statement. Neither Telekom Austria nor any other person accepts any liability
for any such forward-looking statements. Telekom Austria will not update these
forward-looking statements, whether due to changed factual circumstances,
changes in assumptions or expectations. This report does not constitute a
recommendation or invitation to purchase or sell securities of Telekom Austria.
___


Further inquiry note:
Matthias Stieber
Director Investor Relations
Tel.: +43 (0) 50 664 39126
mailto:matthias.stieber@telekomaustria.com

end of announcement                               euro adhoc 
--------------------------------------------------------------------------------


issuer:      Telekom Austria AG
             Lassallestrasse 9
             A-1020 Wien
mail:         investor.relations@telekomaustria.com
WWW:      www.telekomaustria.com/ir
sector:      Telecommunications
ISIN:        AT0000720008
indexes:     WBI, ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English