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Magda Ismail, Harvard University Mridul Chowdhury, Harvard University Rudolf Lichtmannegger, Austrian Economic Chamber

Austria’s overall ranking of ninth in the credited with slowing overall demand. “ The Internet has offered a Index of Readiness for the Networked Six third-generation (3G) UMTS cellular great source of efficiency World is a good indicator of the country’s telephony licenses were awarded in 2000, and there was noticeable disappointment and has promoted new transition from dependence on tourism within the Austrian government that total kinds of services in and more traditional industries to greater reliance on ICTs and the high-tech sector. revenue from the auction was significantly Austria’s travel industry.” The Austrian ICT industry is becoming an less than that raised in nations such as —Austrian business analyst increasingly important component of the Britain and Germany, where 3G licenses 1 country’s economy. were sold at exorbitant prices. “ The total bandwidth of the Several initiatives, such as @21 and the international backbones is One of the main drivers of Austria’s accel- Osterreich Digital Initiative, are public- too small.” erated Networked Readiness has been the growth of its mobile telephony market, private partnerships that are leading the —Manager of Austrian ISP 2 which boasts one of the highest rates of nation in Networked Readiness. The mobile penetration in the world, a result Austrian government has also developed of an effective regulatory environment and several e-government initiatives (Ranking fierce competition (Ranking in Effect of in e-Government micro-index: 14), imple- Telecommunications Competition: 7). mentation of which is challenged by the However, liberalization efforts have not highly decentralized government structure been as successful in the fixed telephony and inadequate coordination among market, where the former monopoly national agencies. One of the main plat- provider, Telekom Austria, continues to forms for online government services, at dominate the numerous smaller providers , gives information on that have emerged since market liberaliza- basic services and provides access to some tion took place in 1998. legal systems and databases (Ranking in Online Government Services: 17). With E-commerce is developing gradually in enforcement of an electronic signature Austria, with large enterprises taking the law already in place, the government plans lead (Ranking in e-Commerce micro-index: to create an electronic identity card for 166 20). However, B2B e-commerce on a government-citizen interaction. national level is still at a relatively nascent stage. Although a vast majority of Compared to its neighbors, Austria has a enterprises have access to the Internet, fairly large rural population (35 percent of most are unwilling to use it for sophisti- the country’s total populace), a situation Country Profiles cated business purposes. The promising that has made universal access and use of sectors in Austrian B2C e-commerce have rural telecommunications services a high been online travel services, media, and government priority. The Internet portal of trading. Prospects for more rapid growth the Agricultural Department3 and of e-commerce are stifled by relatively Netvillage4 are two major initiatives to high telephone costs and subscription fees promote the use of ICTs in rural areas and concerns over online security. (Ranking in Public Access to the Internet: 19). Austrian schools are generally well- With high mobile penetration and equipped with PCs and LANs and most booming use of Short Messaging Service have access to the Internet. (SMS), coupled with relatively low PC and PC-based Internet penetration, many observers feel that opportunities for mobile e-commerce are ripe in Austria. WAP-enabled phones are becoming increasingly available, although inade- quate content and security concerns are Key Facts nentuesprhs 4.35 25.58 78.55 % 21.29 27.65 588.49 US$26,314 47.36 A Cell phonesubscribersper100inhabitants Internet usersper100inhabitants 18 Internet usersperhost % 35.38 Percent ofPCsconnectedtoInternet Piracy rate Personal computersper100inhabitants Internet hostsper10,000inhabitants 14 T Main telephonelinesper100inhabitants UNDP HumanDevelopmentIndexRanking,2001(adjustedtoGITRsample) Global CompetitivenessIndexRanking,2001–2002 GDP percapita(PPP) Rural population(%oftotalpopulation)1999 Population lpoefut e 0 antlpoelns6.27 elephone faultsper100maintelephonelines eaemnhycs o 0huso nentacs US$16.30 verage monthlycostfor20hoursofInternetaccess Networked ReadinessIndex Enabling Factorscomponentindex Network Usecomponentindex Social Capital ICT Opportunities Networked Learning Networked Society Hardware, Software,andSupport Information Infrastructure Network Access ICT Policy Business andEconomicEnvironment Network Policy General Infrastructure e-Government e-Commerce Networked Economy 8,211,000 70 % 37.00 RANK 13 11 16 13 17 15 14 20 12 17 20 13 9 9 6 8 8

Austria

Country Profiles 167