Austria Profile | Point Topic Subscribers

Point Topic Austria Overview

Austria

28 Nov 2016 Broadband Competitive Landscape Incumbent A1 Telekom Austria remains the dominant player in the fixed broadband market, with a 61 per cent share of subscriptions in Q2 2016. Its main competitor is Liberty Global's subsidiary UPC, with a 20 per cent share. Tele2 follows as a distant third with 4 per cent, while the remaining share of 15 per cent is shared by smaller players.

In the xDSL market, the incumbent's retail arm has steadily strengthened its market leadership since 2008, increasing its share of DSL/VDSL subscriptions to 90 per cent by the end of Q2 2016. This domination can be attributed to the price reductions introduced by A1 in late 2007, which were, in turn, a response to competition from aggressively priced mobile broadband offers. Despite the introduction of lower wholesale charges for bitstream and LLU access, on the whole it became significantly more difficult for alternative operators to fight back against the incumbent, UPC and very competitive mobile broadband providers such as Drei Austria.

In the cable market, the largest cable provider UPC continues the consolidation of smaller operators. UPC's network is fully DOCSIS 3-enabled, offering up to 250 Mbps broadband in the capital city of Vienna, the regional capitals of Graz, Klagenfurt, Innsbruck, and two smaller cities in the Vorarlberg region. In some areas, regional electricity providers are also actively participating in the broadband market as beneficiaries of the subsidy schemes set out in Austria's national broadband plan.

As FTTP deployment throughout the country has been slow compared with the rest of Europe, with just under five per cent of population covered at the end of 2015, A1 Telekom announced that it will allocate EUR 400 million to the expansion of the national fibre network between 2015 and 2018. In 2014 A1 Telekom already started upgrading access networks to offer customers faster broadband services. The incumbent installed FTTC, FTTB and FTTH platforms along with VDSL Vectoring, which has increased the available bandwidth.

[85339] [95271] [98018] [100646] Mobile Market Overview There are three mobile network operators in the country: A1 Telekom Austria (formerly Mobilkom), T-Mobile Austria and Hutchison Drei Austria, under the 3 brand. The latter merged with Orange Austria in 2013, more than doubling its market share. At the end of Q4 2015, A1 Telekom had a 40.5 per cent market share. T- Mobile followed with 28 per cent, Hutchison Drei claimed 27.9 per cent of the market. The remaining 3.6 per cent (490,000 subscribers) were attributed to mobile virtual network operators (MVNOs) and airtime resellers.

The country ended December 2015 with 1.01 million LTE-enabled SIM cards, up from 440,000 three months earlier and 162,000 as of 31 December 2014.

A1 started rolling out LTE at the end of 2010 using 2.6 GHz spectrum, in close competition with T-Mobile, while Drei Austria introduced its first LTE commercial offers a year later. Since 2013 Austria's mobile market has undergone rapid changes, especially since the completion of the multiband auction for 800/900/1800 MHz

18/01/18 © Point Topic 2018 1 / 8 Point Topic Austria Overview

spectrum, which saw A1 securing half of the 28 available frequency blocks. T-Mobile and Drei Austria acquired nine and five blocks respectively. A1 started using 800 MHz spectrum to extend its LTE footprint and by mid-2016 had reached 75 per cent population coverage. At the end of 2014, A1 started the deployment of LTE-A using carrier aggregation technology.

In 2015, T-Mobile's 4G LTE footprint covered three quarters of the country and it has continued the extension of their network with a further EUR 300 million investment with the aim of providing 97 per cent coverage by the end of 2016. During the same period, Drei carried out extensive upgrades to their LTE network and by August 2015 had 98 per cent coverage.

In a significant development, A1 announced in mid-2016 that it is investing EUR 500 million in the expansion of broadband coverage in urban and rural areas by upgrading both its fixed line and 4G LTE networks. The firm is using so-called ‘hybrid boost technology’ to combine both fixed and mobile technologies to create a new single product which offers maximum down/upload speeds of 100Mbps/20Mbps and is able to reach 92 per

cent of Austrians. [85339] [85340] [91465] [95271] [98020] [100650] [100651] [100656] Pricing & Tariffs

123 ADSL ADSL2+ 100 Cable Modem, ) Unknown D

S DOCSIS3.0 U ( FTTH, VDSL n o i

t FTTx p i

r FTTx, VDSL c

s VDSL b u S

y l h t n o M

10 50 100

Downstream Mb/s Subscriber statistics

18/01/18 © Point Topic 2018 2 / 8 Point Topic Austria Overview

2,000,000 Cable Modem DSL 1,500,000 FTTH FWA Satellite 1,000,000

500,000

0 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3

Technology 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 Cable Modem 802,430 810,381 819,458 825,470 831,193 838,538 DSL 1,610,539 1,603,074 1,620,395 1,614,570 1,608,725 1,602,657 FTTH 33,700 38,000 41,000 42,600 44,100 45,700 FWA 29,100 28,900 28,700 28,700 28,700 28,700 Satellite 591 600 612 622 627 637

2016 August – A1 plans to roll out a new FTTB network to around 30,000 households and apartments in Graz within the next twelve months. The new infrastructure will offer download speeds of over 100Mbps. A further 20,000 homes in less densely built-up areas, including Wetzelsdorf, Webling, Andritz and Mariatrost, will gain access

to FTTC infrastructure at a later stage. [100653]

July – In August 2015 the Regulatory Authority for Telecoms and Broadcasting approved the refarming of the 2100 MHz frequency band, which until now was used for 3G UMTS, for immediate 4G LTE use. The Federal Ministry for Transport, Innovation and Technology also announced in the same month, that from 2020 it will free up spectrum in the 700 MHz band for mobile use with the aim of increasing mobile penetration in the country.

February – ZTE signed Pre5G Memorandum of Understanding (MoU) with Hutchison Drei Austria (Drei) to build the first ‘Pre5G’ trial site in Europe. ZTE’s Pre5G Massive MIMO base station will be commercially

available on a large scale in 2016. [100648]

2015 December – A1 Telekom will deploy Alcatel-Lucent’s G.fast and Vplus broadband access technologies,

enabling the acceleration of FTTB and FTTC deployments. [98018]

18/01/18 © Point Topic 2018 3 / 8 Point Topic Austria Overview

December – UPC will be expanding its cable network in Upper Austria with the completion of its acquisition of Cable TV Stadl-Paura which has operated in the region for 22 years. Their cable network will be integrated

gradually into the HFC network of UPC in spring 2016. [98018]

December – Liberty Global, the parent company of UPC Austria and UPC Cablecom in Switzerland will be rebranding the two companies under one common brand name of UPC. Since August 2014, the two

companies were relocated to one central operating location in Zurich, Switzerland. [98018]

October – A1 Telekom announced that in 2015 its broadband customer base saw a year-on-year growth of

4.9 per cent. The growth was driven by the increasing demand for 16 Mbps and 30 Mbps products. [98018]

August – The regulator has decided to reallocate existing frequency usage rights in the 2.1 GHz range. From now on these frequency bands may also be used for LTE (4G). All mobile network operators will benefit from

the liberalisation of the 2.1 GHz frequency range. [98020]

July – Drei has completed upgrades to its network in 442 municipalities of the upper Austrian region which

has supplied the area with LTE coverage and speeds of up to 150 Mbps. [98020]

March – Tele2 will be adding mobile services to its bundles of broadband, fixed-line telephony and TV. It

operates as a mobile virtual network operator (MVNO) through an agreement with T-Mobile. [98020]

March – As a result of A1 Telekom losing more than 290,000 customers in 2014, which the operator believes was partly due to the large number of mobile virtual network operators (MVNOs), it launched a new tariff on its budget mobile brand Bob, which offers 2,000 minutes, 2,000 SMS as well as 3 GB of mobile data at up to 7

Mbps for EUR 14.90 per month. [98020]

2014 December – Hutchison Drei Austria has further extended its 4G LTE network to Klagenfurt and Villach in the state of Carinthia. The deployment means that Drei has extended 4G coverage to 60 per cent of the

population, beating its previous year-end prediction of 50 per cent population coverage. [95271]

December – Cable provider UPC has entered the mobile market as a MVNO utilising the Drei network. [98020]

November – Tele2 plans to re-enter the Austrian mobile market in H2 2015. The operator launched its new pay-TV product in Austria last week, and the re-introduction of mobile will enable it to offer a full portfolio of

services. [95271]

November – A1 Telekom Austria has launched its LTE-A network in Graz using carrier aggregation (CA) technology. The new network uses frequency in the 800MHz and 2600MHz bands, supporting theoretical

downlink speeds of up to 300Mbps. [95271]

18/01/18 © Point Topic 2018 4 / 8 Point Topic Austria Overview

November – Hutchison Drei Austria (formerly H3G) has extended its 4G LTE network to the state of Vorarlberg, including state capital Bregenz, and the municipalities of Dornbirn, Feldkirch, Horbranz, Gofis, Wolfurt and Rankweil. Drei claims it is on track to cover 50 per cent of the country with LTE by end-2014. The operator plans to offer 4G to 98 per cent of the Austrian population by the end of 2015.

October – A1 Telekom Austria has successfully demonstrated downlink data rates of more than 100Mbps via existing copper lines using the vendor’s G.fast solution. Currently, G.fast is still in the testing phase, but A1 anticipates the launch of commercial operations in 2016. The technology could potentially be rolled out to 400,000 households in Vienna alone; the telco has assessed that while new buildings are future-proofed with fibre-optic technology, in the case of old buildings rewiring only makes sense within the framework of a more comprehensive renovation, making G.fast a useful solution. Hannes Ametsreiter, CEO of Telekom Austria Group, commented: ‘Fibre-to-the-home (FTTH) remains our long term vision, but we consider G.fast as an intelligent interim solution until fibre [has] a similar [level of] coverage as we have with copper now.’

October – Hutchison Drei Austria (formerly H3G) has expanded its 4G LTE network to Linz, Perg, Wels and Steyr, in the state of Upper Austria. A few weeks earlier it had concluded the rollout of 6,000 LTE base stations in the Greater Vienna area, offering 98 per cent coverage in the capital and surrounding areas.

October – A1's share of mobile subscribers has remained above the 40 per cent mark in recent years, standing at 41 per cent at the end of 2014. T-Mobile has approximately 30 per cent share, closely followed by

Drei Austria. The market share of independent MVNOs is estimated to be still marginal. [98020]

February – A1 Telekom Austria has claimed to be the first operator in the EU to have migrated its entire fixed line voice service to a VoIP platform.

January – A1 Telekom Austria has used its newly acquired 800MHz spectrum to extend its LTE coverage to 200 locations, including a number of rural regions never previously covered by its 3G network. Around 45 per cent of the population are now covered by its 4G network.

2013 July – After closing the approval of all relevant authorities as of 2nd July 2013 Hutchison 3G will operate under

Three Hutchison Austria GmbH name. [85338] [85339] [89223]

July – A1 Telekom Austria has conducted the first trial of ‘G.fast’ transmission achieving data speeds of up to 1.1 Gbps over 70 meters and 800 Mbps over 100 meters. G.fast uses Bell Labs Vectoring techniques, similar to those already used in VDSL2 deployments. The new option of rolling out FTTB based on the G.fast technology could be used to complement A1’s widely applied FTTC and FTTEx (Fibre to the Exchange)

configurations. [89227]

July – A1 Telekom Austria has upgraded its 1,000th base station to support 4G LTE technology. A1’s LTE network now covers all state capitals and nine metropolitan areas, equivalent to more than one third of the

Austrian population. In addition to all provincial capitals it is currently available in the following metropolitan areas: Dornbirn, Feldkirch, Hallein, Krems, Lustenau, Mödling, Steyr, Wels Wiener NeustadtThe. The

operator reportedly intends to expand the service to more than 25 metropolitan areas by end-2013. [89226]

March – Tele2 Austria plans to bid for a 4G mobile licence later this year. The Regulatory Authority for Telecoms & Broadcasting (RTR) hopes to strengthen competition in the market by reserving frequencies for a

potential new operator. Tele2 aims to become a quad-play operator in the country. [91463]

2012 December – T-Mobile Austria has tested the LTE Advanced technology in co-operation with network partner Huawei. A test network used 1800MHz and 2.6GHz frequencies to achieve a live data transmission speed of

289Mbps, using carrier aggregation. [89228]

August – A1 Telekom Austria started the upgrade of its base stations with flexible 2G/3G/4G RAN solutions to operate multiple mobile communication standards on a single network.

June – VoIP services are still not widely used in Austria. The largest operator in this segment is UPC Austria. By mid-2012, 369,000 users had signed up to UPC’s VoIP service with the number increasing steadily since service launch. A1 Telekom Austria started trialling and upgrading its network with VoIP technologies in March

2009, hoping to devise new revenue-generating services via these trials. [85339]

June – A1 Telekom Austria's LTE coverage is now available to about one-third of the population, earlier than originally planned. The operator has a total of 800 stations in operation throughout Austria and is currently focusing on the expansion of the urban areas. In the main cities, its LTE network covers between 70 per cent and 93 per cent of population. In Vienna, A1 operates more than 400 base stations to provide LTE service for

88 per cent of the residents. [91461]

April – IPTV services are gradually increasing their presence in the Austrian TV market. A1’s aggressive marketing strategy and pricing of the A1 TV product is beginning to show results. By Q2 2012, A1 managed to attract about 165,000 subscribers to its IPTV service.

February – France Telecom has entered into a binding agreement for the sale of Orange Austria to Hutchison 3G Austria. France Telecom holds a 35 per cent stake in Orange Austria, with private equity firm MEP owning the remaining 65 per cent. The deal includes H3G acquiring around 3,000 of Orange’s 5,000 base stations and surplus frequencies in the 2.1GHz spectrum band. The agreement will also see Orange’s wholly-owned MVNO unit Yesss! move to A1 Telekom Austria. The completion of both transactions remains subject to the

approval of the regulatory and anti-trust authorities. [85338] [85339] [89223]

January – Three Austria and T-Mobile unveiled plans for a network sharing agreement which will see them share their UMTS infrastructure starting from July 2012. T-Mobile customers who cannot receive UMTS signals will automatically be connected to Three Austria's network, and vice versa.

2011 November – Hutchison 3G Austria (H3G) has confirmed that it will launch its LTE network in Vienna on 18 November.

April – Austrian mobile operators follow the trend of other countries in terms of infrastructure collaboration. T- Mobile and Orange entered into a partnership agreement in April 2011. Both companies agreed to share their existing 3G infrastructure in rural areas. The aim of the deal is to boost 3G network coverage for customers of both companies and increase capacity in order to provide subscribers with new mobile broadband services in the future.

February – Three Austria has initiated the nationwide LTE/DC-HSPA+ network upgrade in February 2011. The aim is to cover 94 per cent of Austria’s population with HSPA+ services and provide LTE in major cities by the end of the year. The new infrastructure will completely replace Three Austria’s existing UMTS network.

[85339]

2010 January – Orange has upgraded its mobile network in Austria to keep pace with A1 and expand its market share. In March 2010, Orange rolled out 42 Mbps services on the Wiener Neustadt network, becoming the first operator in Austria to offer download speeds of 42 Mbps over an HSPA network. The nationwide rollout of higher speeds across its entire network took place during 2010.

2009 June – In March 2009, A1 Telekom Austria launched its HSPA+ upgrade. The 3.5G platform boosted A1’s network capacity and enabled data transmission at speeds of up to 21 Mbps, rising to 28.8 Mbps in late 2009. The initial rollout covered Vienna’s tenth district, with expansion to other areas following by late 2009. A1's aim was to cover 90 per cent of the population with its UMTS/HSDPA/HSUPA network by 2010. This aggressive rollout plan is essential for A1 in order to claim the top position in the mobile data and mobile broadband segments. Especially so, after 3 Austria has waged a price war that has seen its market share soar and service prices tumble.

June – In January 2006, UPC conducted trials to launch high speed cable services with up to 100 Mbps speeds. The so-called Wideband-Feldversuche were carried out in several districts of Vienna aiming to assess the potential and limitations of UPC’s HFC system. The up to 100 Mbps services were commercially launched in the capital in June 2009. The company’s network uses DOCSIS 3.0 technology and is in the first phase of upgrade costing EUR 100 million.

2008 December – UPC Austria has a solid infrastructure, and by end-2008 its network reached about 90 per cent

of all Austrian households in major cities such as Vienna, Graz, Klagenfurt and Innsbruck. With the acquisition of Inode, it now also offers DSL-based broadband services beyond its cable footprint.

June – Technological developments have graduated into 3.5G and possibly 4G, which can provide enough capacity for advanced mobile broadband services. 3 Austria, for instance, reached population coverage of 94 per cent with its HSDPA service by mid-2008. T-Mobile had already completed the HSDPA deployment across its entire UTMS network by December 2007 (75 per cent coverage) and A1 achieved the same.

2006 June – Partially in response to UPC Austria’s investments, A1 Telekom Austria started its own round of new service launches. In June 2005, A1 announced plans to launch an IPTV service in Vienna by late 2005. With some delay, the IPTV and VoD services were launched in March 2006. They were largely based on ADSL2+

technology, although A1 had embarked on a project to provide an FTTH solution in 2005. [85339]

2003 June – A1 Telekom Austria was the first operator to launch 3G services in April 2003. The other operators followed shortly after with the launch of their own services. 3 Austria is the only operator that does not have its own GSM network. Consequently, 3 Austria has entered into an agreement with A1 for the provision of 2G and roaming services.