BIDS DUE TODAY IN TENDER FOR AUSTRIAN GSM PERMIT

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Today is the deadline to submit bids for a Digital Cellular System 1800 MHz license in Austria.

A winner could be announced next month.

The tender was announced about two months ago, at which time Waltraud Augesky, a commercial specialist with the U.S. Embassy in Vienna, said, “U.S. firms interested in bidding must act immediately. The best opportunities exist for consortia consisting of Austrian and foreign partners.”

The only group thus far to confirm bidding plans is Connect Austria, a venture of Viag AG of Germany and Telenor of Norway, each with a 20 percent stake in the bidder.

Orange plc, which operates a DCS system in the United Kingdom, is evaluating the possibility of bidding in Austria.

Other companies rumored to be interested include RWE Telliance of Germany, Mannesmann AG of Germany, U.K.-based Vodafone Group plc, Bell Atlantic Corp., Alcatel of France and AirTouch Communications Inc.

AirTouch and Mannesmann are partners in a GSM system operating in Germany.

The government will follow a two-step process to select a winner.

The ministry initially will measure candidates’ technical and financial strengths. Those that meet those requirements will be able to bid at auction for the license.

Austria’s Ministry for Science and Transport may allow Austria’s two Global System for Mobile communications operators, Max.mobil and Mobilkom Austria, to gain access to DCS 1800 MHz frequencies, said one source. This would allow the carriers to offer customers dual-band services.

Mobilkom Austria, owned by the Post, Telephone and Telegraphenverwaltung agency, operates GSM and Total Access Communications Services networks, with about 165,000 TACS and 365,000 GSM subscribers.

Tele Danmark A/S bid for a 25 percent stake in Mobilkom Austria in April.

Max.mobil is operated by Oe-Call, a joint venture of Deutsche Telekom AG (25 percent), Siemens AG Oesterreich of Vienna (20 percent) and an Austrian and German bank conglomerate, BAWAG. In April, the venture reported about 23,000 users.

The Strategis Group, Washington, D.C., reported Austria had 585,000 total mobile phone subscribers at the end of 1996.

Penetration is about 7 percent and wireline phones have a reach of one phone for every 1.6 people.

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