Image: Ögig
The telecommunications industry reiterates its criticism of the funding call for broadband expansion announced by State Secretary Florian Tursky (ÖVP) for November and refers to an evaluation report on the Ministry of Finance’s BBA 2020 broadband initiative. According to the report, the subsidies have led to an increase in construction cost inflation in the sector, and further calls for subsidies before the end of 2024 are therefore not recommended.
The industry had repeatedly warned against further subsidies because an overheating of the market would drive up construction costs. State Secretary Tursky, who is responsible for digitalization, rejected this criticism; he sees it “more as an attempt by providers to further expand their current market power,” as he recently explained. Traditionally, the providers have also benefited from the funding tenders, but above all municipalities, which then became owners of the infrastructure, as well as local cable network operators.
Now A1 Telekom, Magenta Telekom and Hutchison Drei refer to a study by Wifo and WIK Consult commissioned by the Ministry of Finance itself, which was completed at the end of September. In it, the study authors expressly advise against further additions to call budgets. The next funding call should not be started before the end of 2024, it says. This should help curb sector inflation in the telecommunications sector.
The telecom companies point out that only ten percent of the projects from the current broadband funding call are in implementation. “The additional 400 million euros announced by StS Tursky for broadband expansion will flow into a hardware store that has no remaining capacity for the next few years,” the three companies said in a joint statement on Monday. “Another call would be correspondingly inefficient because the expansion costs rise in line with over-promotion and have an inflationary effect.” The industry advocates using the 400 million euros to support demand.
more from economics
