Telekom Austria unlikely to need cap hike soon - sources

VIENNA/FRANKFURT Fri Oct 18, 2013 7:37am EDT

VIENNA/FRANKFURT Oct 18 (Reuters) - Telekom Austria is unlikely to use a quick capital increase to finance its purchase of next-generation mobile frequency spectrum in its home market, sources close to the situation told Reuters.

"Telekom has no short-term financing problems. There is enough liquidity available," said one source who spoke on condition of anonymity.

"A capital increase is not a topic for the short term," another source added.

The company declined comment on Friday.

Bids for Austria's auction for new telecoms frequencies had approached 2 billion euros ($2.73 billion) by the time the auction - now nearing its conclusion - had entered its fourth week.

The final cost of purchasing the frequencies remains a secret. Results of the auction are expected next week, people familiar with the process said.

Former state monopoly Telekom Austria, Deutsche Telekom's T-Mobile and Hutchison Whampoa's H3G were asked to compete for spectrum they need to build LTE networks, capable of 10 times speeds now available.

The operators, under threat of being expelled from the auction if there is any hint of collusion, have been forbidden even to confirm that they are taking part.

Some analysts have expected a high auction price to trigger a capital hike at Telekom Austria, which the market had expected to spend around 300-400 million euros on the auction.

Uncertainty over the final cost was a main reason Telekom Austria did not bid for Serbian cable operator SBB, a source close to the matter had said last week.

Telekom Austria already issued a 600 million euro hybrid bond early this year, bumping up against the ceiling that ratings agencies accept for such instruments, so this avenue for financing the purchase was unlikely, financial sources said. ($1 = 0.7319 euros) (Reporting by Angelika Gruber in Vienna, Arno Schuetze in Frankfurt and Josie Cox in London; Writing by Michael Shields)