Telekom Austria to boost budget brand's prices by up to 70 pct

VIENNA Tue Jan 7, 2014 7:45am EST

VIENNA Jan 7 (Reuters) - Telekom Austria will increase prices for its no-frills mobile brand Bob by up to 70 percent from March, it said on Tuesday, citing inflation and the need to invest in its network.

Austria's biggest telecoms provider paid 1 billion euros ($1.4 billion) last month for new frequencies in an unexpectedly expensive auction that led to a credit rating downgrade, raising its borrowing costs.

The company, which in November declared its intention to stabilise core profit in its home market this year, said that the price rises will be on certain Bob tariffs that are no longer offered to new customers.

Existing smartphone packages taken out by customers at 9.90 euros a month will rise to 11.90 euros, while a basic deal that offered calls for 4 cents a minute and SMS messages for 4 cents will rise to 6.8 cents per minute or text.

Austria, where Telekom Austria, T-Mobile Austria and Hutchison Whampoa's 3 compete for business from a population of 8.5 million, has some of the cheapest mobile prices in Europe despite a consolidation that eliminated one carrier a year ago.

Telekom Austria does not disclose subscriber numbers for Bob but said in its 2012 annual report that the brand's had helped to lift the group's Austrian mobile customer base by about 2.1 percent to 5.4 million. ($1 = 0.7330 euros) (Reporting by Georgina Prodhan; Editing by David Goodman)

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