Telekom Austria To Pursue Legal Action Over Mast Tax

VIENNA -(Dow Jones)- Telekom Austria AG (TKA) said Thursday it will continue pursuing legal action to stop a tax being levied on wireless masts in Lower Austria after a European Union court ruled that such taxes are legal.

The province of Lower Austria plans to tax mobile phone masts from Jan. 1, 2006, a decision that has riled wireless operators and consumer groups alike.

Earlier Thursday, the European Court of Justice ruled that taxes on mobile phone masts are legal in a case being watched closely by some wireless operators as a precedent.

The ruling was made in a case involving Belgian communes Fleron and Schaerbeek and mobile phone companies Belgacom SA (BELG.BT) and Mobistar SA (MOBB.BT). The court ruled the taxes comply with a 1997 telecoms directive, provided they don't favor one operator over another. A Belgian court must rule whether the taxes are unfair to some mobile operators.

"For us the decision by the E.U. court isn't really a decision, but rather the E.U. court ruling the Belgian courts have to decide," Telekom Austria spokesman Martin Bredl told Dow Jones Newswires.

Even if the tax is applied, it won't hit Telekom Austria's profits as the company plans to pass on the extra cost to its customers, Bredl said.

Company Web site: http://www.telekom.at

-By Eva Komarek, Dow Jones Newswires; (+43 1) 513 69 22 11; eva.komarek@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 8th September 2005