Hofburg, Vienna
Domestic Firms
Privatization and deregulation
Small companies have suffered from the high telecommunications tariffs. With deregulation becoming effective in 1998, the services will become cheaper and Austria's companies will be better able to become part of the Global Information Highway. High speed services will also be readily available on a regional basis for small companies. The utilities and cable companies plan to erect a network to reach regional customers. Larger corporations will benefit from the railroad companies services. The OeBB will target those businesses because it creates a fiber optic network that links the major Austrian cities.
World Wide Web
The Internet offers better access to external databases. Companies have easy and fast access to information about international tender procedures and subsidies granted by the European Union or other organizations. Thus, companies can derive a competitive advantage by providing the infrastructure within their organization. SMEs are able to reduce marketing and PR costs as well as communications costs by using Web technology.
Membership in the European Union
Apart from benefiting from the information provided by European databases, the Austrian firms will also enjoy a more sophisticated telecommunications link within Europe. Many R&D projects are jointly conducted by the various organizations of the member states. This is particularly important in Austria where SMEs do not have the spare cash to fund expensive research projects. The main backbone of these group projects is a sophisticated telecommunications infrastructure. Certain regions, such as Burgenland, look increasingly attractive. The European Union has declared the state underdeveloped and grants generous subsidies for investments. The local government and the utilities company have committed to improve the telecommunications infrastructure. In this part of Austria, wages are relatively low. Its nearness to Vienna, Hungary, and the Slovak Republic also makes it an attractive place to invest.
Foreign Firms (FDIs)
Telecommunications infrastructure
The essential technologies for a variety of applications in the advanced telecommunications sector is already available. With the EU directive passed to further liberalize the telecommunications market, lower prices for all voice, video, satellite and cellular phone services are expected. International companies appreciate the highly educated and disciplined Austrian workforce. The government has also a vast interest to attract FDI and usually offers tax incentives.
Gateway to Central and Eastern Europe
The fall of the Iron Curtain has attracted many companies to Austria. Many international players wanted to be as close as possible to the emerging markets while enjoying the advantages of a highly developed country. Although Austria is still in demand for companies setting up their Eastern European HQ, the advantage is vanishing. As the emerging countries began to develop, most companies decide to invest into a local subsidiary.
Membership in the European Union
Austria's membership in the EU has sped up the process of deregulation of the telecommunications market. It has also opened the opportunity to share the information from EU databases. Commissioner Bangemann is supporting the National Host project which will better link the infrastructures of all EU member states. The west part of Austria has positively been affected by some companies that moved their location from Switzerland to Austria in order to benefit from the duty-free trade within the single market.
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