Optus to boost 3G data services with new spectrum

Agrees to buy out Qualcomm subsidiary's licenses.

Optus has moved to acquire all remaining 2100 MHz band spectrum left on the secondary market to bolster its 3G data services.

The mobile telco said it had agreed the licenses for 10 MHz of paired spectrum in the 2100 MHz band from 3G Investments, which is a subsidiary of Qualcomm.

No financials were disclosed, but the spectrum was previously purchased by 3G Investments from the Federal Government for $159 million at auction in 2001.

An Optus spokesman told iTnews the telco "couldn't disclose the actual figure" it paid.

"I can confirm that the price we will pay Qualcomm is broadly in line with what we paid for the 10 MHz of 2100 MHz paired spectrum we purchased in 2001 ($206 million) on a straight line depreciation basis," the spokesman said.

If approved, the purchase would double Optus' 2100 MHz paired spectrum holdings in Australia's eight capital cities.

"Optus will use this newly acquired 3G spectrum to support retail and wholesale customer demand for Optus' increasing range of data services," said Optus products and delivery managing director Andrew Buay.

"The purchase of 10MHz of 2100MHz spectrum is illustrative of how Optus is building further capacity in its mobile network to meet the explosive growth in demand for data services.

"Optus has traditionally been an efficient user of spectrum and we plan to maximise this additional spectrum to support the future growth of 3G mobile services among our retail and wholesale customer base."

The deal was subject to approval by the Foreign Investment Review Board (FIRB) and clearance from the Australian Competition and Consumer Commission (ACCC). Buay was confident it would pass.

Optus last reported its mobile broadband customer numbers at 688,000 at the end of September 2009. That figure was up 240 percent compared to the previous year.

Buay said Optus' proposed spectrum acquisition exhausted "all available 2100MHz spectrum on the secondary trading market that supports the expansion of mobile broadband services.

"It is now more important than ever that the Government finalise three major spectrum policy decisions which will shape the future of the mobile industry in Australia - that is, the allocation of the digital dividend for mobile broadband services; the allocation of 2.5GHz spectrum for mobile broadband services; and greater certainty regarding the cost and timing of the renewal of expiring 3G spectrum licences," he said.