Telstra must take part in 4G spectrum auction

 

Poised to call Government bluff.

Telstra's inclusion in future 4G mobile spectrum auctions is essential for competition in the mobile market, analysts told the 4G Summit yesterday, despite Communications Minister Senator Conroy's threat to restrict Telstra's participation unless the national telco structurally separates.

Speaking at the summit, Corrs Chambers Westgarth partner James North said that Telstra's restriction from the spectrum bidding process would be detrimental to a well-functioning market.

The Government is  expected to allocate LTE [Long Term Evolution] spectrum in the 2.5 GHz and/or 700 MHz bands; the latter currently used for analogue TV which is due to be switched off in 2013.

Under the Radio Communications Act, the Communications Minister has the power to exclude parties from the allocation of spectrum licences.

"The Radio Communications Act is about economic efficiency," North explained. "It makes clear that acquisition of spectrum is applied under section 50 of the Trade Practices Act."

But North argued that "one of the risks in excluding Telstra in that process is that right now we have a very vigorously competitive mobile market.

"If you take Telstra out of the picture, you'd be left with two major players [Optus and VHA] instead of three," he said.

North noted that there was precedent for Telstra being excluded from a spectrum auction when the company was restricted from bidding for 3.4GHz spectrum in 2000.

He said Telstra's exclusion restriction was "more appropriate" in 2000 as Telstra was by far the largest player in the fixed line market, and its constraint from bidding increased market competition.

In any case, spectrum winners Austar and Unwired left much of their obtained spectrum bands unused, and Telstra ended up acquiring spectrum in the 3.4Ghz band anyway - to provide voice and data to rural areas, he said.

Ovum analyst Nathan Burley agreed that the consequences of excluding Telstra from the LTE spectrum auction are too great for the government to take.

"It's very unlikely that Telstra will be excluded from buying dividend," he told iTnews.

"Telstra is the largest investor in mobile infrastructure, so its exclusion means that services would take longer to reach rural Australia."

Burley said that the big losers in Telstra's exclusion from the auction would be taxpayers, as the auction price would fall as a result of less bidding competition.

"Telstra is going ahead assuming it will be able to access this spectrum. The auction won't be until at least 2013 and there is still a lot in the air politically," Burley said.

He said that should Telstra be excluded from the 4G spectrum auction, the telco already has access to other spectrum bands to deliver LTE, or could purchase spectrum from other players.

James North concluded that Telstra would be highly unlikely to miss out.

"Telstra has certainly made clear many times that it sees [a future] 4G network as the jewel in the crown," he said.


Telstra must take part in 4G spectrum auction
 
 
 
Top Stories
Soft drinks and SoftLayer: A solution for hard times?
Coca-Cola Amatil's CIO Barry Simpson shares his story of cost-cutting, outsourcing and why his software developers to ride around in delivery trucks.
 
Optus considers breaking net neutrality in Australia
May charge Netflix, OTT providers for premium service.
 
AGL restructure sees CIO depart
Owen Coppage to leave after ten years.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest articles on BIT Latest Articles from BIT
Small business win in a budget with 'fair' savings: Abbott
Apr 17, 2015
Tony Abbott has reaffirmed that the government’s aim is “always to get taxes ...
Xero now includes an inventory function built-in
Mar 26, 2015
Xero has added inventory and other major new features to the latest release of its cloud ...
Apple reveals its new MacBook
Mar 13, 2015
Replacing the MacBook Air as Apple's thinnest laptop, the new MacBook comes packed with features.
Xero has released a new version of its app for the iPad
Mar 6, 2015
iPad-wielding Xero users can now take advantage of a new version of the iOS app for the cloud ...
Microsoft is offering Azure for Disaster Recovery to Australian SMBs
Feb 10, 2015
If you haven't talked to your IT provider about disaster recovery, it might be worth discussing ...
Latest Comments
Polls
Do you support the Government's data retention scheme?

   |   View results
Yes
  11%
 
No
  89%
TOTAL VOTES: 2370

Vote