Optus and Telstra pay $2.1bn for low-band 5G spectrum

Optus and Telstra have collectively paid almost $2.1 billion at auction for low-band spectrum used for 5G services.

The Australian Communications and Media Authority (ACMA) said Optus secured 12 lots of 900MHz spectrum for $1.48 billion, and Telstra won four lots of 850MHz spectrum for $616 million.

Telstra’s allocation is the maximum amount it was allowed to bid for under the competition limits set by the government.

Telstra’s chief financial officer Vicki Brady said the allocation that Telstra had been able to secure was “strategically important” to the carrier.

“We now hold 2x40MHz of low-band spectrum in the major cities and 2x45MHz in regional and remote areas,” Brady said.

“This is more than any other carrier, which is important given our larger customer base, and will help us continue to provide the best mobile coverage and service.”

Optus, meanwhile, said its customers would see a “huge boost” from the extra 900MHz spectrum it has secured.

“We applaud the government for prioritising competition and consumer interests in ensuring a competitive auction process that has also delivered more equitable holdings of this critical low band spectrum,” Optus CEO Kelly Bayer Rosmarin said.

“Optus is building the network of the future for our customers and 900MHz spectrum is its foundational layer. 

“With this additional spectrum, and our existing mid and high band spectrum, we can continue to deliver great coverage and bring the benefits of our technology leadership to more Australians.”

Australia's third mobile carrier, TPG Telecom, elected not to bid, believing its existing holdings from the merger of TPG and Vodafone to be sufficient for its network plans.

"Our recent merger brought together the spectrum held by the former VHA  [Vodafone Hutchison Australia] and TPG entities," CEO Iñaki Berroeta said.

"As a result, TPG Telecom has strong low-band spectrum holdings that are already deployed in our 4G and 5G networks.

"Given our existing low-band spectrum, TPG Telecom determined it was not in the best interests of our customers or shareholders to acquire more low-band spectrum at this auction."

ACMA’s acting chair Creina Chapman said the spectrum allocated to Telstra and Optus “will support the deployment of more wireless broadband services, facilitating higher speeds and more reliable networks for consumers.”

Licences won at auction come into force on July 1 2024 for a 20-year term ending in 2044. 

“Winning bidders may have the opportunity to obtain early access to the spectrum under special circumstances before licences commence,” the ACMA said.

It was the second auction of 5G spectrum this year, with a 26GHz millimetre-wave spectrum auction held back in April.

Communications Minister Paul Fletcher said the two auctions would “facilitate the growth of 5G, and set the groundwork for the pace of 5G network rollouts to increase in the year ahead.”

“The government recognises the opportunities the 5G rollout presents for economic growth and innovation, including in Australia’s regional communities,” Fletcher said in a statement.

“The outcome of this auction is an important milestone in making sure the benefits of 5G will be shared by all Australians.”