Telcos splash $543m on 1800 MHz spectrum

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Telcos splash $543m on 1800 MHz spectrum

ACMA reveals auction winners.

Optus, Telstra, TPG and Vodafone have emerged as the winners of the Australian Communications and Media Authority's $543.5 million 1800 MHz spectrum auction.

The auction was for regional spectrum in the 1725-1785 MHz and 1820-1880 MHz bands, along with spectrum that had become available after the reissuance of expiring licences.

For the regional 1800 MHz spectrum, lots were auctioned off across 12 geographic regions, with each lot including 5 MHz in the lower part of the band (1725–1785 MHz) paired with 5 MHz in the upper part of the band (1820–1880 MHz).

There was a total of 147 lots on offer as part of the auction, with bidders restricted to a maximum of 2 x 25MHz chunks of spectrum out of the 2 x 60MHz for sale, as a result of lobbying by Optus and Vodafone.

The biggest spender was Optus, which offered a total of $196 million to pick up spectrum across seven regions.

Telstra was the second largest bidder at $191 million, with TPG’s $88 million exceeding Vodafone’s $68 million spend at the auction.

Vodafone chose to participate in this time around after staying out of the 2013 spectrum auction. Telstra, Optus and TPG were also big winners in that year's auction.

Six of the 147 lots remained unsold at the end of the auction, covering Mackay, Maryborough, Dubbo and regional WA. While ACMA reserves the right to auction this spectrum in the future, there are no announced plans to do so at the moment.

A full list of the successful bidders has been published on the ACMA website.

“The use of common frequencies between metropolitan and regional areas will help reduce dead zones across urban and rural boundaries, and give customers a seamless 4G experience when they’re on the go,” Optus chief executive Alan Lew said.

Telstra pointed out that it managed to win 57 blocks of spectrum in the auction  a larger number than Optus had secured  while spending less than its competitor.

“Securing this extra spectrum allows Telstra to deliver more capacity to cater to our customers’ growing demand for mobile data. It will also enable mobile data to be delivered at even faster speeds,” Telstra chief executive Andy Penn said.

TPG boss David Teoh said fixed-line broadband had been the backbone of the company's growth so far, but wireless connectivity would play an "increasing role" in the future needs of telco customers.

"We have made this significant investment to inject ourselves into that future," he said.

ACMA chairman Chris Chapman said there was strong competition for the spectrum.

“1800 MHz spectrum is already used extensively in Australia’s major cities, mainly to provide 4G telecommunications," he said.

"With previously unallocated 1800 MHz spectrum in regional areas now in the hands of mobile broadband service providers, the auction should enable improvements to the availability and performance of 4G telecommunications services right across regional Australia."

The auction process commenced in September last year, with bidding starting on November 30 and concluding February 4, using a simultaneous multi-round ascending (SMRA) auction format.

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