Australia 4G auction raises A$2 billion

Australia’s auction of spectrum for use with 4G services has raised a total of A$2 billion ($2.01 billion) for government coffers, according to a statement from the country’s telecoms regulator.

Announcing the results, the Australian Communications and Media Authority revealed that incumbent operator Telstra (Melbourne, Australia) had spent the most on frequencies, coughing up more than A$1.3 billion for 40MHz of 700MHz spectrum and 80MHz in the 2.5GHz band.

Australia’s auction of spectrum for use with 4G services has raised a total of A$2 billion ($2.01 billion) for government coffers, according to a statement from the country’s telecoms regulator.

Announcing the results, the Australian Communications and Media Authority revealed that incumbent operator Telstra (Melbourne, Australia) had spent the most on frequencies, coughing up more than A$1.3 billion for 40MHz of 700MHz spectrum and 80MHz in the 2.5GHz band.

Fierce rival Optus (Sydney, Australia) acquired exactly half as much spectrum in each band for the sum of $649 million, while TPG Internet, a internet service provider, spent just $13.5 million on 20MHz of 2.5GHz spectrum.

A high-profile absentee was Vodafone Hutchison Australia (Sydney, Australia), which withdrew from the auction before it began on April 23.

The struggling joint venture between the UK’s Vodafone (Newbury, UK) and Hutchison Whampoa (Hong Kong) had previously suggested it might rely on existing 1800MHz airwaves to provide 4G services instead of acquiring new spectrum for the purpose.

Nevertheless, as a result of its absence, some 30MHz of the prized 700MHz spectrum went unsold.

“By making spectrum previously required for analog television transmissions available to meet rising demand for high-speed wireless broadband, the digital dividend auction will well position the Australian telecoms industry to deliver fast, ubiquitous and symmetrical mobile broadband connectivity to consumers and industry,” said Chris Chapman, the ACMA’s chairman.

Licenses in the 700MHz band are set to become available in January 2015 while those at 2.5GHz will be usable from October 2014, except in Perth and parts of Western Australia, where winners will have to wait until February 2016 to receive their concessions.

All licenses will be valid for a period of 15 years.

Telstra said it had picked up spectrum for “close to the reserve prices” that would allow to extend the coverage of its mobile broadband network.

“The low-frequency nature of 700MHz means the mobile signal can travel relatively longer distances, which is ideal for improving the services we can offer to customers in rural and regional areas,” said chief executive David Thodey. “It also means better in-building coverage in metro and suburban areas.”

Optus made similar claims about the spectrum it received.

“The spectrum Optus has acquired in the 700MHz band will provide stronger 4G coverage across both metropolitan and regional Australia,” said Kevin Russell, the chief executive.

“The additional spectrum purchased in the 2.5GHz band, when combined with our already substantial holdings in 2.3GHz, will enable Optus to provide unparalleled network capacity for 4G data services to our metropolitan customers,” he added.