Auction summary: 700 MHz 'Digital Dividend' - 2013 | ACMA

Auction summary: 700 MHz 'Digital Dividend' - 2013

Overview

Status Complete
Auction date Commenced 23 April 2013 and concluded 7 May 2013

700 MHz licence expiry date

31 December 2029  

The Australian Communications and Media Authority (ACMA) auctioned spectrum in the 700 MHz band in the 2.5 GHz band. Four applicants (Optus, Telstra, TPG Internet and Vodafone Hutchinson Australia (VHA) applied to participate in the auction. However, VHA withdrew before the auction. The auction process ran smoothly and resulted in the three remaining bidders, Optus Mobile, Telstra and TPG Internet securing the reallocated spectrum in the auction. 

Auction Results

Winning Bidders Spectrum Secured Total Price*
  700 MHz band 2.5 GHz band  

Optus Mobile

2 x 10 MHz
(20 MHz in total)

2 x 20 MHz

(40 MHz in total)

$649,134,167

Telstra

2 x 20 MHz

(40 MHz in total)

2 x 40 MHz
(80 MHz in total)

$1,302,019,234

TPG Internet

Nil

2x10 MHz
(20 MHz in total

$13,500,000

Total spectrum sold

2 x 30 MHz

(60 MHz in total)

2 x 70 MHz
(140 MHz in total)

$1,964,653,401

Total spectrum unsold

2 x 15 MHz
(30 MHz in total)

Nil

N/A

* The lots were sold as packages so bidders’ values for each band are not available.

Auction Details

Competition Limits

Under the allocation limits, a single bidder could not acquire more than:

  • 2 x 45 MHz (90 MHz in total) in the 700 MHz band; and
  • 2 x 70 MHz (140 MHz in total) in the 2.5 GHz band
Method of Sale

Spectrum in the 700 MHz and 2.5 MHz band was allocated to new licensees using a combinatorial clock auction (CCA) format. The CCA consisted of two major stages over three rounds of bidding:  
an allocation stage (comprising clock rounds and a supplementary round), which determines the spectrum that each bidder secures
an assignment stage (comprising assignment rounds), which determines the specific frequency ranges awarded to each successful bidder from the allocation stage.  

 

Demand in the first round led to three unsold lots in the 700 MHz band. While demand for 2.5 GHz exceeded supply in the first round and reached equilibrium at the end of Clock Round 3.

 

Two auction design companies were engaged to conduct and verify the auction. Power Auctions a US based company experienced in the CCA format was engaged to provide an online auction system, expert advice and support to the ACMA for the auction. The Smith Institute based in the UK, who have extensive experience in supporting regulators that have auctioned spectrum using the CCA format, were engaged to verify the auction results and provide related services.  Verification Of Auction Results

Reserve Price

The Minister of the Department of Broadband, Communications and the Digital Economy directed the ACMA to set the reserve price in the 700 MHz band at $1.36/MHz/pop. In the 2.5 GHz band, the ACMA set the reserve price at $0.03/MHz/pop.

Legal Instruments

Allocation Instruments

Radiocommunications Spectrum Marketing Plan (700 MHz Band) 2012
Radiocommunications (Spectrum Licence Allocation-Combinatorial Clock Auction) Determination 2012  


Technical Instruments

Radiocommunications (Unacceptable Levels of Interference – 700 MHz Band) Determination 2012
Radiocommunications Advisory Guidelines (Managing Interference from Transmitters – 700 MHz Band) 2012

Radiocommunications Advisory Guidelines (Managing Interference to receivers – 700 MHz Band) 2012

Australian Communications and Media Authority (Realising the Digital Dividend) Direction 2010

 

Allocation details direction

Australian Communications and Media Authority (Spectrum Licence Allocation – Combinatorial Clock Auction – Eligibility Deadline and Payment Terms) Direction 2013

 

Reserve price direction

Australian Communications and Media Authority (Allocation Procedures – Reserve Prices) Direction No. 2 of 2012

 

Allocation limits direction

Radiocommunications (Spectrum Licence Limits) Direction No. 1 of 2012

 

Spectrum reallocation declaration

Radiocommunications (Spectrum Re-allocation) Declaration No. 1 of 2011

 

Licence type

Spectrum licences are issued under Part 3.2 (section 62) of the Radiocommunications Act 1992

Key documents:

Digital Dividend Spectrum Auction Frequently Asked Questions
Consultation informing the Determination for the Digital Dividend Auction

Applicant information package
Verification Of Auction Results

Background on the lot configuration
Technical Framework for the 700 MHz Band

Department of Broadband, Communications and the Digital Economy's Digital Dividend Green paper

700 MHz and 2.5 GHz band allocation

Spectrum Details for the 700MHz band ‘Digital Dividend’700 MHz Spectrum Pairing

9 National lots of 2x 5MHz pairings offered in allocation

 

  1. 703-708/758-763 sold to Optus
  2. 708-713/763-768 sold to Optus
  3. 713-718/768-773 sold to Telstra
  4. 718-723/773-778 sold to Telstra
  5. 723-728/778-783 sold to Telstra
  6. 728-733/783-788 sold to Telstra
  7. 733-738/788-793 unsold
  8. 738-743/793-798 unsold
  9. 743-748/798-803 unsold

The unsold spectrum was subsequently sold at the April 2017 auction.

Licence period:

700 MHz Spectrum licences commenced 1 January 2015 for 15 years.
Expiry date: 31 December 2029

Spectrum Details:

The 700 MHz spectrum band supports mobile broadband services across Australia. Spectrum in the 700 MHz band is suited to providing coverage over a wide area and with high in-building penetration.

Previous use:

Analog television broadcasting

Spectrum details for the 2.5 GHz band that were sold at this auction are available on the spectrum auction list details page for the 2500-2690 MHz band range.

Background

The last analog television broadcasting services were switched off across Australia at the end of 2013. One of the major benefits of digital television broadcasting is that it requires less spectrum than analog broadcasts even with the addition of extra digital channels. Australia’s switch to digital free-to-air television broadcasting involved services being retuned and stacked more efficiently into the broadcasting spectrum below 694 MHz. The cleared radiofrequency spectrum in the 700 MHz band is a dividend of the digital switchover. Regulatory and statutory changes enabled the ACMA to reallocate this ‘digital dividend’ to new licensees through a spectrum auction process.

In 2010 an extensive review of the 2.5GHz band used for electronic news gathering (ENG) services recommended the ENG migrate to other frequencies (1980 to 2010 MHz and 2170 to 2200 MHz short to medium use spectrum) and the 2.5 GHz band frequency be reallocated for new uses, especially wireless communication services.

The ACMA made the decision to reallocate the released radiofrequency spectrum in 700 MHz and 2.5 GHz bands in a single auction. All the 2.5 GHz band spectrum sold at this auction. Whereas two 15 MHz in the 700 MHz band remained unsold. This spectrum was sold in the 700 MHz residual lots auction in 2017. The tables below show the ownership status of these bands at the end of the auction in 2013.  

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Last updated: 05 September 2017