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700 MHz band

Auction summary: 700 MHz residual lots - April 2017

Depositphotos_39917621_l-2015_cupcake jpg

Overview

Status Complete

Auction date

Commenced 4 April 2017 and concluded 10 April 2017

Amount raised

$1.55 billion

Licence expiry

31 December 2029

The Australian Communications and Media Authority (ACMA) auctioned the 700 MHz band spectrum residual lots (the unsold lots from the 2013 digital dividend auction of 700 MHz band spectrum) sequentially as two lots on an Australia-wide basis.

All lots were sold at auction. The total revenue raised was $1,544,590,000 from two successful bidders TPG and Vodafone Hutchinson Australia (VHA). The 700 MHz spectrum band has the potential to support mobile broadband services across Australia and to allow TPG and VHA to offer customers high speed 4G mobile and data coverage.

Auction Results

Winning bidder - Lot 1

TPG secured the 10 MHz lot, which represents the frequency ranges:    

  • 738–748 MHz paired with
  • 793–803 MHz

Sold for $1.26 billion.

Winning bidder - Lot 2

Vodafone Hutchinson Australia (VHA) secured the 5 MHz lot, which represents the frequency ranges:

  • 733 MHz–738 MHz paired with
  • 788 MHz–793 MHz

Sold for $285.9 million.

Auction Details 

Method of Sale:

The auction was conducted online using a simple clock auction (SCA) format in accordance with the procedures specified in the allocation determination. An SCA is like an English open outcry auction (EOO), where all lots may be open for bidding in a simple online ascending-bid process at the same time, or they may be allocated sequentially. The SCA format combines the simplicity of the EOO auction format with additional functionality enabled by an electronic platform. An SCA format formalises the process by which prices increase and how much time bidders are given to place bids. These 700 MHz lots were allocated sequentially.

Legal Instruments

Allocation Instruments

Radiocommunications Spectrum Marketing Plan (700 MHz unallocated lots band) 2016

Radiocommunications (Spectrum Licence Allocation - 700 MHz Band) Determination 2016

 

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

 

Spectrum allocation direction – limits and payments

Radiocommunications (Spectrum Licence Allocation – Residual 700 MHz Spectrum) Direction 2016

 

Spectrum reallocation declaration

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

Spectrum Details:

The 700 MHz spectrum band supports mobile broadband services across Australia.

Previous use:

Analog television broadcasting

Licence period

11 years and 8 months commencing 1 April 2018. Licences expire on
31 December 2029

Licence type

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

Competition Limits

Bidders could not secure more than 2 x 20 MHz as a result of this auction. (Telstra were unable to bid in this auction due to achieving the competition limits for the 700 MHz band in the 2013 Auction)

Key Documents

700 MHz spectrum consultation on draft allocation instruments Nov 2016

Applicant Information Package for 700MHz Auction April 2017

Technical Framework for the 700 MHz Band

Background

The ACMA held a single auction in 2013 to reallocate radiofrequency spectrum in the 700 MHz band and the 2.5 GHz band. The spectrum became available when:

  • The last analog television broadcasting services were switched off across Australia at the end of 2013. 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 known as the ‘digital dividend’. 
  • In 2010, an extensive review of the 2.5 GHz 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.    

Not all the spectrum was sold at the conclusion of the digital dividend spectrum auction, two 15MHz lots of spectrum remained unsold in the 700 MHz band.

spectrum-pic-2 jpg 

In October 2016 the Minister for Department of Communications and the Arts announced that unsold lots would be auctioned and the ACMA released a consultation paper setting out how it proposed to configure the spectrum for auction and how the auction would operate. The ACMA received nine submissions to this consultation. On 14 December 2016 the Minister directed the ACMA on two key auction settings.

  • The Minister directed the ACMA to set a reserve price of $1.25/MHz/pop. This is the equivalent of the 2013 ‘digital dividend’ auction reserve price, adjusted for a shorter licence term and inflation.
  • The Minister also directed the ACMA to set allocation limits of 2 x 20 MHz for the auction. The Australian Competition and Consumer Commission (ACCC) found these allocation limits would promote competition, encourage efficient outcomes in the mobile market and be in the long-term interests of end-users.

The ACMA’s overriding responsibility is to ensure that radiofrequency spectrum is allocated efficiently to maximise the overall public benefit derived from the spectrum. This is in accordance with the objectives of the Radiocommunications Act 1992.  

After considering the submissions, the ACMA made the Radiocommunications (Spectrum Licence Allocation – 700 MHz Band) Determination 2016 and Radiocommunications Spectrum Marketing Plan (700 MHz unallocated lots band) 2016, then opened the auction to applicants. All the residual spectrum in the 700MHz band was sold at the April 2017 auction.

Last updated: 29 June 2017

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