Auction summary: 2.5 GHz band spectrum reallocation 2013 | ACMA

Auction summary: 2.5 GHz band spectrum reallocation 2013

Overview

Status Complete

Auction date

Commenced 23 April 2013 and concluded 7 May 2013

2.5 GHz expiry date

30 September 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 for the 2.5 GHz band demand 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 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 (2.5 GHz Band) 2012
Radiocommunications (Spectrum Licence Allocation-Combinatorial Clock Auction) Determination 2012

Technical Instruments
Radiocommunications (Unacceptable Levels of Interference – 2.5 GHz band) Determination 2012
Radiocommunications Advisory Guidelines (Managing Interference to Receivers - 2.5 GHz Band) 2012
Radiocommunications Advisory Guidelines (Managing Interference from Transmitters – 2.5 GHz Band) 2012

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. 2 of 2012

Spectrum reallocation declaration
Radiocommunications (Spectrum Re-allocation) Declaration No. 2 of 2011

Licence type

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

Key documents:

Consultation informing the Determination for the Digital Dividend Auction
Applicant information package 
Verification Of Auction Results
Background on the lot configuration
2.5 GHz band review 
700 MHz and 2.5 GHz band allocation
Technical Framework 2.5 GHz

Spectrum Details for the 2.5 GHz band reallocation

Spectrum offered at this auction

14 lots of 2x5MHz pairings were offered at the auction:

  • 2500-2505/2620-2625 sold to TPG
  • 2505-2510/2625-2630 sold to TPG
  • 2510-2515/2630-2635 sold to Telstra
  • 2515-2520/2635-2640 sold to Telstra
  • 2520-2525/2640-2645 sold to Telstra
  • 2525-2530/2645-2650 sold to Telstra
  • 2530-2535/2650-2655 sold to Telstra
  • 2535-2540/2655-2660 sold to Telstra
  • 2540-2545/2660-2665 sold to Telstra
  • 2545-2550/2665-2670 sold to Telstra
  • 2550-2555/2670-2675 sold to Optus Mobile
  • 2555-2560/2675-2680 sold to Optus Mobile
  • 2560-2565/2680-2685 sold to Optus Mobile
  • 2565-2670/2685-2690 sold to Optus Mobile

 

Licence period:

Spectrum Licences commenced on 1 October 2014 for a period of 15 years expiring on 30 September 2029 with the exception of Perth metropolitan region and Western Australia region which commenced on 1 February 2016 for a period of 13 years and 8 months.

Spectrum Details:

Spectrum in the 2.5 GHz band has high-data capacity in densely populated high demand areas and lower in-building penetration than the 700 MHz band.

Previous use:

Long-term electronic news gathering (ENG). These services were migrated to 1980-2010 MHz and 2170-2200 MHz band frequencies.

Spectrum details for 700 MHz band offered in this auction are available on the spectrum auction list details page for the Digital Dividend 703-803 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.

700mhZ AND25mhZ LOTS png

Last updated: 27 June 2017