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Auction summary - 700 MHz residual lots (2017)

Quick summary

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 date

Commenced 4 April 2017 and concluded 10 April 2017

Amount raised

$1.55 billion

Licence expiry

31 December 2029

Results

Winning bidder

Spectrum sold

Winning price

TPG

10 MHz

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

$1.26 billion

Vodafone Hutchinson Australia  (VHA)

5 MHz

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

$285.9 million

Spectrum details

Band details

738 MHz - 748 MHz  paired with  793MHz -803 MHz

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

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

Licence type

Spectrum licences

Previous use

Analog television broadcasting

Licence period

11 years and 8 months commencing 1 April 2018.

Allocation details

Type of allocation

Price-based allocation of spectrum licences under s62 of the Radiocommunications Act 1992

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 unsold lots were allocated sequentially.

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.

Allocation information

Spectrum allocation direction – limits and payment

Technical information

Related information

 

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.

700MHz band

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.

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