Adam Suckling, Deputy Chair
Australian Communications and Media Authority
In 1894 British physicist Oliver Lodge demonstrated for the first time that you could send morse code signals seemingly magically through the air using radiofrequency spectrum.
Fast forward to today and spectrum has transformed every aspect of our lives. Every time you stream music, plot your way using GPS, listen to the radio, turn on the baby monitor or use your mobile you are using spectrum to send and receive communications signals.
Australia’s three mobile networks cannot operate without it. Their 26,000 sites would amount to little and our phones would largely cease to do the things that we rely on them to do.
The Australian Communications and Media Authority (ACMA) is responsible for managing this spectrum in the public interest. It is one of our most consequential responsibilities.
How we allocate, licence and price spectrum shapes how Australians communicate, the resilience of our digital infrastructure, and the competitiveness of the economy.
The ACMA announced today one of our most important spectrum decisions this century – what should happen to nearly 70 spectrum licences that will expire between 2028 and 2032.
Most of these licences are used for mobile and fixed wireless communications and are held by Telstra, Optus, TPG and NBN Co.
Over the past three years, the ACMA has undertaken rigorous analysis to determine the best path forward. This work has included extensive engagement with stakeholders, multiple rounds of public consultations, detailed information papers and 90 stakeholder submissions.
The ACMA’s preferred view is to renew the licences used for mobile and fixed wireless until 2044.
We believe this will promote the efficient use of spectrum, drive investment, innovation and competition, as well as support important government policy objectives such as best ensuring Australians mobile services are not disrupted.
Without this spectrum the mobile operators would not be able to run their networks as they currently do, severely impacting their ability to provide 34 million mobile services, offer next generation services such as 6G, and expand their geographic coverage using new satellites.
Non-renewal would also undermine competition between existing operators, including 40 mobile resellers such as Boost Mobile, Amaysim and Aussie Broadband, which currently compete to offer consumers better services based on coverage, quality and price.
It would undermine Optus and TPG’s recent network and spectrum sharing agreement, which is bringing choice to regional areas historically dominated by Telstra.
The ACCC agrees with our view that renewing mobile spectrum licences will likely promote competition in the mobile services market.
Over the course of three years of public consultation the ACMA canvassed the prospect of new entrants into the terrestrial mobile market as we firmly believe in the benefits of competition.
We found no evidence of a potential new terrestrial mobile entrant.
Even so, some stakeholders argued that rather than renew the mobile operators' licences, we should run an auction.
We support auctions of unencumbered spectrum when demand exceeds supply or when a credible new entrant is seeking market access. In such cases we use auctions as a powerful mechanism to set prices and allocate spectrum.
That is not the situation here.
The spectrum we are talking about is not new or unutilised. It is used it to provide an essential service to the 99 per cent of Australian adults who have a mobile phone.
In these circumstances, a ‘free-for-all’ auction carries significant risk that a larger operator would acquire critically important spectrum currently held by a smaller operator.
This would undermine the smaller operator’s ability to offer services, leading to slower data speeds, dropped calls or difficulty connecting, and reduced coverage and service availability.
This would be highly detrimental to competition and the consumer benefits that flow from it.
Another risk with auctioning encumbered spectrum is that it would introduce multi-year uncertainty which disincentivises private sector investment.
This would be felt across the economy and negatively impact on productivity.
Finally, spectrum is a valuable public asset. The public deserves a fair return for its use. To determine its value, we have used benchmarking, an approach widely used by competition regulators and spectrum managers across the world.
The ACMA drew on advice from three independent economic consultancies and then had our approach peer-reviewed by DotEcon, another respected international economic consultancy.
We have looked at the prices paid for comparable spectrum in 205 allocations across 47 countries and determined that the appropriate projected market value for access to this public resource is $7.34 billion.
Oliver Lodge’s pioneering work with radio waves helped lay the foundations for the wireless communications that transformed the 20th century, culminating in the mobile technologies we all now use.
By determining the future of these expiring licences through the lens of the long-term public interest, the ACMA is delivering for consumers, by ensuring a fair return on spectrum, choice and competition, and continued investment and innovation by the mobile operators.