Sold! ACMA completes high-value spectrum auction | ACMA

Sold! ACMA completes high-value spectrum auction

.

Telecommunications companies have scooped up both lots on offer in the Australian Communications and Media Authority’s auction of valuable 700 MHz spectrum.

The auction of the 700 MHz unsold lots began on Tuesday 4 April. After almost a week featuring strong bidding between three companies, the auction concluded on Monday 10 April, realising revenues of more than $1.5 billion, significantly exceeding the reserve price of around $857 million.

‘This additional spectrum will help industry meet ever-increasing demand for high-speed wireless broadband,’ said acting ACMA Chairman Richard Bean. ‘The public has realised record rates of return from the sale, and should now benefit from the services this 700 MHz spectrum can provide.’

TPG Internet Pty Ltd secured 2 x 10 MHz for $1,260,161,000 (equivalent to $2.75/MHz/pop) and Vodafone Hutchison Australia Pty Limited secured 2 x 5 MHz for $285,907,000 (at the reserve price of $1.25/MHz/pop).

This 700 MHz spectrum adds to the spectrum sold at auction in 2013 which is already used extensively throughout Australia to provide 4G mobile broadband.

‘The sale of the remaining unallocated portion of the 700 MHz ‘digital dividend’ spectrum brings an important chapter in Australian economic reform to a successful close,’ said Richard Bean. ‘It completes the digital dividend process begun in the 1990s, with the progressive conversion of free-to-air television from analog to digital technology enabling much better TV and a massive boost to high-speed wireless broadband in Australia.’

For more information please see the backgrounder below, or contact: Emma Rossi, Media Manager, (02) 9334 7719, 0434 652 063 or media@acma.gov.au.

Media release 14/2017 - 12 April

Backgrounder

The auction was conducted in accordance with the procedures specified in the Allocation Determination. The auction was conducted online using a simple clock auction (SCA) format. The SCA format is much like an English open outcry auction, conducted online, with the auction manager controlling the amount and timing of bidding increments.

There were two lots on offer for the residual 700 MHz band spectrum auction:

1. The 10 MHz lot, which represents the following frequency ranges:

  • 738–748 MHz
  • 793–803 MHz.

2. The 5 MHz lot, which represents the following frequency ranges:

  • 733 MHz–738 MHz
  • 788 MHz–793 MHz.

The spectrum auctioned was the spectrum not sold at the digital dividend auction conducted in 2013.

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

Licences for the 700 MHz band have a term of 11.75 years. They will commence on 1 April 2018 and expire on 31 December 2029, aligned with the expiry date for licences issued after the 2013 digital dividend auction.

The winning bidders can make a choice to pay the winning price by 31 January 2018 as one amount, or in three annual instalments commencing in January 2018.

The reserve price for this auction was equivalent to the reserve of $1.36/MHz/pop for 700 MHz spectrum in the 2013 digital dividend auction, but adjusted for the shorter licence term. 

Following is a table of auction results from 2013:

Bidder

Spectrum secured

Total price

700 MHz band*

2.5 GHz band*

Optus Mobile

2×10 MHz

(20 MHz in total)

2×20 MHz

(40 MHz in total)

$649,134,167

Telstra

2×20 MHz

(40 MHz in total)

2×40 MHz

(80 MHz in total)

$1,302,019,234

TPG Internet

Nil

2×10 MHz

(20 MHz in total)

$13,500,000

Total spectrum sold

2×30 MHz

(60 MHz in total)

2×70 MHz

(140 MHz in total)

$1,964,653,401

Total spectrum unsold

2×15 MHz

(30 MHz in total)

Nil

N/A

*Under the allocation limits, a single bidder could not acquire more than 2 x 25 MHz (50 MHz in total) in the 700 MHz band and more than 2 x 40 MHz (80 MHz in total) in the 2.5 GHz band.

Competition limits for this latest auction limited any one party to 2 x 20 MHz in the 700 MHz band, including holdings from the 2013 auction.

Last updated: 12 April 2017