The Australian Communications and Media Authority (ACMA) has settled on a new format for its 700MHz and 2.5GHz spectrum auctions which will allow bids for packages deals.
The format in question is called the Combinatorial Clock Auction (CCA). While the CCA is new to the communications regulator, it has been used in a number of high-value spectrum auctions in Europe.
Parts of the 700MHz and the 2.5GHz spectrum will be made available for auction by late 2012 as part of the digital dividend thanks to the refarming of the radiofrequency spectrum used for analogue TV.
The digital TV switchover has progressed nicely and is set to be completed by the end of 2013.
The 700MHz and 2.5GHz bands are highly lucrative as telecommunication operators increasingly look to rollout LTE networks to meet wireless data download demands.
Using the CCA format to auction off the digital dividend spectrum bands is particularly advantageous for bidders that want to bid on different combinations of lots – or chunks – they are interested in.
This is to avoid the prospects of bidders securing only some of the spectrum they wanted, according to ACMA.
A combination of the 700MHz and 2.5GHz might be favoured by telcos interested in a wireless data network since 700MHz is good for coverage while the 2.5GHz is good for capacity, an ACMA spokesperson said.
The regulator has yet to define all the rule for the auction process although it has made it clear that while bidders can bid on as many packages as they want, each bidder can only win once.
“[CCA format] creates really good incentive for bidders to bid full value for the spectrum they are interested in and that is really important if you wan tto make sure you allocate it to the parties that value it the most,” an ACMA spokesperson said. “CCA offers a way of avoiding fragmented outcomes.”
Spectrum packages are also undefined under a CCA, with bidders pitching exactly want combination they prefer.
Reserve prices for the spectrum bands will be announced closer to the auction date next year.