Vodafone will have to go head-to-head with other telcos in its bid to claim additional mobile spectrum bandwidth, with the government putting 2 x 15 MHz of unallocated 700 MHz wireless digital dividend spectrum up for auction.
Following a digital dividend auction in 2013, the 2 x 15 MHz of 700 MHz spectrum remained unsold and continues to be available for allocation under national spectrum licences.
“The unallocated 700 MHz spectrum is highly valued for 4G LTE mobile broadband services due to its ability to maintain data signals reliably over long distances,” said Australia’s Minister for Communications and the Arts, Mitch Fifield, in a statement.
The move comes after a consultation on Vodafone Hutchison Australia’s proposal to buy 2 x 10 MHz of unsold 700 MHz spectrum by direct allocation, and means that Vodafone Australia will now have to compete with other interested telcos looking at snapping up the spectrum.
According to Fifield, the consultation with stakeholders on Vodafone Australia’s proposal to buy the bandwidth indicated strong market interest from other industry players.
As a result, the government determined that the competing interests would be best resolved through a competitive process, with the Australian Communications and Media Authority (ACMA) set to conduct the auction on behalf of the government.
A number of competing local telecommunications providers, including Optus, Telstra, and TPG made submissions to the government during the consultation process.
For its part, Telstra said, “We believe the proposed sale [to Vodafone] is detrimental to the integrity of Australia’s spectrum management framework and potentially undermines confidence in future auction processes.
“We believe the only way to satisfactorily resolve these shortcomings and maintain the integrity of the spectrum allocation framework is to adopt an alternative process which is transparent, competitive, and open to all market participants,” the company said.
Meanwhile, Optus said it did not agree to the draft proposal to sell the spectrum, and voiced concerns that the draft Ministerial Direction outlining the proposed sale to Vodafone was “prepared in haste”.
“The release of the consultation paper and the lack of adequate prior consultation with relevant stakeholders, including other potential purchasers of the spectrum, merits full reconsideration of the process,” the company said in its submission.
The auction announcement follows the completion of the 1800 MHz band spectrum auction conducted earlier this year by the ACMA, with Optus, Telstra, TPG Internet, and Vodafone all taking a bite. Optus and Telstra paid $196 million and $194 million, respectively, for their portions.
“We are particularly pleased that the ACCC will be looking at the competition limits that should apply in respect of this auction,” said TPG chairman, David Teoh, in a statement. “Access to spectrum represents the ultimate barrier to entry in this market.
“Existing providers, particularly those with substantial existing spectrum holdings, including in the 700MHz band, might have an incentive to limit the ability of a fourth entrant to the secure spectrum.
“We will be making submissions to the ACCC that they recommend allocation limits that will have the best outcomes for competition and consumers,” he said.
Teoh's comments follow TPG's moves to enter the wireless communications market in Singapore, with the company submitting an application to take part in the country's 'New Entrant Spectrum Auction'.