Digital dividend results announced

The Australian Communications and Media Authority (ACMA) has announced the outcomes from the digital dividend spectrum auction, which concluded on 7 May. All three bidders - Optus Mobile, Telstra and TPG Internet - secured spectrum in the auction, resulting in total revenues of nearly $2 billion. Four companies initially applied to participate; however, Vodafone Hutchison Australia withdrew before the auction, which started on 23 April 2013.

The results of the auction and the associated revenues are:

• Optus Mobile: 2 x 10 MHz in the 700 MHz band and 2 x 20 MHz in the 2.5 GHz band, at a cost of $649,134,167
• Telstra: 2 x 20 MHz (700 MHz band) and 2 x 40 MHz (2.5 GHz band), at a cost of $1,302,019,234
• TPG Internet: 2 x 10 MHz (2.5 GHz band) at $13,500,000
• Total spectrum sold: 2 x 30 MHz (700 MHz) and 2 x 70 MHz (2.5 GHz) for a total of $1,964,653,401
• Total spectrum unsold: 2 x 15 MHz (700 MHz band)

“The auction process itself ran smoothly and resulted in the allocation of spectrum to the companies that valued it the most,” said ACMA’s Chairman, Chris Chapman.

Demand in Clock Round 1 of the auction led to three unsold lots in the 700 MHz band. In the 2.5 GHz band, demand exceeded supply in the first round but reached equilibrium at the end of Clock Round 3, at which point the clock rounds closed. This level of demand during the clock rounds meant prices payable by bidders were only marginally above reserve prices.

“The auction tested the market and the auction’s conclusion is another important step toward realising Australia’s digital dividend,” said Chapman.

“This decades-long process of spectrum reform has already transformed the television industry, delivering greater diversity and better technical quality of television services to viewers. It will be complete when the new licences in the 700 MHz band become operational at the beginning of 2015.

“By making spectrum previously required for analog television transmissions available to meet rising demand for high-speed wireless broadband, the digital dividend auction will well position the Australian telecommunications industry to deliver fast, ubiquitous and symmetrical mobile broadband connectivity to consumers and industry.”

The Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, welcomed the announcement, saying that the spectrum will enable telecommunications carriers to deploy the next generation of wireless broadband technologies, including LTE, for a variety of new uses and further enhance Australia’s expanding digital economy.

Further information on the digital dividend auction is available on the ACMA’s website at www.engage.acma.gov.au/digitaldividend.