Operators cool on $1b estimate for new mobile space
Sydney Morning Herald
Wednesday March 3, 2010
THE mobile phone industry is talking down the price for premium spectrum space soon to become available, warning that a high price would starve telcos of funds to bring new services online.The federal government is considering its options for the auction of 126 MHz in spectrum that will become available beyond 2013 when free-to-air television completes its transfer from analog broadcasting to a less spectrum-hungry digital format.The Communications Minister, Stephen Conroy, is expected to make an announcement today on the government's policy approach on current spectrum licences at an industry forum in Sydney. The government is keen to auction the spectrum in a process that industry sources say will be dominated by mobile telcos keen to use the space to launch 4G wireless services and the total price might be more than $1 billion.The Australian Mobile Telecommunications Association has warned the government to temper its expectations, saying a high price will hamper the development of new wireless services."There are examples where prices for spectrum have been very, very high, and in terms of available [capital expenditure] that has a major impact on what follows," said the association's chief executive, Chris Althaus, citing European auctions of earlier 3G spectrum."It's a concern that if there's an overinflated price, that might impact on levels of investment."Mr Althaus said the industry was grappling not just with the auctioning of analog television's 700 MHz frequency, but also the allocation of the 2.5 GHz spectrum and the lapse soon of 15-year licences on existing frequencies.A similar tract of 700 MHz spectrum was auctioned two years ago in the US for about $US20 billion.The Australian government will need to decide how best to split the spectrum on offer. Industry sources suggested the possible alternatives were three blocks of 40 MHz, or two blocks of 50 MHz, with both cases requiring the residual spectrum to act as a buffer to prevent interference. The most likely bidders are the three existing mobile phone operators: Telstra, Optus and Vodafone Hutchison Australia.
© 2010 Sydney Morning Herald
