DBCDE seeking renewal fees from Telstra, VHA for 800MHz concessions

4 Jan 2012

Australia’s Federal Government is reportedly proposing that mobile network operators Telstra and Vodafone Hutchison Australia (VHA) pay a combined AUD1.4 billion (USD1.4 billion) to retain the use of spectrum in the 800MHz band that they currently have access to. According to the Australian Financial Review, with the duo’s respective concessions due to expire in 2013, and with the state looking to both boost revenue and ensure a return to a budgetary surplus in 2012-13, a draft determination issued just prior to Christmas revealed the proposed levy.

The determination, released by communications minister Stephen Conroy, is understood to call on Telstra to pay AUD758 million to renew its 800MHz concession, while VHA would need to find AUD678 million to retain access to its frequencies in the band in question. Should either fail to make the payment it has been suggested that the spectrum in question could be put up for auction. The report cites industry sources as claiming that the move by Senator Conroy regarding the pricing of the 800MHz licence renewals came after negotiations between the Department of Broadband, Communications and the Digital Economy (DBCDE) and Telstra broke down, with the latter thought to have baulked at paying the price the department demanded.

With a consultation process regarding the reissue of expiring 15-year mobile spectrum concessions due to close on 16 January, both Telstra and Vodafone are bound by strict confidentiality clauses and as such have been unable to comment in detail regarding the licence renewal process. A unnamed spokeswoman for Telstra was cited as saying: ‘We are considering the draft information provided by the department and will respond by the due date,’ while a spokesman for Vodafone said: ‘Vodafone notes the government’s draft direction on spectrum licence renewal, and will be reviewing the proposal closely and providing feedback early in the new year.’