NZ govt outlines terms for 700MHz spectrum auction

4 Sep 2013

The New Zealand government has released details of its upcoming auction of spectrum in the 700MHz ‘digital dividend’ band. The spectrum will be auctioned off in nine lots each comprising 2×5MHz spectrum blocks; each lot has a reserve price of NZD22 million (USD17.2 million). The government – which has spent around NZD157 million on clearing the spectrum through the switch-over to digital TV – says that it does not intend to charge a premium for the frequencies as such a tactic may harm subsequent Long Term Evolution (LTE) deployments. Communications Minister Amy Adams commented: ‘In setting the reserve price, we have balanced generating a fair return on the sale of the spectrum rights with the significant investment required by mobile network operators to build the 4G network infrastructure. The reserve price also takes into account the value to New Zealand of having 4G connectivity widely deployed’.

The bidders will initially only be allowed to bid for a maximum of three lots of 2x 5MHz spectrum, but if any spectrum is left over, this may be increased to four. However, any company that wins three lots must build at least five new base stations every year for five years in areas that currently lack mobile coverage. Further, if a bidder wins four lots, they will need to build ten new sites per year over five years. Existing players such as Vodafone New Zealand, 2degrees and Telecom Mobile will each be required to ensure that 75% of their rural 2G and 3G sites are upgraded to 4G within five years, while any new players will be required to roll out new networks covering 50% of New Zealanders within five years.

Registration for the auction is set to open on 11 September, and bidding will get underway on 29 October.