Australia is set to gain a new mobile network operator (MNO) after TPG Telecom emerged as one of the two winning bidders in an auction for previously unsold 700MHz frequencies.
The Australian Communications and Media Authority (ACMA) kicked off the spectrum sale last week, raising a total of AUD1.5 billion (USD1.1 billion) for state coffers, far exceeding the reserve price of AUD857 million. Of the two companies to secure new frequencies, TPG was by far the bigger spender, laying claim to 2×10MHz of 700MHz frequencies for AUD1.26 billion, while the other winner – Vodafone Hutchison Australia (VHA) – walked away with a 2×5MHz block in return for just under AUD286 million. Both operator’s new concessions are valid from 1 April 2018 and expire 31 December 2029, with these dates having been set to align with the expiry dates of those 700MHz licences issued after Australia’s digital dividend auction in May 2013. TPG and VHA have the option of making a single payment for their respective concessions by 31 January 2018, or by paying in three annual instalments commencing that month; TPG has already said it is opting for the latter.
Commenting on the auction’s conclusion, ACMA chairman Richard Bean noted: ‘This additional spectrum will help industry meet ever-increasing demand for high speed wireless broadband … The public has realised record rates of return from the sale, and should now benefit from the services this 700MHz spectrum can provide.’
Meanwhile, on the back of bagging spectrum, TPG has set forth its plans with regards to becoming a MNO, confirming that it will spend around AUD600 million over three years on constructing a mobile network which will cover 80% of the population, using ‘current advanced technology’. TPG meanwhile pointed to the fact that it expects its new 700MHz spectrum to be complemented by earlier acquisitions of 1800MHz (February 2016) and 2500MHz frequencies (May 2013), noting that its ‘current spectrum holdings will enable a national network’.