Telstra, Optus and TPG splash nearly $2 billion on spectrum [Updated]

The results of the digital dividend auction have been released, with the spectrum previously allocated for analogue TV broadcasts being sliced up between Telstra, Optus and TPG. Update: Comments from Telstra, Optus, and what happens to the unsold spectrum.
The ACMA has released the figures for the otherwise silent auction, noting that the total revenues raised total nearly $2 billion, with more than half of that coming directly out of Telstra’s rather fat wallet. Vodafone had initially expressed interest in bidding but dropped out, leaving only three bidders.
Now, what will they do with all that tasty spectrum? Primarily run 4G services on them, although the licences sold today won’t become operational until 2015. Optus and Telstra do already have 4G LTE 1800Mhz services for sale right now, but the allocation of additional spectrum, and especially spectrum in contiguous blocks has advantages for speed and reliability, something that Vodafone’s long been trumpeting about its own upcoming 4G network.
Here’s what each of them paid.

Bidder Spectrum secured Total price
700 MHz band*

2.5 GHz band*

Optus Mobile 2×10 MHz

(20 MHz in total)

2×20 MHz

(40 MHz in total)

$ 649,134,167

Telstra 2×20 MHz

(40 MHz in total)

2×40 MHz

(80 MHz in total)

$ 1,302,019,234

TPG Internet Nil

2×10 MHz

(20 MHz in total)


Total spectrum sold 2×30 MHz

(60 MHz in total)

2×70 MHz

(140 MHz in total)

$ 1,964,653,401

Total spectrum unsold 2×15 MHz

(30 MHz in total)



Optus has released a statement attributed to CEO Kevin Russell:

“The spectrum Optus has acquired in the 700 MHz band will provide stronger 4G coverage across both metropolitan and regional Australia, allowing us to expand our 4G services to more customers than ever before. The additional spectrum purchased in the 2.5 GHz band, when combined with our already substantial holdings in 2.3 GHz, will enable Optus to provide unparalleled network capacity for 4G data services to our metropolitan customers.”

Gizmodo quotes Telstra as stating the following:

The spectrum will be used to enhance our network to help support extraordinary demand growth for mobile services and data. With the 700 MHz and 2.5 GHz spectrum we will be able to deliver faster speeds, more capacity and expansive wide area coverage of 4G LTE technology on our Next G network.
The low-frequency nature of 700MHz means the mobile signal can travel relatively longer distances, which is ideal for improving the services we can offer to customers in rural and regional areas. It also means better inbuilding coverage in metro and suburban areas.
Together with ongoing investment in our wireless network, which will total $1.2 billion in 2012-13 Financial Year, and the application of next generation LTE-Advanced 4G technology that we announced earlier this year, the additional spectrum will help ensure we continue to deliver Australia’s leading mobile network for our customers.

Which only leaves TPG yet to play its digital dividend card.
The Australian Financial Review, meanwhile, states that Communications Minister Stephen Conroy intends to revisit a sale of the unsold portion of the spectrum in “the next two or three years”.
Sources: ACMA, Gizmodo, AFR

Image: Alasdair Dickson

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.