Given the growth of mobile broadband in Australia over the past couple of years, operators will welcome this move and eagerly await the spectrum. Perhaps most importantly, making the 2.5GHz band and digital dividend available will promote LTE rollout in Australia since these bands are considered to be the two most likely spectrum bands for LTE technology. Operators will be particularly attracted to the 2.5GHz band given its advantages in urban areas, and are likely to complement this by using the digital dividend frequencies for remote areas. Operators are expected to use the digital dividend spectrum to achieve widespread coverage while using the 2.5GHz band to provide capacity. The digital dividend is unlikely to be available before December 2013, when the complete nationwide switch-off of analogue TV is anticipated. As such, the earlier availability of the 2.5GHz band will prompt operators to begin their LTE development in urban areas first.
Both the 2.5GHz and digital dividend spectrum could form part of the government’s National Broadband Network (NBN) plan. Wireless technology will be one of key solutions for the 10% of Australian households not expected to be connected by FTTP.
Telstra potentially excluded from the auctions
In a bill expected to be debated in February 2010, the government is proposing to prevent Telstra from acquiring spectrum bands that are used for advanced wireless broadband services unless Telstra agrees to structural separation. As a consequence of this possible exclusion, Telstra may consider developing LTE in existing bands. As there is currently no suitable equipment to support LTE in other bands, Telstra may postpone its plans to commercially launch LTE services if the auction of the 2.5GHz band takes place this year, as hoped for by other industry players. This could lead to Telstra offering LTE services later than other operators that win spectrum in the 2.5GHz band in the next few years. ACMA will need to keep this in mind.