Australia wraps up $2b spectrum auction

Dylan Bushell-Embling
08 May 2013

Australia yesterday concluded its major digital dividend spectrum auction, with prospective new mobile entrant TPG winning two blocks of spectrum, and Vodafone Hutchison Australia pulling out of the race.

Regulator ACMA raised nearly A$2 billion ($2.03 billion) from the auction of spectrum in the 700-MHz and 2.5-GHz bands.

As rumored, fast-growing fixed line ISP and MVNO TPG Telecom participated in the auction, spending A$13.5 million for 2x10 MHz of 2.5-GHz spectrum.

Ovum senior analyst Nicole McCormick said TPG's investment lends credence to the speculation that TPG could be interested in becoming Australia's fourth MNO.

She said while such a plan “would be ambitious, we do not view this as unrealistic. TPG has demonstrated expertise in running a lean business model and it has the platforms (e.g. billing) in place to support an extended mobile business.”

Vodafone Hutchison Australia (VHA) had applied to take place in the auction, but withdrew before bidding commenced, indicating it plans to rely on its 1,800-MHz spectrum for LTE services.

McCormick said this could be a risky move. “We think it would have been a sensible long-term spectrum insurance policy for Vodafone to have picked up 2.5-GHz spectrum for data traffic management purposes in the metro areas.”

VHA is still struggling to win back the confidence of Australian consumers after a string of complaints and outages on its Vodafone-branded mobile networks.

VHA yesterday contracted Cisco provide the EPC equipment for its LTE rollout.

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