Optus snaps up 3G spectrum from Qualcomm

Nicole McCormick
08 Feb 2010

SingTel-owned Optus has doubled its 2100Mhz spectrum pool in Australia’s eight capital cities, buying 10 Mhz of the prized 3G spectrum from Qualcomm-controlled 3G Investments Australia.

The deal is subject to approval from the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC).

In 2001, Optus paid A$206 million ($178.57 million) at auction for 10Mhz of spectrum at 2100 MHz.

An Optus source told The Australian that the price it paid Qualcomm – which picked up its untouched 10 Mhz spectrum block during 2001’s 3G auction – was roughly in line with its A$206 million auction price on a straight line depreciation basis.

“The purchase of 10Mhz of 2100Mhz spectrum is illustrative of how Optus is building further capacity in its mobile network to meet the explosive growth in demand for data services,” Optus managing director of products and delivery, Andrew Buay, told The Australian.

“We plan to maximize this additional spectrum to support the future growth of 3G mobile services among our retail and wholesale customer base,” he said.

“We think it was important for Optus to get the 2100Mhz spectrum [from Qualcomm],” Ovum’s Australian mobile analyst, Nathan Burley, told telecomasia.net.

“If you look at all the spectrum bands – 850Mhz, 900Mhz, 800Mhz, 2100Mhz - Optus was the most spectrum constrained,” he said.

Qualcomm is believed to have been trying to sell its 2100Mhz block for some time, but was waiting for the right price.

The fact that Telstra shied away from the Qualcomm-owned block could suggest that it is confident it will be able to take part in the coming “digital dividend” spectrum allocation, a planned sale of 2.5Ghz spectrum.

The government has threatened to block Telstra’s participation in both auctions in the event that it does not agree to the government’s structural separation plans.

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