The Australian government will exclude the market's largest operator Telstra from taking part in a digital dividend auction of 700-MHz spectrum, on the advice of telecoms regulator ACMA.
ACMA held that because Telstra already owns more than 50% of available low-band spectrum, a victory in the auction would only increase its dominance.
Communications minister Mitch Fifield has instructed ACMA to set a reserve price for the auction of $1.25 ($0.93) per MHz per head of population covered.
The terms of the auction will stipulate that no operator can own more than two 20 MHz blocks of spectrum in the 700 MHz band.
Setting such a cap could allow both Telstra rivals Optus and Vodafone Australia to secure more spectrum to compete against the incumbent. If major fixed line operator TPG chooses to participate the operator would also be better positioned to roll out a fourth 4G network in Australia.
TPG spent A$13.5 million ($10 million) for 2x10 MHz of 2.5-GHz spectrum in 2013. The operator also recently won the auction to become Singapore's fourth mobile network operator after securing 60 MHz of 4G spectrum.
The digital dividend auction will involve 2x15 MHz of the 700-MHz spectrum freed up from the migration from analog to digital broadcasting, but left unsold during the initial digital dividend auction in 2013.