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Central Government, Connected Government, Digital Inclusion, Policy

Australia targets US $4.3 billion from wireless auction

By Shahida Sweeney | 11 February 2012

This November (2012), the Australian Government will open up a highly-sought 4G spectrum auction — meeting pent-up demand for mobile communications services, including smartphone access to government services and faster downloads of mobile data.

This high-quality spectrum auction offers much-needed elecronic airspace for wireless communications to support smartphones, broadband internet access, radio commucations and TV access — channels being used increasingly by governments for service delivery and information-sharing programs.

The government’s spectrum auction is expected to return the administration to a budget surplus of nearly AUD$4 billion (US$4.3 billion), at the same, finalising protracted (and often controversial) negotiations with incumbent telcos that’re up for licence renewal — and jostling for government-controlled wireless airspace.

Access to valuable wireless spectrum opens up new telco opportunities to deliver 4G services, including improved data services, access to wireless broadband, and downloads to smartphones, tablets, and other mobile devices.

Senator Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, says bidding restrictions will apply for the next auction, while creating a “level-playing field” for Australia’s spectrum allocation.

“There are therefore strong incentives for auction participants to seek to purchase more spectrum than they need in order to gain a competitive advantage, ” he says.

Industry “caps” will apply with the amount of spectrum each telco can bid for, while striking a delicate balance between government policy reforms, and the industry’s race to boost revenue from 4G offerings.

Government telco industry watchdog, the Australian Communications and Media Authority will monitor limits on the amount of spectrum due to be sold to individual companies in late 2012.

Companies are restricted to a limit of 2x20MHz in the 700MHz band, and 2x40MHz in the 2.5GHz band; these limits have been set to ensure a level playing field for three main bidders participating in the auction, without excluding a potential new competitor.

These limits ensure there is a choice of providers in the mobile sector for advanced services being provided over the digital dividend spectrum, at the same time, offering “a good outcome for Australian consumers,” notes Senator Conroy.

More recently, the Australian Government has played hard-ball with incumbent telcos, while bringing senior executives to the negotiation table to streamline pricing and access arrangements, and help modernise Australia’s telecommunications infrastructure.

Federal Cabinet and peak agencies including Treasury, the Department of Finance and Administration, and the Department of Broadand, Communications and the Digital Economy are participating in government-industry discussions, including submissions and other determinations.

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