Vodafone Australia wins 700MHz mobile broadband spectrum

Vodafone Australia has announced winning 2x 5MHz of spectrum in the 700MHz band during the regulator's mobile broadband spectrum auction this month, paying AU$1.25 per MHz per head of population for a total of AU$285.9 million.

Vodafone said this pricing was in line with what it had initially proposed to pay back in 2015, when it enquired whether it could buy the spectrum outright for either AU$571,814,450 upfront or in three instalments totalling AU$594.3 million.

The Australian Communications and Media Authority (ACMA) last year decided to auction off the remaining 700MHz spectrum -- which is used for additional 4G mobile broadband capacity, particularly over long distances -- after consulting on Vodafone's proposal and determining that there was strong market interest from other providers.

It revealed its proposed entry fee, lot configuration, and auction methodology in October.

"This spectrum band -- made available after Australia switched from analog to digital TV -- is highly valued for mobile broadband, in particular 4G services," acting ACMA Chairman Richard Bean said earlier this year.

"We expect that the spectrum will be used to provide high-speed mobile voice and data coverage to regional and metropolitan Australia."

The ACMA then opened applications for its 700MHz spectrum auction in January, as well as confirming that it would be auctioned off in two lots: One lot of 2x 10MHz in the 738-748MHz frequency range paired with 793-803MHz; and one lot of 2x 5MHz in the 733-738MHz paired with 788-793MHz.

The winner of the 2x 10MHz lot has yet to be announced, but Vodafone, TPG, Optus, and Telstra all expressed interest in bidding for the spectrum, with TPG CEO David Teoh saying it could allow it to become the fourth mobile operator in Australia.

An allocation limit of 2x 20MHz was imposed for the auction, and Telstra was told it would not be permitted to buy more spectrum in the 700MHz band, as it already holds a majority.

Vodafone had chosen not to take part in the original 700MHz spectrum auction in 2013, during which Telstra bought 2x 20MHz of the 700MHz spectrum band and Optus bought 2x 10MHz of spectrum in the 700MHz band.

Spectrum licences in the 700MHz band will commence on April 1, 2018, and expire on December 31, 2029.

According to Vodafone Australia chief strategy officer Dan Lloyd, the mobile carrier has also renewed its spectrum holdings in the 2100MHz band for AU$544 million.

"In metropolitan areas, we now have the second-largest metropolitan low-band spectrum holding, and the largest holdings in the key 1800MHz and 2100MHz bands," Lloyd said.

"We previously expressed an interest in acquiring 2x 10MHz of spectrum in 2015, but since then we have accelerated the re-deployment of our other existing spectrum for 4G, and have put in place plans to deploy leading-edge features in our network."

As the telecommunications carrier with the least network coverage across rural and remote Australia, Vodafone has been pushing to acquire more coverage, including by suggesting this week that the National Broadband Network (NBN) provide a wholesale mobile service using its fixed-wireless infrastructure or share spectrum, fixed-wireless towers, equipment, and transmission and satellite backhaul with mobile carriers.

Vodafone has been a major proponent of infrastructure sharing in order to extend its own mobile network at minimal cost, also pushing reform to the universal service obligation (USO), butting heads with Telstra and Optus on the wholesale mobile domestic roaming issue -- whereby it would be permitted to piggyback off Telstra's mobile infrastructure -- and taking part in the federal government's mobile blackspot program.

It also concluded a "major network upgrade" on its 4G network in Canberra, using the 1800MHz spectrum it secured during the ACMA's auction last year.