The government is planning to auction off key 1800MHz spectrum in regional Australia that will likely lead to improved 4G services outside of the major cities of Australia.
The auction for the spectrum will be held in November 2015, and run by the Australian Communications and Media Authority (ACMA), which last month recommended an auction be held for the spectrum.
The 1800MHz spectrum is already used by Telstra, Optus, and Vodafone to deliver 4G services in metropolitan Australia, but has mainly been used in regional Australia for point-to-point backhaul services. The government has found large parts of the spectrum remain unused and would be suitable for services.
There will be a limit on the amount of spectrum telcos can bid for, set at 2x25MHz. This was against the recommendation of incumbent Telstra, but was sought by both Optus and Vodafone. The companies argued that up until the release of 700MHz spectrum, Telstra had a monopoly on 4G in regional areas due to 1800MHz spectrum it picked up in 1998.
The government said that the competition limit decision was made on the advice of the ACMA.
Vodafone is unhappy with the competition limit, however, because the company said the government should have taken into account the fact that Telstra already has spectrum holdings in the 1800MHz band in regional Australia.
"It is difficult to understand the rationale for setting competition limits that could allow Telstra to corner 2x40MHz of spectrum in this band since the limit ignores their existing holdings. No other prospective auction participant can come close to this outcome, meaning that one player is effectively insulated from competition," Vodafone's general manager of policy Matthew Lobb said in a statement on Friday.
"Already consumers in some parts of regional Australia suffer from a lack of choice and unfair market conditions. By reducing incentives for investment and competition in regional areas, consumers will miss out on the value that big city mobile customers take for granted."
Current users of the spectrum will need to vacate the spectrum by June 2017, but winning bidders will be able to deploy services earlier than that in areas where the spectrum is already vacant.
If some users cannot vacate the spectrum by June 2017, the ACMA has said it could issue temporary apparatus licences to those users until they can vacate the spectrum.
It may not be just the telcos buying up spectrum, with mining giant Rio Tinto also indicating that it had an interest in using 1800MHz spectrum for its private wireless networks in its aluminium mines in northern Australia.