Optus gets lion's share in 900Mhz auction as Telstra takes its limit and TPG bows out

Government has gained AU$2.1 billion from sale of 850/900Mhz spectrum.
Written by Chris Duckett, Contributor
Image: Chris Duckett/ZDNet

Optus has purchased 12 of the 16 lots of spectrum in the 850Mhz and 900Mhz bands for a total cost of AU$1.48 billion, the Australian Communications and Media Authority (ACMA) announced on Wednesday.

The telco picked up a single lower lot of 2x5Mhz in metro and regional allocations in the 900Mhz band, along with two pairs of 1MHz in downshift spectrum. In the upper bands, Optus gained three lots for a total of 2x20Mhz in metro and regional areas, but already had two lots of 5Mhz in the upper bands set aside for it for a pre-determined price of almost AU$357 million.

"With this additional spectrum, and our existing mid and high band spectrum, we can continue to deliver great coverage and bring the benefits of our technology leadership to more Australians," Optus CEO Kelly Bayer Rosmarin said.

"We applaud the government for prioritising competition and consumer interests in ensuring a competitive auction process that has also delivered more equitable holdings of this critical low band spectrum."

When Optus had its 10Mhz of spectrum set aside, TPG also had the same amount set aside, but the latter telco failed to take it up.

"Our recent merger brought together the spectrum held by the former VHA and TPG entities. As a result, TPG Telecom has strong low-band spectrum holdings that are already deployed in our 4G and 5G networks," TPG Telecom CEO Iñaki Berroeta said.

"Given our existing low-band spectrum, TPG Telecom determined it was not in the best interests of our customers or shareholders to acquire more low-band spectrum at this auction."

Due to the limits imposed upon it restricting telcos to holding 40% of spectrum under 1GHz, Telstra was only able to pick up two lots of 10Mhz in the 850MHz band for almost AU$616 million.

"With the 2x10MHz of 850MHz spectrum we've secured in this auction, added to our existing spectrum holdings, we now hold 2x40MHz of low-band spectrum in the major cities and 2x45MHz in regional and remote areas," Telstra CFO Vicky Brady said.

"This is more than any other carrier, which is important given our larger customer base, and will help us continue to provide the best mobile coverage and service.

"Over the seven years to end FY22, we will have invested AU$11 billion in our mobile network nationally with AU$4 billion of this invested in our regional mobile network. Because of this our mobile network now covers one million square kilometres more than any other telco -- that's the size of New South Wales and Victoria combined."

The spectrum licences will begin on 1 July 2024 and have a 20-year shelf-life, but telcos may get early access under "special circumstances", ACMA said.

The downshift spectrum won by Optus begins on the same date and lasts until 17 June 2028.

Updated at 1:36pm AEDT, 8 December 2021: Added TPG comment.

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