According to industry newsletter CommsDay, Vodafone has reached out to the Australian Federal Government to offer a $594 million bid for spectrum left over from the 2013 auction which netted the government $2 billion.
According to the department of Communications and the Arts release on Friday ‘The Government has received a proposal from Vodafone Hutchison Australia (VHA) to acquire 2 x 10 MHz of the unsold 700 MHz ‘digital dividend’ spectrum’.
The bid is a surprise after Vodafone famously decided not to take part in the auction, but it could be going ahead, with the Communications department stating ‘The terms of VHA’s proposal are consistent with the Government’s spectrum policy objectives’. Those objectives include ‘maximising the overall public benefit derived from the spectrum by ensuring its efficient allocation and use’.
According to the Ministerial Draft issued by Communications Minister Mitch Fifield on the proposal, the payment for the license to use the 2x 10MHz lots in the 700MHz spectrum can either be paid up front as a lump sum of $571,814,450, or as an installments totalling $594.3 million in instalments:
- first instalment—$274,500,000 on 31 January 2018;
- second instalment—$159,900,000 on 31 January 2019; and
- third instalment—$159,900,000 on 31 January 2020.
Instead of opting into the auction of 700MHz spectrum, of which Optus, Telstra and TPG all bought lots, Vodafone instead decided to refarm their 850MHz 3G network to 4G LTE. At the time, Vodafone cited the fact that many smartphones in Australia did not support the 700MHz spectrum being offered, however in the intervening time, this has changed drastically.
According to ZDNet however, at least one of the companies who did take part in the spectrum auction isn’t happy, with a Telstra spokesperson saying
We are concerned at the process and potential outcome. There was a competitive auction in 2013 for this spectrum, which Vodafone chose not participate in.
Despite being one of the world’s largest telecommunication companies, it is now trying to buy spectrum at a price we believe is below the market rate and outside a transparent competitive process.
Demand for mobile capacity continues to grow, and we query how taxpayers can be sure this provides a higher return than a competitive process.
Submissions on the Ministerial Draft on the Vodafone proposal are being accepted until COB Friday, 3 June 2016
