Smartphone owners are set to be slugged as carriers Telstra, Optus and Vodafone look to recover $3 billion in spectrum fees which the Federal Government will announce today is being paid for access to new 4G spectrum.An additional $4 billion dollars in fees is expected when the Federal Labour Government calls an auction for additional spectrum later this year.
The first payments for access to the highly prized 800 megahertz spectrum is set for June 2013 according to the Australian Financial Review.
The release of the new spectrum will see an explosion in fast new 4G LTE smartphones, tablets and wireless dongles.
The agreement among carriers follows a bitter row late last year when the Federal Government sought to get up to $4 billion dollars from the carriers for spectrums.
Optus is expected to go on a payment plan with the Federal Government as part of a staged payment program.
Telstra, who already has the fastest wireless network in Australia, could get a discount for paying $1.3 billion dollars upfront.
According to the AFR bidding restrictions announced by Senator Stephen Conroy could allow two carriers to buy most of the 700 MHz spectrums.
“The agreed fees makes Australia one of the most expensive Countries in the world when it comes to the cost of access to spectrums, especially as we only have a population of 22 Million” said one analyst.
Yesterday Telstra said that their new LTE/4G network – Australia’s first – is proving a great success, with LTE devices “selling like hotcakes” according to CEO David Thodey.
He was speaking after delivering Telstra’s results for the first half of the financial year, ended December 31. They showed a 30 percent rise in net profit to $1.47 billion for the first half- but only a 1.1 percent rise in revenue, at $12.4 billion.
The results were below most analysts’ expectations, and reflected – among other things – major continuing problems at Sensis, home of the rapidly declining Yellow Pages, and the drooping fixed-line business.
But Thodey said Telstra’s mobile business was booming, with 958,000 new domestic mobile customers added during the six months. “That translated into growth of 10.9 per cent in our mobile business,” said Thodey.
Mobile broadband services accounted for approximately half of the 958,000 new mobile services, he added.
Thodey said more than 100,000 LTE-capable dongles sold in its first three months of operation of the new LTE network. They accounted for a quarter of the 436,000 new mobile broadband services added to Telstra’s network during the first half.
In addition, the LTE-capable HTC Velocity 4G smartphone, launched last month, had become the company’s “third most successful handset ” in recent weeks.
Thodey also said Telstra is “close” to concluding its agreements on the National Broadband Network as it continues negotiations with the ACCC on structural separation plans.
Telstra shares dropped 7 cents or 2.03 percent on the ASX yesterday.