Communication industry bully boy Senator Stephen Conroy is demanding that local carriers, Telstra, and Vodafone stump up $1.4 Billion dollars for continued access to the mobile spectrum, a move that could force up the cost of 4G communications.
As a threat Conroy has said that if the money is not forked out for the 800 Megahertz spectrum he will let foreign carriers bid for the spectrum via an auction.
This is the same Minister who threatened Telstra over the $36B NBN Network which is struggling to attract customers and has delivered no new connections during the past six months.
Conroy, who wants to be seen as a “hero” among his labour colleges has released a determination pricing document that proposes that Telstra pays $758M and Vodafone $678.
The amount demanded from Vodafone follows a recent investment by the Company of over $1B in a new mobile network with analysts suggesting that the amount being demanded could cripple the Company in Australia.
According to several analysts the demands being made by Conroy could force up the cost of mobile communication in Australia.
The 15-year spectrum licences – necessary for delivering mobile services i8s expected to deliver up to $4bn to labour government coffers.
When the licences were first sold to the likes of Telstra, Optus and Vodafone between 1998 and 2000 they fetched a combined $2bn now Conroy is demanding up to double.
The release of new spectrum will allow carriers to expand the amount of customers they carry on their networks while delivering faster download speeds.
Without the added capacity, the mobile operators would be facing overloaded and unusable networks.
The Australian newspaper said that such is the government’s expectation of a big windfall from the spectrum renewals that during negotiations earlier in the year to set rules for the auction, the big three mobile operators were warned that if they did not offer enough money to renew their licences the government would launch a public auction.