Got a few billion dollars burning a hole in your pocket? Today could be the day to put them to good use as the Australian Government opens its auction process for the so-called “Digital Dividend” radio spectrum recently vacated by analog television and now up for grabs for those wishing to dish up wireless services to the Aussie public.
It’s the opening day for the auction of 2 by 45MHz of radio frequencies in the 700MHz band, a process likely to go on until mid- to late-May. The Gillard Government has set a steep reserve price the minimum anyone can bid of $1.38 per megaherz.
Federal Communications Minister Stephen Conroy claims that the carriers should fork out billions for the spectrum.
Despite this only two serious bidders are expected to show up: Telstra and ” hopefully” Optus, though the latter has not declared its hand. Vodafone Hutchison Australia, which is short of cash as it seeks to rebuild its shattered network, has already indicated it won’t be taking part.
Some observers believe Vodafone may have done a deal with Optus to share whatever part of the spectrum it obtains, without Voda having to put massive sums up front.
Analyst Paul Budde believes the high price struck by the Government is “steep”, setting a major challenge for the telcos. “But the reality is that Telstra a and Optus cannot afford to play a key role,” said.
“The reality is that we won’t have a fully-functioning NBN for some time and wireless will have a major role to play in the near future. LTE in particular will play a key role.”
Budde is not critical of the high price set by Canberra, even though it may in the end be borne by the public in terms of higher fees. “The Government has a very valuable asset and naturally seeks a good price for it ” a commercial operation would do exactly the same,” he said.
