Govt delays 4G spectrum auction to 2013

Communications Minister Stephen Conroy has flagged a delay in the "digital dividend" spectrum auction to April 2013, allowing more time to prepare waterfront 4G spectrum for auction.

The spectrum, in the 700MHz and 2.5GHZ band, will be auctioned off to telcos for long-term evolution (LTE) networks across Australia. The auction of this spectrum was due to occur by November this year, but Conroy announced today that the date has been shifted to early 2013 on the advice of the Australian Communications and Media Authority (ACMA).

"The ACMA has advised that an April 2013 auction would maximise product certainty for bidders prior to the auction, and provide new licensees with adequate lead time to plan and deploy networks before their licenses commence," he said in a statement.

The spectrum is being made available as a result of the switch from analog to digital TV, with all services to be digital by the end of 2013. However, digital TV still occupies a portion of the 700MHz spectrum band, and before the telcos can begin operating LTE services in 700MHz, the TV services must be restacked within the spectrum band across the country.

Conroy said that Broadcast Australia had been appointed to work with the industry and ACMA, to develop a detailed timetable by November this year on when and where the restacks will be happening, with all restacks to be completed by 31 December 2014. "My Department is working with the ACMA and the broadcasting industry to implement the restack. The government expects that this re-organisation of affected digital TV services will be completed by 31 December 2014," he said.

The benefit of the delay is that, in areas where analog television has been shut off already, the restack can occur sooner and thus telecommunications providers can begin offering LTE services in that area earlier (once the auction has been completed). This will ideally lead to services being offered earlier than the originally intended 2015 date.

The new auction date was welcomed by Telstra.

"Telstra welcomes the greater certainty that this announcement provides, for the auction of the 'digital dividend' spectrum in the 700 MHz and 2.5 GHz bands," it said in a statement.

Optus' new vice president of corporate and regulatory affair David Epstein also welcomed the change, provided that spectrum was made available earlier, as a result of the early restacking.

"Optus is pleased with the announcement of a firm auction and restack timetable, which brings much needed certainty, in relation to the timing of important mobile infrastructure investment decisions," he said. "Timely access to 'digital dividend' spectrum is critical to Australia's future competitiveness and economic prosperity."

"We hope the government can provide early access to 700MHz spectrum for mobile broadband in areas where the digital switchover has occurred, and capacity can be made available."

Optus also completed its acquisition of WiMax wireless internet provider Vividwireless, from Seven Holdings today. Optus has now gained access to 98MHz of spectrum that it will use for a time-division duplexing (TDD) LTE network, to complement its frequency-division duplexing (FDD) LTE network operating in the 1800MHz spectrum band.

Optus is testing out the TDD-LTE in its Macquarie Park campus and at a site in St Mary's in New South Wales. It is understood that these two sites were picked because they would not interfere with Vividwireless' existing WiMax network.

Vodafone's general manager of public policy and industry strategy Matthew Lobb said the decision to delay the auction until 2013 was "pragmatic and sensible".

"Confirmation of the timing of the auction process gives us the certainty we have been seeking," he said in a statement. "This is good for competition and an important step forward that will greatly assist our network planning and investment forecasting requirements."

In addition to other spectrum licence renewals, the government is expecting to reap $4 billion from spectrum in the coming years, and has allocated $143.2 million in the 2012-2013 Budget to prepare for the "digital dividend" auction.