Spectrum slots unsold and no Vodafone bid as TPG joins Conroy’s “digital dividend” spectrum auction

Communication Minister Stephen Conroy has come up over $1 billion short in the “digital dividend” spectrum auction, with two spectrum slots remaining unsold after Vodafone failed to place a bid.

Optus Mobile, Telstra and, in a surprise move, internet service provider TPG Internet all joined in the auction for 700 MHz and 2.5 GHz band licences in spectrum is currently used by analogue VHF and UHF television services.

The licences will become available for mobile and wireless internet services as analogue television services are decommissioned, with the 2.5 GHz band licence becoming active in October 2014 (except in Perth metro and regional Western Australia, which commences on February 2016) and the 700 MHz band in January 2015.

“By making spectrum previously required for analogue television transmissions available to meet rising demand for high-speed wireless broadband, the digital dividend auction will well position the Australian telecommunications industry to deliver fast, ubiquitous and symmetrical mobile broadband connectivity to consumers and industry,” says ACMA’s Chairman, Chris Chapman.

The results saw Optus pick up two 10 MHz slots (20 MHz in total) in the 700 MHz band and two 20 MHz slots (40 MHz total) in the 2.5 GHz band for a total of $ 649,134,167.

“The spectrum Optus has acquired in the 700 MHz band will provide stronger 4G coverage across both metropolitan and regional Australia, allowing us to expand our 4G services to more customers than ever before,” says Singtel-Optus chief country officer Kevin Russell.

“The additional spectrum purchased in the 2.5 GHz band, when combined with our already substantial holdings in 2.3 GHz, will enable Optus to provide unparalleled network capacity for 4G data services to our metropolitan customers.”

As SmartCompany reported yesterday, Telstra picked up two 20 MHz slots in the 700 MHz band (40 MHz in total) and two 40 MHz slots (80 MHz in total) in the 2.5 GHz band for a total of $ 1,302,019,234.

Meanwhile, in a surprise move, TPG Internet successfully bid $13,500,000 to pick up two 10 MHz slots in the 2.5 GHz band, which will most likely be used for wireless broadband.

However, the result left 30 MHz in 700 MHz spectrum unsold, with Vodafone opting not to bid in the auction.

“15 MHz paired of the 700 MHz spectrum, worth in the order of $1 billion, remains in the Commonwealth’s hands for now, and we intend to return it to the market in the next two or three years,” Senator Stephen Conroy said in a statement.

“The ACMA has previously stated that it should not be assumed any unsold spectrum would be returned to market in the short term, or at a price that is lower than the reserve price set for this auction.

“I endorse that as a sensible view and intend to provide the ACMA with a formal Direction that supports that approach, following public consultation.”

Under the bidding rules, no carrier could pick up more than more than 80 MHz in total in the 2.5 GHz band or 50 MHz in total in the 700 MHz band, meaning that while Telstra or Optus could have picked additional spectrum, neither carrier chose to do so.