Telstra, Optus And TPG Buy Spectrum In Government Auctions [Updated]

The future of 4G in Australia took a big step forward this morning after the results of the government's Digital Dividend were announced. Telstra, Optus and TPG Internet have collectively parted with almost $2 billion to secure spectrum in the 700MHz and 2.5GHz bands.

Update: Telstra and now Optus have put out statements talking about what they plans to do with new spectrum.

The digital spectrum auction, also known as the Digital Dividend by the Australian Communications and Media Authority (ACMA) is the sell-off of spectrum once used for analogue TV services in Australia running in the 700MHz band, as well as the sell-off of spectrum in the 2.5GHz band. These services are to be used by telcos for 4G services going forward.

Having a bunch of contiguous spectrum is pretty advantageous for pushing out faster 4G services. Just ask Vodafone: its upcoming 4G network is running on 20MHz of contiguous spectrum and the results definitely speak for themselves.

The Digital Dividend has been a secret, silent auction happening behind the scenes for the last few months, but finally the results have been announced.

Telstra parted with a whopping $1.3 billion for spectrum, securing two 20 MHz spectrum blocks in the 700MHz band and two 40 MHz blocks in the 2.5GHz band.

Optus was the second largest spender, parting with $649 million for two 10 MHz blocks in the 700MHz band and two 20MHZ spectrum blocks in the 2.5GHz band.

It had long been rumoured that TPG would also throw its hat in the ring for spectrum, pointing to potential investment in its own bespoke mobile service (currently TPG is an MVNO for Optus).

Those rumours were confirmed by the ACMA, who revealed that TPG Internet had spent $13.5 million for two 10MHz blocks of spectrum in the 2.5GHz band.

In total, the government netted $1.96 billion in the spectrum auctions, and only two 15MHz blocks of spectrum in the 700MHz band went unsold.

It's unclear exactly what the telcos plan to do with their new spectrum, but it's pretty clear that we'll see new 4G services spring up using the services some time in the new year as the switch-over from analogue TV to digital TV occurs.

Telstra has come out and told the market what it plans to do with its spectrum:

The spectrum will be used to enhance our network to help support extraordinary demand growth for mobile services and data. With the 700 MHz and 2.5 GHz spectrum we will be able to deliver faster speeds, more capacity and expansive wide area coverage of 4G LTE technology on our Next G network.
The low-frequency nature of 700MHz means the mobile signal can travel relatively longer distances, which is ideal for improving the services we can offer to customers in rural and regional areas. It also means better inbuilding coverage in metro and suburban areas.
Together with ongoing investment in our wireless network, which will total $1.2 billion in 2012-13 Financial Year, and the application of next generation LTE-Advanced 4G technology that we announced earlier this year, the additional spectrum will help ensure we continue to deliver Australia’s leading mobile network for our customers.

No surprises there, but the more you know.

And Optus has a statement out now, too:

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.
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.

We'll continue to update as we hear more.


Tower image via Shutterstock



    The new spectrum at 2.5Ghtz will be used for capacity upgrades in CBD areas, congested suburbs and maybe some regional areas with extremely high demand (eg Kalgoorlie in WA, where 4G at 1800 is already congested). It will provide higher speed cat4 devices with more capacity to actually get up to a decent speed.

    The new spectrum at 700Mhtz will be used to rollout 4G services into regional areas. It can also be used to increase in-building coverage in cities.

    The only thing that isn't really clear is what kind of service TPG plans to roll out.

    Wonder if this means if some of the Telstra wholesalers will roll out 4G, though don't see Kogan or Aldi doing it anytime soon. Hopefully Boost will though due to their direct partnership.

      Really hoping Amaysim roll out 4G with Optus sometime. Vaya and LiveConnected do it but apparently there is a huge discrepancy with data usage.

      Technically you can already get 4G on Boost now.. you just have to know the little trick that lets you get it.
      I am currently enjoying 4G speeds on my S4 (outright) with a boost account :)

    buuuuuuut, phones dont support 700 or 2500??? Checked both lumia 920 and iphone 5.
    Sooooooooooooo will phones have to be made to support these frequencies?

      I'm guessing they'll have to update the hardware, which will probably mean that the devices current;y available won't support the new frequencies. Might not be as big a problem as it looks like it might be a while before the start using the new frequencies.

      Oh and "thay plans" should probably be "they plan".

      Certain models of both of those phones support 700 MHz.

        Ah, USA uses 700.
        And 2500 seems to be used in south america (probably only a few android phones though).

        Manufacturers are going to need to make a phone that supports our current 4G frequencies (900 and 1800) PLUS 700 and 2500.

        I'm 90% sure that such a phone doesn't exist at the moment.

          I remember reading sometime earlier this year on this site that Telstra is looking to roll out what they call Cat4 Handsets that can use all of this spectrum

          No Australian telco uses 900MHz for 4G. At the moment, both Telstra and Optus use 1800. Vodafone will also utilise the 1800 spectrum.

    that's the problem with all these different bands, its making phone purchasing increasingly difficult as the phone you want may not support one or all of these increasing number of different frequencies. it was bad enough finding next g compatible mobiles

    I really hope this isn't all the spectrum and some will saved for public saftey LTE networks

    I really hope this isn't all the spectrum and some will saved for public safety LTE networks

    "Telstra and now Optus have put out statements talking about what thay plans to do with new spectrum."
    ...what thay plans to do... ?? Doesn't anyone proofread before publishing on Giz? (US articles included)

    Soooo, I'm going to be "that" guy.... Does this mean my iPad 3rd Gen will now actually be "4G"? Even after all the riff-Raff? The specs say it supports 700MHz...

    "*This model provides cellular data connectivity -- 700, 2100 MHz "LTE" as well as UMTS/HSPA/HSPA+/DC-HSDPA (850, 900, 1900, 2100 MHz) and GSM/EDGE (850, 900, 1800, 1900 MHz)"

    There is no mention of possible TV signal interference, in Europe there is considerable effort being put into preventing TV interference from 4G signals @ 700 MHz (see for example). Is this not going to be a problem in Australia?

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