Australia Just Announced Bidding Limits for the Next 5G Spectrum Auction

Australia Just Announced Bidding Limits for the Next 5G Spectrum Auction
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The Australian government just announced a 1 GHz allocation limit on the upcoming mmWave 5G band. This will be the highest 5G spectrum to be made available in Australia so far.

5G Spectrum Allocation

In October 2019 Minister for Communications, Cyber Safety and the Arts, Paul Fletcher, first announced the governments intentions to auction off mmWave spectrum.

A press release revealed 2.5 GHz of 26 GHz spectrum would be be made available.

“The Government has today declared that 2.4 GHz of essential spectrum in the 26 GHz band will be made available for spectrum licensing to facilitate the rollout of 5G across Australia.”

This announcement has since been deleted but a cached version still exists.

A week prior Mr Fletcher also made a declaration for spectrum re-allocation under the Radiocommunications Act. The Radiocommunications (Spectrum Re-allocation—26 GHz Band) Declaration 2019, allows the Australian Communications and Media Authority (ACMA) to re-allocate spectrum across 29 cities and regional centres for new broadband and 5G services.

Bidding Limit Announced

Now we know how the bidding limit that will be placed on telcos. On Thursday Mr Fletcher announced a 1 GHz allocation limit in the upcoming spectrum auction.

“I have directed the Australian Communications and Media Authority to set allocation limits of 1 GHz,” Fletcher said in a press release.

“This decision was informed by advice and analysis from the Australian Competition and Consumer Commission and aligns with the Government’s communications policy objectives.”

Is Telstra being targeted?

Mr Fletcher alluded to market fairness as a reason for applying allocation limits of spectrum.

“Success in the mobile market ultimately depends on access to spectrum. Applying allocation limits means that the 26 GHz spectrum cannot be monopolised by any one operator,” Fletcher said in a press release.

While no specific telco was named, it’s possible that Telstra is being alluded to. Telstra was the first telco to begin rolling out 5G in Australia. It also has the most robust 5G coverage in the country right now.

And when the first 3.6 GHz band spectrum was auctioned off in 2018, Testra bought exponentially more than anyone else.

Telstra paid $386,008,400 for 143 lots, with TPG-Vodafone paying $262,283,800 in a joint venture, and Optus paid $185,069,100 for 47 lots.

Telstra itself is supportive of this week’s announcement.

“The certainty provided by the Minister’s 1GHz decision will help telcos maximise the benefits of 5G deployment in this spectrum,” a Telstra spokesperson said in an email to Gizmodo Australia.

“To ensure Australia can maintain its 5G leadership, we support the Minister’s statement that the necessary spectrum should be available as quickly as possible and we look forward to the auction taking place early next year.

But despite these assurances from the Mr Fletcher, Optus is sceptical about a lack of monopoly. This is because a 1 GHz bidding cap of a total 2.4 GHz of spectrum is still quite a lot. Theoretically a single telco could 41.66% of the total.

“This decision effectively allows one player to gain a material advantage in the transition to 5G by acquiring up to 42% of the spectrum,” Andrew Sheridan, Optus Vice President of Regulatory and Public Affairs, said in an email to Gizmodo Australia.

“It is a missed opportunity to take a different approach that would set the foundation for a more competitive 5G market, which would ultimately drive greater public benefit from the use of the spectrum.”

Optus was unable to provide comment on its participation in the 26 GHz. However it will be occuring in March, 2021.

Vodafone remained similarly coy about whether it will be bidding.

“The 26 GHz band will be an important part of the 5G spectrum landscape and we note today’s announcement,” said a Vodafone spokesperson in an email to Gizmodo Australia.

“As the process moves forward, we look forward to the finalisation of the remaining auction parameters.”