Nine companies are set to bid in the Australian personal communications services spectrum auction April 14, amid uncertainties surrounding the auction process and an economic crisis gripping many nations in the Asia-Pacific region.
The Australian Communications Authority will auction 10 PCS licenses in the 1800 MHz and 800 MHz bands, totaling 230 megahertz. The nine applicants, three of which have U.S. ownership, have lodged AU$37.1 million in eligibility payments and entry fees.
According to Tim Conway, analyst with Factotum Research in Canberra, the eligibility payments suggest that Australia’s three existing Global System for Mobile communications operators-Telstra Corp. Ltd., Optus Mobile Pty. Ltd. and Vodafone Networks Pty. Ltd.-will acquire the bulk of spectrum, although some new entrants will make some strong bids. AAPT Wireless Pty. Ltd., part of Australian long-distance carrier AAP Telecommunications, OzEmail Ltd., Australia’s largest Internet service provider, and OzPhone, a consortium that includes Qualcomm Inc., Siemens AG and other Australian companies, all made substantial upfront payments to the ACA. The companies’ upfront payments are based on their bidding activity plans.
Other participants in the auction include U.S. companies Catapult Communications Corp.-which paid only $18,410 (Australian) in upfront fees-and Global Mobility Networks Inc. Hutchison Telephone Pty. Ltd. is the only Asian company to participate in the auction. Prior to the Asian currency crisis, Asian powerhouses NTT DoCoMo and Samsung Electronics Co. Ltd. were expected to participate.
“I think there is enough spectrum for all, and bids will be fairly low,” said Conway. “My sense is the three incumbents will bid mostly in 1.8 GHz because that gives them more space for their existing GSM services. They are limited by regulation in their bidding in 800 MHz in any case. So bidding in the 800 MHz band is most likely between Telstra and the new entrants.”
Auction participants most likely will bid low because of the many questions surrounding the Australian auction process. One major barrier to entry, Conway highlighted, is the fact that new carriers will be up against three nationwide GSM networks.
“I am curious about the business case that supports this for a new entrant, given that roaming has to be negotiated,” he said.
However, some of the new entrants have indicated their use of the spectrum will go beyond basic mobile phone service. OzEmail is a pioneer in selling voice over the Internet, said Conway. It has indicated its participation in the auction is a strategic move. AAPT Wireless has stated it will use the spectrum for much more than digital mobile or GSM services, Conway added. Qualcomm’s participation in the auction may be a way for Code Division Multiple Access technology to gain a foothold in the country. Qualcomm did not comment by press time.
Other uncertainties surrounding the auction include whether the government will auction other types of spectrum in the future and how incumbents will be handled, what license renewal timeframes will be and how dominate carriers will be treated.
