MELBOURNE, Australia-Seven of the nine bidders won lots in Australia’s PCS (Personal Communications Services) spectrum auction, which raised almost A$350 million (US$218.5 million) for the federal government. Four winners-AAPT Wireless, Hutchison Telephone, OzPhone and Catapult Communications-were first-time entrants into the Australian wireless market.
The auction, which ran for more than a month, offered 230 lots in the 800 MHz and 1800 MHz bands of the spectrum for metropolitan, regional and remote areas of Australia.
While the new entrants were able to gain a toehold in the country’s wireless and mobile communications industry, the three cellular incumbents were able to tighten their holds on the cellular phone market by making significant purchases. None more than Telstra Corporation Ltd., which contributed to almost half the total amount bid, spending about A$177 million (US$110.5 million). It purchased substantial spectrum in the 1800 MHz (235 megahertz total) and the 800 MHz (100 megahertz) bands in every available market: 5 metropolitan, 12 regional and 4 outback.
Optus Mobile Pty. Ltd. bought 15 megahertz of capacity in only the 1800 MHz band in each of the five capital cities, at a value of A$51.4 million (US$32 million). And the third incumbent mobile carrier, Vodafone Networks Pty. Ltd., bought capacity in the 1800 MHz band in the five capitals cities as well as in Canberra, Darwin and Tasmania.
AAPT, Hutchison and OzPhone bought slices of the 800 MHz spectrum, while the fourth, Catapult Communications, won two bits of the 1800 MHz band in Cairns and regional South Australia.
Communications Minister Richard Alston and the auction’s manager, the Australian Communications Authority, praised the outcome for delivering new competition to Australia’s fastest-growing communications industry. Other industry observers, however, saw the auctions as consolidating the existing players’ places for at least the next 15 years, the life of the PCS licenses.
It is likely to be still some months before the intentions of successful bidders become clear. Also, it is unlikely that any of the new entrants can, in their own right, challenge the dominance of the incumbents by establishing themselves as a fourth network operator in a market. AAPT has said it will introduce a range of local loop services to complement its fixed network infrastructure. Hutchison has only said it plans to “bring in new wireless services.”
Interestingly, the purchases of AAPT, Hutchison and OzPhone hardly overlap and could provide national network coverage if they were to band together.
Catapult, a U.S.-based test equipment manufacturer, has a small stake, suggesting the company is only looking to establish a test facility here. Only time will reveal whether any deals have been done.
