The Australian government has banned Telstra, Australia’s dominant telecommunications provider, from bidding on 165 megahertz of spectrum in the 3.4 GHz auction in September, citing Telstra’s existing foothold in the delivery of high-speed wireless voice and data services.
“Telstra has a number of existing and proposed technologies capable of delivering high-speed Internet and traditional voice services to consumers, and therefore Telstra has been excluded from bidding for 3.4 GHz spectrum in major metropolitan centers,” said Senator Richard Alston, the Minister for Communications, Information Technology and the Arts.
Alston went on to say the competition limits were designed to ensure that no one player dominates the 3.4 GHz band, especially in the provision of wireless local loop services.
An unnamed representative from Telstra told The Sydney Morning Herald that limiting Telstra to networks in small areas will not give the company adequate return on its investments.
“Telstra is the biggest investor in telecommunications services. We are almost the only ones that are investing in regional Australia, and yet the government is preventing us from investing further funds in the bush,” the spokesman said.
According to the Herald, only pay television and Internet group Austar has expressed interest in the 3.4 GHz band. Cable & Wireless Optus is not expected to bid, and AAPT’s interest is marginal.
And although the government is selling off the spectrum in hopes of underwriting its $1.65 billion budget surplus in fiscal 2000-2001, the auction is only expected to raise about $59 million.
“By excluding Telstra, that’s one less bidder and that means there will be less funds raised from the sale, which is not good for taxpayers,” the Telstra spokesman said.
A total of 100 megahertz-off-limits to Telstra-will be available across 14 metropolitan areas and main towns, with the balance available in five regional areas. Telstra will be allowed to bid for a total of 44 megahertz of spectrum in regional areas, and all other bidders will be restricted to 67.5 megahertz in major metropolitan areas, with no limit in regional areas. Spectrum will be sold in lots of 3.5 and 4.5 megahertz.
“Bidders may bid on any lot or combination of lots subject to bidding limits. The auction will be conducted over a number of rounds through electronic bidding over the Internet, with the results of each round being made available to all bidders,” ACA Chairman Bob Horton said. Auction applications close Aug. 18.
Global Wireless reporter Paul Best contributed to this report.
