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Spectrum auction closes shy of $AU2 billion

Telstra, TPG, Optus buy spectrum, skip the red undies

Australia's communications minister Senator Stephen Conroy has failed to stretch his “red undies” over the government's budget deficit: the spectrum auction, for which the results have just been announced, yielded a little under $AU2 billion.

Last year, the Senator was criticised for setting an “unrealistic” floor price of $1.36 per Megahertz per population for the 700 MHz chunk of spectrum, a move that would – had all of the spectrum sold – yielded around $AU3 billion in the auction.

He was criticised even more strongly his famous remark: “If I say to you, everyone in this room, that if you want to bid next week in our spectrum auction, you had better wear red underpants on your head, I have got news for you: you'll be wearing them on your head. I have unfettered legal power.”

The Australian Communications and Media Authority has announced the results here.

Only Telstra and Optus bid for the 700 MHz spectrum. The incumbent has secured two chunks of spectrum in that band of 20 MHz each: 713 – 733 MHz and 768 – 788 MHz. Optus has taken two 10 MHz chunks, 703 - 713 MHz and 758 – 768 MHz.

In the 2.5 GHz band, Optus has taken two 20 MHz allocations (2550 – 2570 MHz and 2670 – 2690 MHz), Telstra has taken two 40 MHz allocations (2510 – 2550 MHz and 2630 – 2670 MHz), while dark-horse bidder TPG has taken two 10 MHz allocations (2500 – 2510 MHz and 2620 – 2630 MHz).

There remains 30 MHz unsold in the 700 MHz band.

As the dominant bidder, Telstra will be forking over a little over $AU1.3 billion; Optus' bids totalled nearly $AU650 million, while TPG will be signing a cheque for $13.5 million. ®

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