Telecom, Vodafone and 2degrees have all acquired management rights to spectrum in the 700 MHz band in the initial allocation round of the auction.
Telecom and Vodafone have each successfully bid $66 million (plus GST) for 2x15 MHz (three lots), while 2degrees successfully bid for 2x10 MHz (two lots) at a price of $44 million (plus GST).
The outcome leaves one 2x5 MHz block of spectrum unsold. Communications Minister Amy Adams says the Government expects to make a decision about the unsold spectrum block in the coming weeks.
In respect to any unsold spectrum, the auction rules allow the Government to relax the initial 2x15 MHz bidding limit to 2x20 MHz, enabling bidders to compete for the remaining block of spectrum in a supplementary allocation round.
Alternatively, the Government could retain the unsold lot and allocate it at a later date.
“While 2degrees has bid for slightly less spectrum than Telecom and Vodafone, internationally we have seen that 2x10 MHz is sufficient to run a viable 4G network and provide much faster data speeds to mobile customers,” Adams says.
“Examples of 4G mobile networks with 2x10 MHz of comparable spectrum can be found in Australia, the United Kingdom, South Korea, and many European countries.”
Sky Television says it will return to the Crown another 64MHz of low-frequency radio spectrum that it freed up when it shut down its analogue broadcasting service in 2011. The 700 MHz spectrum has been freed up for new uses following the switchover to digital television.
The auction conditions include requirements for mobile network operators to upgrade their existing rural cell sites to 4G capability within five years, and for successful bidders to continue expanding cellular coverage.
These requirements are designed to ensure that at least 90% of New Zealanders have access to a 4G network and faster mobile broadband coverage within five years.
It’s been estimated that 4G can deliver economic benefits for New Zealand of up to $2.4 billion over the next 20 years.