Reseller News

Telecom cleared to acquire final lot in 700MHz radio spectrum

ComCom has granted clearance to Telecom on the basis that competition would not be any greater if another mobile network operator was to buy the final block.

The Commerce Commission (ComCom) has granted clearance for Telecom to acquire the management rights to the final block of 5MHz radio spectrum in the 700MHz range.

Acquisition of the final block will give Telecom a total of 20MHz, following its acquisition of 15MHz in the first round of the auction in October last year. Vodafone will hold 15MHz and 2Degrees 10MHz of the spectrum.

Telecom had won the second round of the auction over Vodafone in January this year, pending clearance from ComCom.

Commerce Commission Chairman Dr Mark Berry said the proposed placement of the unsold block in a position that is not adjacent to 2degrees’ other spectrum holdings, was key to the Commission clearing Telecom’s acquisition.

“Current technology is unable to fully utilise non-adjacent blocks. Given the blocks are non-adjacent, it reduced the prospect of the Crown and 2degrees reaching an agreement on a sale. Even if 2degrees was to acquire the 5MHz block, 2degrees’ competitiveness in this space is not likely to be materially enhanced since the block is not adjacent,” said Berry.

“Based on the proposed placement of the unsold 5MHz block, the Commission considers it unlikely that competition would be any greater if another mobile network operator bought the final block instead of Telecom, so we have cleared the purchase,” he added.

The management rights to the radio spectrum was freed up by the switchover to digital television. Spectrum in the 700 MHz band is to be used in the development of 4G mobile networks.

The auction comprised nine blocks of 5 MHz paired spectrum in the 700 MHz band. At the start of the auction, each bidder was limited to acquiring up to 15 MHz of spectrum. In the first round of the auction, Telecom and Vodafone both bid for 15 MHz, while 2degrees bid for 10 MHz.

The Crown subsequently decided to increase the acquisition limit to 20 MHz and sell the final 5 MHz block in a further phase of the auction.

Telecom and Vodafone both bid for this final block, with Telecom ultimately being the winning bidder.