Govt announces allocation options for 700 MHz radio spectrum

Communications and Information Technology Minister Amy Adams has announced the two sets of options that will be used for assigning the 700 MHz radio spectrum band between the successful bidders in the Government’s recent auction.

One set of options for assigning which positions (frequencies) within the 700 MHz band each bidder will acquire will be used if the Commerce Commission decides in favour of Telecom’s purchase of 2×20 MHz of the spectrum.

The other set of assignment options will be used if the Commerce Commission decides against the purchase by Telecom on competition grounds.

These assignment options have been announced in order to facilitate the timely deployment of new cellular networks using this spectrum.

The new 4G-LTE networks will be capable of mobile broadband data speeds up to ten times faster than current 3G networks, and the estimated economic gain to New Zealand from using the spectrum in this way is $2.4 billion over the next 20 years. The 700 MHz band is particularly good for rural coverage.

An assignment auction round will be held in the coming weeks, once the Commerce Commission’s decision is known.

2degrees, Telecom, and Vodafone were the only registered bidders in the auction. Each was offered the same opportunity in the initial auction round to buy up to 2×15 MHz at the reserve price of $22 million (+ GST) for each 2×5 MHz paired lot.

In the initial round, Telecom and Vodafone both purchased 2×15 MHz for $66m and 2degrees purchased 2×10 MHz for $44m, leaving 2×5 MHz unsold.

In accordance with the terms of the auction, the remaining 2×5 MHz lot was then auctioned between Telecom and Vodafone, and was secured by Telecom for $83 million, subject to Commerce Commission clearance.

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