Optus hits back at Telstra over spectrum bids

Singtel Optus has hit back at suggestions that limits to Telstra’s ability to buy radio wave spectrum would hurt regional communities, arguing any loosening of proposed restrictions would reduce competition and affect its own ability to meet the needs of customers.

The telco’s chief executive, Kelly Bayer Rosmarin, said the auction for “low-band spectrum” was about ensuring competitive prices and better mobile coverage in Australia, while Optus’ vice president of regulatory and public affairs, Andrew Sheridan, said changes to limits would affect its ability to deliver voice and data services in regional areas.

Optus boss Kelly Bayer Rosmarin said the upcoming spectrum auction is about ensuring a level playing field.Credit: Dominic Lorrimer

“The current proposed auction rules ensure that all mobile operators have the opportunity to purchase enough spectrum to meet their current and future needs,” Ms Bayer Rosmarin said. “This is not about excluding any party from participating in the auction process, it is about including the opportunity for competition and choice in regional areas which benefits all customers.”

Optus’ war of words was sparked by comments made by Telstra chief executive Andy Penn about proposed limits on the amount of spectrum that could be bid for at an upcoming auction.

Mr Penn wants the federal government to rethink limits proposed by the Australian Competition and Consumer Commission (ACCC) that restrict how much spectrum Telstra can bid for.

Under the proposal, Telstra will be limited in how much low-band spectrum it can buy. At the same time, it will be required to give up a portion of spectrum it occupies through a separate licence so that it can be sold off for a long-term period. Low-band spectrum is used to carry mobile data over vast distances and is crucial in regional and rural areas. Mr Penn said this process would mean a reduction in total spectrum holdings which would then affect the quality of services in rural areas.

Auction limits are standard practice, as they ensure competition between telco rivals. While Telstra is urging the government to allow it to bid for about 43 per cent of the spectrum on offer, Optus wants it to be restricted further. Mr Sheridan said Telstra’s comments were about ensuring it maintained a dominant position in regional Australia.

“If we don’t have a limit in this auction, then the risk is we won’t be able to get more spectrum,” Mr Sheridan said. “Because we have so little of this low band spectrum, we won’t be able to meet our existing customer needs as they grow. We’re not talking about 5G here - we’re talking about voice services, and data services across the regional towns of Australia.”

Optus is one of Telstra’s regional competitors and also provides wholesale network access to Aussie Broadband, Vocus and some TPG customers.

“When Telstra says that regional customers are going to be at risk, it’s not their regional customers,” Mr Sheridan said. “It’s the regional customers on our network and those other networks.

“This is the most important decision [Communications Minister] Paul Fletcher will make for the future of mobile competition in Australia.” Mr Fletcher is expected to make a decision on the limits in the next few weeks.

Telcos have already spent more than $600 million on spectrum needed to build 5G networks and improve mobile and internet speeds earlier this year. The auction, which is for the 850MHz/900MHz bands, will occur around November.

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