Optus buys only four lots of mobile spectrum, with its investment overshadowed by rivals
As it reels from its nationwide outage, Optus has bought only $33.5m worth of spectrum, compared with Telstra’s $545.6m worth of purchases.
Optus has bought the least amount of ‘mid band’ spectrum out of the top three telcos in the commonwealth’s latest auction as it reels from its nationwide outage earlier this month which cut off more than 10 million Australians.
The Singapore-owned telco bought four lots of spectrum in northern NSW and southern Queensland for $33.5m.
Bigger rival Telstra snapped up 326 lots for $545.6m and Australia’s third largest telco TPG Telecom bought 44 lots for $128.2m.
But Optus still has plenty of spectrum after it secured a huge slice of the 2.3GHz frequency when its took over Vividwireless from Seven Group in a $230m deal in early 2012. This gave it an extra 98MHz. In the 3.6GHz, or mid band range, it already holds 35MHz.
Nerida O’Loughlin — chair of the Australian Communications and Media Authority, which ran the auction — said the allocation or mid band spectrum was important for the deployment of 5G services.
“The allocation of this spectrum will support digital connectivity, promote competition and facilitate investment in new services for Australian consumers and businesses across metropolitan and regional areas of Australia,” she said.
It comes as Optus is searching for a new chief executive after Kelly Bayer Rosmarin resigned on Monday after appearing at a bruising Senate inquiry last week into the outage, which left more than 200 Australians not able to dial triple-0.
Although its latest spectrum investment smaller than its rivals, an Optus spokeswoman said it was strategic and would provide “better 5G network experience in the fastest growing areas of regional north NSW and south Qld”.
“With the 2032 Brisbane Olympics fast approaching, the new licences cover key tourist destination regions including the Gold Coast, Noosa, Bundaberg, Hervey Bay, Maryborough, Toowoomba, Tweed Heads, Byron Bay, Coffs Harbour (and) Tamworth,” the spokeswoman said.
“These new spectrum licences add to Optus’ existing 35MHz holdings of 3.6GHz spectrum in this area and will enable Optus to offer improved 5G services to customers across the fastest growing areas of Australia.”
The spokeswoman added: “Optus did not acquire spectrum in other areas due to our significant existing metropolitan holdings in 3.4GHz and our other significant mid-band spectrum holdings in regional and rural areas”.
Telstra chief executive Vicki Brady said the more spectrum a telco acquires the better the customer experience. She said Telstra’s $545.6m investment in the latest auction would “differentiate ourselves in a competitive market”. Telstra already operates Australia’s biggest 5G network.
“5G has completely changed how we use mobile devices and we continue to see customers’ demand for data growing. Adding this mid-band spectrum to our network means our customers will get an even better and more consistent mobile experience through more capacity to carry data,” Ms Brady said.
“This investment moves our mobile leadership forward and enables Telstra to continue to pioneer future capabilities and generations of mobile technology for Australia. Alongside our existing spectrum holdings, the additional 55 to 110MHz means we’ll continue to differentiate ourselves in a competitive market.
“It’s particularly pleasing that we’ve also secured a significant amount of spectrum covering large parts of regional Australia. This will mean that even more customers in more places will enjoy our world-leading 5G network.”
The new licences will last 20 years in the 3.7 GHz band and seven years in the 3.4 GHz band. Telstra expects to gain access to the new 3.4 GHz spectrum almost immediately and the 3.7GHz spectrum in early 2024, with customers set to benefit as the spectrum is progressively deployed into the network.
Ms Brady said payments to the ACMA due this financial year are excluded from Telstra’s FY24 guidance on free cashflow after lease payments of $2.8bn to $3.2bn.
TPG Telecom chief executive officer Inaki Berroeta said “spectrum is a critical asset” and the company’s $128m investment in the latest auction would “meet our customers’ growing needs for high-speed 5G services today and into the future”.
“Once deployed, this spectrum will deliver a huge capacity boost for our 5G mobile and fixed wireless services, providing greater speeds and better performance for new and existing consumer and business customers,” Mr Berroeta said.
He said the acquisition of the spectrum licences will be funded through TPG Telecom’s existing debt facilities. TPG Telecom’s mobile network, also known as the Vodafone mobile network, provides services to Vodafone, TPG, iiNet, Lebara, felix and Kogan mobile customers.
Mr Berroeta said to date the company has rolled out more than 2,800 5G sites, with its mobile network covering more than 96 per cent of the Australian population across the nation’s 10 largest cities.
Overall, the government-owned NBN Co bought the least amount of spectrum, winning 200 lots for $14.4m.
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