Telstra has rebuked the govt and regulators around a proposal that would assurance Optus and TPG – but not it – some re-farmed mobile spectrum in a forthcoming auction.
The telco said it is also “very concerned” that its present spectrum holdings in adjacent bands could preclude it from obtaining up as a great deal added spectrum as it desires in upcoming auctions.
Telstra was forced onto the defensive by the govt, which advisable guaranteeing Optus and TPG a slice of 900 MHz spectrum in upcoming auctions for them to continue on to run 3G solutions.
The govt did not assurance Telstra a related slice of spectrum but asked the Australian Opposition and Buyer Commission (ACCC) if there were being “grounds” to do so. [pdf]
There is a rift in between the telcos not only around whether or not spectrum need to be certain in the very first area, but then around the selling price to be paid for it.
Each TPG and Optus say unequivocally that Telstra need to not be certain any 900 MHz spectrum.
Additional, TPG argues it need to get the certain spectrum at the auction’s “starting price”.
Telstra is incensed at that prospect.
“This would be an unprecedented and very aggressive regulatory intervention, essentially distorting the market and completely inconsistent with the proposition market forces need to figure out the optimum-benefit use for spectrum,” Telstra said [pdf]
If TPG and Optus were being handed certain spectrum at decrease charges, Telstra proposed any bids it produced need to receive a related low cost.
“In the party that ‘guaranteed’ spectrum is priced at anything at all fewer than the remaining unit selling price achieved at auction for the pertinent band (excluding any assignment bids), equivalent downwards changes need to be produced to the remaining unit selling price payable by the other thriving bidders in get to area all individuals acquiring spectrum in the auction on a reasonable and even footing – noting that even a slight big difference in selling price/MHz/pop can bring about the selling price payable to vary by hundreds of thousands of dollars,” Telstra said.
But the forthcoming auction – of 850 MHz and 900 MHz spectrum, which could be employed for 4G or 5G solutions – poses an added trouble for Telstra: its potential to get much more spectrum could be constrained by the amount of related spectrum it by now owns.
The ACCC said that Telstra retains forty six percent of sub-one GHz spectrum in metro regions and 54 percent in regional regions.
“TPG also retains a significant amount of lower-band spectrum. By distinction, Optus retains substantially fewer lowband spectrum (only 15 percent of complete lower-band spectrum obtainable) than Telstra and TPG,” the ACCC said.
“Given the substitutability in between the sub-1GHz bands, this would recommend that a crossband limit that applies to in general holdings in the 700 MHz band, 850 MHz band, as well as any spectrum acquired in the upcoming 850/900 MHz allocation would be a acceptable alternative.”
Unsurprisingly, Telstra is against this plan, and Optus and TPG are in favour.
“We are extremely involved that which includes present holdings in any allocation limit established could minimize, alternatively than boost, levels of competition in the downstream mobile market, specially if this sort of limitations are made to minimize asymmetry in between MNO [mobile community operator] holdings,” Telstra said.
“No MNO now retains a spectrum monopoly, and there is practically nothing inherently anti-aggressive about uneven holdings”.
Telstra argued that other telcos were being “spectrum-prosperous, and arguably spectrum inefficient, relative to rivals who could have numerically better holdings”, nevertheless it redacted its proof of this.
Each Optus and TPG raised issues about Telstra’s dominance, and saw limitations in the 850/900 MHz auction as required to addressing historical imbalances in spectrum in between the key telcos.
“The historic imbalances in sub-one GHz spectrum, jointly with considerable subsidies for web page deployment from condition and federal governments, have been key contributors to Telstra’s aggressive edge in regional and distant Australia,” TPG said. [pdf]
“The present holdings of lower-band spectrum are not balanced and there is a threat that absent allocation limitations, lower-band spectrum could be concentrated in the arms of a solitary participant,” Optus added. [pdf]
The ACCC need to supply advice on these difficulties to Communications Minister Paul Fletcher by February 19.