Carriers sign up to spectrum sale

MAJOR Australian mobile carriers are throwing their hats into the ring for the upcoming spectrum auction, despite threatening to boycott last year after the federal government announced a higher than expected reserve price for the sale that is expected to net billions of dollars for Canberra.

Optus and Vodafone, the nation's second and third largest carriers, last year said the reserve price for the spectrum that underpins mobile networks was too high and they threatened to pull out of the auction late last year.

However, all three carriers on Wednesday confirmed they would formally lodge their applications before registration closes at midnight on Thursday, but they declined to reveal further details about their bids.

A Telstra spokesperson said: "We intend to lodge an application to participate in the upcoming spectrum auction." It is widely speculated that cashed-up Telstra will bid for both 720 Mhz, used in the high-speed 4G network, and 2.5 Ghz, used in wireless broadband.

Optus declined to comment officially but its chief executive, Kevin Russell, has previously said the telco would partake in the formal process as well as looking at alternatives, such as building more base stations and sharing sites with Vodafone.

Vodafone, which has struggled with network problems, reaffirmed on Wednesday that while it may purchase spectrum at 2.5 GHz, it would not bid in the prized 720 Mhz spectrum auction.

"Our focus remains investing in our network so our customers can benefit today and we are very well positioned in spectrum assets for the future," Vodafone spokeswoman Karina Keisler said.

The Communications Minister, Stephen Conroy, said last year the spectrum was a premium public asset. "This spectrum is seen as the 'waterfront property' of spectrum and the government has made a significant investment to free it up. It is important that we get a reasonable return on this valuable public asset."

However, industry analysts and telco operators said the spectrum was expensive by international standards and this would impact on the capital investments of operators.

"The high auction costs [combined with renewal fees on existing spectrum that they have already agreed to] will erode operators' return on investment," said Nicole McCormick, a senior analyst from Ovum. "All things being equal, this will slow down investment in new technology."