Little financial reprieve for Australia’s mobile operators

Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy unveiled the auction terms on Thursday and renewal terms on Friday for the renewal of mobile phone spectrum to providers including Telstra, Optus and Vodafone.

Conroy said the limits have been set to provide certainty to industry and consumers and ensure an appropriate financial return to taxpayers.

Comments Nicole McCormick, Ovum Senior Analyst Telco Strategy:

“The government has reduced 800 MHz spectrum renewal costs for Telstra and Vodafone, but with the industry having to find an estimated more than $3 billion, collectively, for mobile relicensing, the government’s agenda is clear: maximise revenue from renewals and spectrum auctions.

“Cash flow-rich operators will not be so perturbed by the cash calls, others may not be so happy.Æ

Vodafone, which faces the largest spectrum renewal bill of around $1.5 billion, will likely have to call on its global parents, Vodafone Group and Hutchison Whampoa, to assist with financing.

Telstra said it will fund its bill, estimated at around $1.2 billion, through debt.