Spectrum auction brings in $136m

The first half of the 2GHz spectrum auction has finally finished, with a total of $136,435,740 bids being received.

The first half of the 2GHz spectrum auction has finally finished, with a total of $136,435,740 bids being received.

Part two of the auction, for the second generation licences, is expected to resume on January 25. The auction was split into two halves when it resumed after Christmas.

Telecom was the big spender in the auction — spending just over $37 million, with nearly $17 million going on third generation (3G) spectrum.

Late starter Clear bought $25 million after initially staying out of the auction. The arrival of new CEO Peter Kaliaropoulos sparked the company’s involvement in the auction. Telstra Saturn and Vodafone both spent over $20 million.

Competition in the 3G side of the auction was fierce after a slow start. In the end, Telecom and Telstra Saturn both finished with 15 MHz of 3G spectrum each. Vodafone and Clear bought 10 MHz each. The fourth block of 3G spectrum has been set aside for a pan-Maori trust set up by government. It will pay 95% of the average price paid for the other 3G blocks.

The management rights run for 20 years but the government has decided not to impose a “use it or lose it” clause so there is no requirement on any of the successful bidders to use the spectrum at all.

The auction itself has been marred by accusations of poor decision making on the part of the auction managers. Bidders happily withdrew bids after posting them, causing the auction to fluctuate wildly, sometimes by up to 30% of its total value. Rule changes designed to speed up the auction were introduced on more than one occasion as bidders resorted to tactics like over-bidding themselves to keep the auction alive. Bidders now have three working days to make a statutory declaration of their eligibility to buy spectrum. A full list of successful bidders is available at: auction.med.govt.nz.

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