European LTE auctions line up
Austria, Norway and Slovenia lay plans to sell frequencies in 800MHz plus additional spectrum in former 2G and 3G bands
Published: 19 March, 2013
European spectrum auctions are coming thick and fast in 2013, and the latest to be lined up are in Austria, Norway and Slovenia.
Austria is holding its largest ever auction of radio frequencies, scheduled for September this year and offering a total of 28 blocks in the 800MHz, 900MHz and 1.8GHz bands. The first of these is the digital dividend band, while the others have traditionally been GSM frequencies but are increasingly being used for 3G and 4G. At the reserve prices, the sale would generate about €526m ($680m).
The sale was originally scheduled to take place last year, but was delayed until the conclusion of Hutchison 3's takeover of Orange Austria, which finally ended in January 2013. The regulator, TKK, has opted for a complex auction mechanism, CCA (combinatorial clock auction). This includes supplementary rounds where bidders bid on indivisible packages of spectrum, while prices are determined by a 'second price rule' - based on competitors' bids rather than necessarily on a winner's own bid. Similar procedures have been used in multiband auctions in other countries, including the recent UK sale, plus those in The Netherlands, Switzerland, Denmark, Ireland, Canada and Australia, as well as Austria's own 2.6GHz sale.
However, critics are complaining - as they did in the UK - that the mechanism is unnecessarily complicated and Reuters reports that T-Mobile Austria has hired a game theoretician to help it prepare its bidding strategy during the six months before the auction takes place. TKK justified its choice, saying in a statement: "Since the multiband auction is the largest allocation of frequencies that has ever taken place in Austria, companies must develop a variety of scenarios, in order to calculate the economic value of the spectrum for their companies to provide their expert teams and their strategy for the auction."
Two blocks in the 800MHz band will be reserved for a new entrant and the reserve price for this spectrum will be €45.6m. TKK has put together a 'newcomer package' allowing that 800MHz spectrum to be combined with 2.6GHz frequencies, with the ability to enable national roaming.
Over in Norway, the Ministry of Transport and Communications (MoTC) has set out its objectives for the upcoming 800MHz auction. It expects the build-out of the digital dividend band, which supports cost effective rural coverage with its long range, to ensure that 100% of the country's households have access to broadband in the near future at "basic good quality" To achieve this, winners of the 800MHz licences will be required to provide coverage to 98% of the population within five years at downlink of at least 2Mbps. The state will also spend at least NOK150m ($26.8m) on the development of broadband in areas which currently have no coverage.
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