Optus acquires 900 MHz spectrum in Australia

Acquisition will help Optus deliver a significant uplift of 5G coverage nation-wide

Optus has purchased 12 of the 16 lots of spectrum in the 850Mhz and 900Mhz bands for a total cost of AU$1.48 billion, the Australian Communications and Media Authority (ACMA) announced on Wednesday.

Optus CEO, Kelly Bayer Rosmarin, said:

“The auction result is a  fantastic outcome for Australian consumers and businesses. Optus is building the network of the future for our customers and 900 MHz spectrum is its foundational layer. With this additional spectrum, and our existing mid and high band spectrum, we can continue to deliver great coverage and bring the benefits of our technology leadership to more Australians.

“We applaud the Government for prioritising competition and consumer interests in ensuring a competitive auction process that has also delivered more equitable holdings of this critical low band spectrum.”

The 900 MHz spectrum, known as low band, carries mobile signals further than higher bands, so fewer base stations are needed to service a broad area. It is critical to providing wide signal coverage for 4G and 5G technology.

This is particularly important in regional areas as it lowers the infrastructure investment required to service customers over a wide area. It also provides superior in-building coverage as it can penetrate deeper than mid and high band spectrum.

The acquisition will help Optus deliver a significant uplift of 5G coverage nation-wide, in addition to its fastest 5G network as recognised by independent benchmarks. 

“We are steadily advancing the rollout of Australia’s fastest 5G, and combining it with value and innovation, like our suite of Living Networks features. This spectrum means we can offer a significant uplift of 5G coverage nation-wide, to even more Australians,” said Lambo Kanagaratnam, Optus Vice President Networks.

“Optus aims to power optimism with options, and options have just become a whole lot better for Australians,”

Telstra and TPG

When Optus had its 10Mhz of spectrum set aside, TPG also had the same amount set aside, but the latter telco failed to take it up.

“Our recent merger brought together the spectrum held by the former VHA and TPG entities. As a result, TPG Telecom has strong low-band spectrum holdings that are already deployed in our 4G and 5G networks,” TPG Telecom CEO Iñaki Berroeta said.

“Given our existing low-band spectrum, TPG Telecom determined it was not in the best interests of our customers or shareholders to acquire more low-band spectrum at this auction.”

Due to the limits imposed upon it restricting telcos to holding 40% of spectrum under 1GHz, Telstra was only able to pick up two lots of 10Mhz in the 850MHz band for almost AU$616 million.

“With the 2x10MHz of 850MHz spectrum we’ve secured in this auction, added to our existing spectrum holdings, we now hold 2x40MHz of low-band spectrum in the major cities and 2x45MHz in regional and remote areas,” Telstra CFO Vicky Brady said.

“This is more than any other carrier, which is important given our larger customer base, and will help us continue to provide the best mobile coverage and service.

“Over the seven years to end FY22, we will have invested AU$11 billion in our mobile network nationally with AU$4 billion of this invested in our regional mobile network. Because of this our mobile network now covers one million square kilometres more than any other telco — that’s the size of New South Wales and Victoria combined.”