Telstra hands over $1.3 billion for 4G spectrum

Telstra has announced it has secured 700 MHz and 2.5 GHz licences, in spectrum space originally used for analogue television, in an Australian Communications and Media Authority auction for a bid price of $1.302 billion.

The licences are set to commence as analogue television services are decommissioned, with the 2.5 GHz band licence active on October 2014 (except in Perth metro and regional Western Australia, which commences on February 2016) and in January 2015 for the 700 MHz band.

Both licences are valid for 15 years.

“This additional spectrum represents a major investment in the future of telecommunications in Australia and means we can continue to deliver a superior mobile experience for our customers,” Telstra chief executive David Thodey says.

Thodey claims the 2.5 GHz spectrum will help it to improve its 4G service capacity in high density areas, while low-frequency 700 MHz bandwidth has the advantage of travelling long distances in rural and regional areas.

“The low-frequency nature of 700MHz means the mobile signal can travel relatively longer distances, which is ideal for improving the services we can offer to customers in rural and regional areas. It also means better in-building coverage in metro and suburban areas,” Thodey says.

“Together with ongoing investment in our wireless network, which will total $1.2 billion in 2012-13 financial year, and the application of next generation LTE-Advanced 4G technology that we announced earlier this year, the additional spectrum will help ensure we continue to deliver Australia’s leading mobile network for our customers.”

Telstra recently announced it has added 600,000 new devices to its 4G mobile network since announcing its half-yearly profit in February, with the total growing 1.5 million to 2.1 million devices in less than a quarter.

The total includes 1.4 million handsets and 150,000 tablets, with the company counting each device as a “customer”.

“We have continued revenue, profit and customer growth. Our strategic focus remains unchanged, and, most importantly, we are on track for full-year guidance,” Telstra’s chief financial officer Mark Hall said at the time.

The new licences were granted after Telstra issued $1.3 billion in euro-denominated bonds on March 7.