Optus buys spectrum to service data growth
Author: By ARI SHARP
Date: 06/02/2010
Words: 376
Source: AGE
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Publication: The Age
Section: Business
Page: 3
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OPTUS has bought 10 megahertz of mobile spectrum from US technology company Qualcomm and says it intends to use it to cope with the rapid growth in data services.The spectrum will double the amount of airspace the Singapore-owned telco will have in the mobile-friendly 2100MHz band and give it further opportunities to compete with Telstra, the company with the largest market share."The purchase . . . is illustrative of how Optus is building further capacity in its mobile network to meet the explosive growth in demand for data services," said Andrew Buay, the company's managing director of products and delivery.The Australian Competition and Consumer Commission and the Foreign Investment Review Board will need to approve the deal.Optus said it was confident it would win approval, which a company source indicated was likely by the end of March.A market analyst, who did not want to be named, said the purchase would help ease constraints on Optus' mobile network, but there was still more to be done."I thought they probably needed to have some spectrum there," the analyst said. "I think their 3G network's under a lot of pressure, but I don't know if it's just at the spectrum level or also the backhaul level."The company is believed to have paid Qualcomm subsidiary 3G Investments less than $100 million for the spectrum space, which expires in 2017, though it refused to confirm the figure. It was first purchased by Qualcomm for $159 million during a spectrum auction in 2001, when the company intended to launch a mobile service.Optus paid $206 million for its 10MHz of spectrum space in the same auction.Optus noted that the purchase exhausted all available 2100MHz spectrum on the secondary trading market that supports the expansion of mobile broadband services."It is now more important than ever that the government finalise three major spectrum policy decisions which will shape the future of the mobile industry in Australia that is, the allocation of the digital dividend for mobile broadband services; the allocation of 2.5GHz spectrum for mobile broadband services; and greater certainty regarding the cost and timing of the renewal of expiring 3G spectrum licences," Mr Buay said.Optus has 33 per cent mobile market share, according to Southern Cross Equities figures, while Telstra has 42 per cent.
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