The 700 MHz spectrum auction announced today appears to have been somewhat of a clayton’s auction as everyone has paid the same minimum price, leaving Vodafone and Telecom with the lion’s share of the auctioned spectrum and 2 Degrees as the lesser player in this critical market.Well that’s politics. The next part is interesting:
Despite the concession of ‘pay as you use’ spectrum, 2degrees is clearly struggling to keep up.It sure looks as if 2degrees is playing catch up. Apparently the company has more mobile customers than Telecom NZ, but on average they each spend less than the people with accounts on the other two networks. The real problem is that running a mobile network means continually going back to invest in more kit while customers continually expect prices to fall.
If New Zealand is to have a genuinely competitive mobile market then what happens to the unsold spectrum will determine competitive prices for Kiwis in the years ahead.So, we’ve identified the problem, what are the options. Curran neatly summarises the obvious three approaches before throwing some new and potentially exciting into the mix:
The Minister has three choices: she can either announce a follow up auction of the unsold spectrum to the highest bidder; put the unsold spectrum on the shelf and not sell it; or keep it as strategic competitive reserve to stimulate competitive activity in the market, such as an incentive to a fourth entrant and for rural purposes only.Now that’s an original idea. Would 5 MHz paired be enough for an interesting rural play? I don’t know, but it’s good to see fresh thinking.