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Topic # 129129 4-Sep-2013 15:24 One person supports this post Send private message

Communications and Information Technology Minister Amy Adams has today announced the timing, reserve price, and implementation conditions for the upcoming auction of the digital dividend radio spectrum.

The allocation of the 700 MHz band of spectrum will allow the building of fourth generation (4G) mobile networks using the spectrum freed up by the switchover to digital television.

The auction is scheduled to start on 29 October 2013.  The start date will be confirmed after completion of the bidder registration process.

The reserve price for each of the nine lots of 5 MHz paired has been set at $22 million.

The Government has spent $157 million clearing the 700 MHz band to allow the spectrum to be used for 4G mobile networks.

“In setting the reserve price, we have balanced generating a fair return on the sale of the spectrum rights with the significant investment required by mobile network operators to build the 4G network infrastructure,” Ms Adams says.

“The reserve price also takes into account the value to New Zealand of having 4G connectivity widely deployed.”

The auction terms will provide a deferred payment option for successful bidders over five years, subject to payment of a commercial interest rate.

“Allowing staged payment will enable mobile network operators to invest immediately in building their 4G networks to increase their service to New Zealanders.”

The auction conditions also include requirements for mobile network operators to upgrade their existing rural cell sites to 4G capability within five years, and for successful bidders to continue expanding cellular coverage.

“These requirements are designed to ensure that at least 90 per cent of New Zealanders have access to a 4G network and faster mobile broadband coverage within five years.

“The use of mobile broadband services is growing at an enormous rate in New Zealand. Fast, reliable access to mobile broadband is enabling improvements in productivity and ease of business, and providing new applications for consumers.

“Indications are that by using the spectrum for 4G mobile networks, we can expect economic benefits for New Zealand of up to $2.4 billion over the next twenty years.”

Further auction information:

Management rights for nine lots of 2x5 MHz in the 700 MHz range will be auctioned.  The management rights will begin on 1 January 2014 and last for 18 years. 

Bidders will initially be limited to acquiring a maximum of three lots each.  If some lots remain unsold after the initial auction round closes, the limit may be increased to four.

Successful bidders who acquire three or more lots will be required to build a number of new cell sites in areas that do not currently have any mobile coverage. 

Bidders who acquire three lots must build at least five new cell sites each year, for five years.  For any bidders who win four lots, the requirement increases to ten new cell sites each year for five years.

The Government also wishes to ensure new or non-cellular operators are able to participate.  For the 700 MHz auction, different implementation conditions have been set for successful bidders without an existing mobile network. 

These bidders will have five years to deploy services to at least 50 per cent of New Zealanders.

To ensure that rural communities also benefit from the new technology, existing cellular operators buying the 700 MHz spectrum will be required to upgrade at least 75 per cent of their existing rural 2G and 3G cell sites to 4G capability using the 700 MHz spectrum within five years, up to a maximum of 300 cell sites. 

Bidders choosing to pay in instalments will be required to pay a commercial interest rate and provide appropriate security.

The Ministry of Business Innovation and Employment will be running the auction.  It will provide further details for prospective bidders shortly.

Bidders will be required to register and provide a deposit before the auction.  The bidder registration is likely to open on 11 September 2013.





This profile has been set up by MBIE's Radio Spectrum Policy & Planning team. For any specific questions, please contact us on 0508 RSM INFO or visit us at www.rsm.govt.nz


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Ultimate Geek
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  Reply # 889754 4-Sep-2013 15:44 Send private message

Looks quite sensible to me.

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  Reply # 889782 4-Sep-2013 16:28 Send private message

Great really, we all gotta pay for a new Freeview TV (or receiver) and the government then sells off this part of the radio spectrum for a nice chunk of change.

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  Reply # 889793 4-Sep-2013 16:48 Send private message

Lets hope the issues with 4G in the UK dont happen here, in the UK the 800MHz 4G services caused issues for UHF DVB-T services, in NZ we will have DVB-T services in the same band sector as the UK but with 100MHz less seperation to 4G.

http://www.dailymail.co.uk/news/article-2231351/Homes-robbed-TV-signal-new-4G-mobile-network-10-000-reconnected.html


http://www.dailymail.co.uk/sciencetech/article-2306857/Hundreds-thousands-lose-TV-signal-thanks-4G-testing.html


http://advanced-television.com/2012/11/26/700000-italian-dtt-homes-face-4g-interference/


Cyril

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  Reply # 889810 4-Sep-2013 16:53 3 people support this post Send private message

DarthKermit: Great really, we all gotta pay for a new Freeview TV (or receiver) and the government then sells off this part of the radio spectrum for a nice chunk of change.



I find your comment really whiny, but I'm struggling to articulate why exactly.

I see the freeing up of spectrum for future technologies good - I think the move to digital TV is good too.

I don't have a problem with the government controlling (and selling) access to spectrum, given the potential ongoing costs of policing and controlling it.

Given noone is forcing you to watch TV, what is your major issue here?

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  Reply # 889821 4-Sep-2013 17:18 Send private message

Looking forward to some analysis comparing this to past spectrum auctions, as well as other countries.

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  Reply # 889846 4-Sep-2013 18:17 Send private message

 
DarthKermit: Great really, we all gotta pay for a new Freeview TV (or receiver) and the government then sells off this part of the radio spectrum for a nice chunk of change.


Restacking of DTV services to move them out of the 700 MHz band was undertaken last year so no new Freeview / Igloo box required. DSO clears out the last of the analogue services in the coming weeks and months 

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  Reply # 889848 4-Sep-2013 18:26 Send private message

cyril7: Lets hope the issues with 4G in the UK dont happen here, in the UK the 800MHz 4G services caused issues for UHF DVB-T services, in NZ we will have DVB-T services in the same band sector as the UK but with 100MHz less seperation to 4G.

http://www.dailymail.co.uk/news/article-2231351/Homes-robbed-TV-signal-new-4G-mobile-network-10-000-reconnected.html


http://www.dailymail.co.uk/sciencetech/article-2306857/Hundreds-thousands-lose-TV-signal-thanks-4G-testing.html


http://advanced-television.com/2012/11/26/700000-italian-dtt-homes-face-4g-interference/


Cyril


I know we've discussed this before but the studies and realities are a lot less that the Daily Mail makes out.
The register notes the current AT800 situation in the UK. The management rights for NZ along with the 3GPP standards (for LTE specs) set out the rules for services.  

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  Reply # 889873 4-Sep-2013 19:40 Send private message

Hi Pete, thanks for the register link clearly indicates the problem less than the dailymail portrayed, but still, until the fat lady sings we cannot be sure how it pans out in NZ.

Cheers
Cyril

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  Reply # 889877 4-Sep-2013 19:42 Send private message

cyril7: Lets hope the issues with 4G in the UK dont happen here, in the UK the 800MHz 4G services caused issues for UHF DVB-T services, in NZ we will have DVB-T services in the same band sector as the UK but with 100MHz less seperation to 4G.

http://www.dailymail.co.uk/news/article-2231351/Homes-robbed-TV-signal-new-4G-mobile-network-10-000-reconnected.html


http://www.dailymail.co.uk/sciencetech/article-2306857/Hundreds-thousands-lose-TV-signal-thanks-4G-testing.html


http://advanced-television.com/2012/11/26/700000-italian-dtt-homes-face-4g-interference/


Cyril


The bigger issue is all the dodgy VHF/UHF TV amplifiers out there bleeding RF noise into the UHF band. It's going to seriously screw with a super sensitive MHA sitting on a cellsite 30m up in the air..


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Reply # 889959 4-Sep-2013 21:55 Send private message

One of the ironies in the UK of the AT800 funding model is that is it paid for by the cell co's. If the uptake rate continues on the same tangent, the cell co's will get a significant chunk of their cash back. Not that Vodafone will need it in the next year or 3 with the Verizon deal.

I was over the in UK recently and they are heavily advertising it in print media. They have to be seen to be doing things, as well as mailing out 10,000's of filters across areas where 4G services progressively launch. If the UK go for a second digital dividend in a similar band to us (as the Africans seem to be taking the Europeans down that path), then they will have to revisit it all again in 6ish years time with another restacking, another mitigation program and migration to DVB-2 / MPEG 4 services or what ever is on offer by that point

 

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  Reply # 889966 4-Sep-2013 22:11 Send private message

Read between the lines of this Telecom press release:


Telecom welcomes Government’s 700 MHz radio spectrum auction details

Minister for Communications and Information Technology Amy Adams announced today the timing, reserve price and some implementation conditions for the auction of New Zealand’s 700MHz “digital dividend” spectrum.

The auction is scheduled to start on 29 October 2013. This date will be confirmed after completion of the bidder registration process. The reserve price for each of the nine lots of 2x5MHz paired spectrum has been set at NZ$22million.

Telecom welcomes the allocation of this spectrum and intends to be a bidder in the forthcoming auction. Telecom also welcomes the Government’s acknowledgement of the significant investment required by mobile network operators to build the 4G LTE infrastructure required to utilise this spectrum.

The 700MHz band is an important resource if New Zealand is to make the most of 4G LTE technology, which will deliver significant benefits to New Zealanders in the shape of faster mobile broadband speeds and significant long-term economic benefit to the country. In particular, Telecom’s ongoing and historically strong commitment to rural New Zealand will be strengthened through the use of the 700 MHz spectrum, as it enables better economics of coverage in less populous areas.

Although management rights for the spectrum will begin on 1 January 2014, deployment of this spectrum into Telecom’s 4G LTE network will depend on 700MHz handset availability from global handset manufacturers. Current indications are that suitable devices will start becoming available in mid to late calendar 2014 at the earliest.






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  Reply # 890089 5-Sep-2013 08:49 2 people support this post Send private message

Wait for the obligatory treaty claim to come along and screw up this auction..




Regards,

Old3eyes

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  Reply # 890155 5-Sep-2013 10:31 Send private message

If I'm reading correctly, there are 9 blocks and they are limited to 3 each unless a block doesn't sell.

This means that if only our 3 current providers bid (likely?) then each only has to pay the reserve price and the auction is basically deadlocked?

This quote from the 2degrees on stuff seems unrealistic:
http://www.stuff.co.nz/business/industries/9128505/Govt-denies-bargain-basement-spectrum
2degrees intimated the reserve price was higher than it had hoped for, but IDC analyst Glen Saunders said it should allow 2degrees to bid for a 20MHz block of the spectrum - the minimum amount the Business, Innovation and Employment Ministry had said was desirable for a viable 4G network - and perhaps put its hand up for a one third (30MHz) share.

It seems the reserve couldn't be any lower. 20mhz it's simply not going to happen. 30mhz is even more unrealistic. It looks like this auction was designed to give an even split of 15mhz each unless a fourth disrupting competitor enters the ring.

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  Reply # 890171 5-Sep-2013 10:45 Send private message

I think it is quite good. Having a maximum of 3 x 5MHz blocks means that each of the major players is likely to get 15 MHz. If it were any higher, the party with the deepest pockets (likely Vodafone) would have probably got 20 MHz and 2Degrees might have only been left with 5 or 10 MHz.

Also the way it is structured there shouldn't be an extreme bidding war, but the govt will get a reasonable amount of $ because of the reserve price. Hopefully this means that the operators have $ available for network deployment, and us consumers have 3 competing networks to choose from, each with a reasonable amount of spectrum (but not as much as any of them would have wanted)

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  Reply # 890173 5-Sep-2013 10:46 Send private message

I think the IDC analyst has twisted his words in a poor way - the 20 MHz for 2degrees to run a realistic 4G service, should read something more like... 2 x 5MHz paired blocks eg 20 MHz in total.
The auction limits are for 3 blocks per bidder ie 30 MHz in total and if there are unsold blocks after round 1, then action limits are relaxed to 4 blocks per bidder ie 40 MHz in total (or a 20 MHz carrier)

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