Posted on 4-Sep-2013 15:29
Filed under: News
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.”