Understanding the 5G Spectrum Auction, Why Optus and Vodafone are winners

Spectrum is not something you’d expect to understand with great ease, its a weird thing because its invisible – so hard to imagine why companies would pay hundreds of millions of dollars for it.

The Government’s Australian Communications and Media Authority (ACMA) have just completed the auction for the 3.6GHz spectrum which is widely and globally recognised as the spot up in the air where the next generation 5G network will operate.

So, without this auction, the Telcos would struggle to do much with 5G.

Interestingly, this is the first time in almost forever that Telstra has not dominated a spectrum Auction. Yes they bought more spectrum than anyone else across all of Australia, but in reality they are on equal footing or behind in Metro areas.

Vodafone won a solid chunk in each capital city (60MHz), while Telstra and Optus didn’t need quite as much.

Telstra secured small amounts in metro areas such as Brisbane and Adelaide to add to their existing spectrum, while in Sydney and Melbourne they bid for and won a solid 60MHz Chunk, giving Telstra 60MHz contiguous in all metro areas.

Optus appear the big loser in the Auction, but in fact they played a longer smarter game here. They purchased a company called VIVID WIRELESS some time ago, and as a result hold large chunks (100MHz) of appropriate spectrum ready for 5G.

So, as the dust settles, for the first time we have three major telcos with large almost even allocations of spectrum.

Optus is best poised to launch first with their existing spectrum, while Telstra and Vodafone need to wait until 2020 or when existing spectrum users vacate.

That won’t stop Telstra launching 5G in 2019 – it will just be limited in its availability to areas that won’t include Sydney and Melbourne.