Government opts for short-term 5G spectrum auction

Two year spectrum licences to get carriers started

March will see an auction for 16 5G spectrum blocks in the 3.5GHz band. Spectrum auctions are usually for 20-year licences. In this round the licences on sale will only be for two years. The short licence term buys the government time to reach a settlement with iwi over an outstanding Treat of Waitangi claim.

Each of the 16 10MHz blocks has a reserve price of $250,000. Bidders will need to deposit $500,000 to take part. If everything sells at the reserve price, the government will raise $4 million. Prices can go higher.

No single bidder will be able to buy more than four blocks in the first auction round. This is less than the 80MHz to 100MHz recommended for full 5G services by the GSMA, the international mobile operator trade association.

Temporary spectrum rights not tradable

The rights are not tradable, are nationwide and buyers must use them for 5G mobile services. Licence terms start later this year and finish at the end of October 22. The government will hold a further, long-term auction for the spectrum that year. The government says it expects to free up more spectrum later.

Bidders in the March auction will have to return existing 3.5GHz management rights to the government. This will affect Vodafone the most. It could see its existing 3.5MHz holding fall. Returning existing spectrum will help flatten the playing field. There will be a refund for returned management rights.

Radio Spectrum Management, part of the Ministry of Business, Innovation and Employment, will use a simplified version's of a combinatorial clock auction. In effect, this starts with the seller offering blocks at the reserve price. If the demand for blocks is greater than the supply, it increases the price.

For that to happen in the March spectrum auction there would need to be more bidders than New Zealand's three existing mobile carriers. Dense Air, which owns 70MHz of 2.5GHz spectrum that it bought in 2018, is a potential fourth bidder.

If the government doesn't sell all 16 lots in the first auction round, it may offer them to existing bidders.

Preparing for life after copper

The Commerce Commission is preparing a copper withdrawal code. It says it expects to issue a draft code soon. The code sets out consumer protections for after Chorus stops supplying copper services. The earliest this can happen will be from the middle of this year.

Chorus can only stop copper services in areas where fibre is available and where it can connect a home to fibre at no charge. At the same time Chorus is free to choose to keep copper services.

Vodafone back in mobile market pole position

Telcowatch reports Vodafone has regained head-to-head leadership of New Zealand's mobile market. The latest report says Vodafone had a market share of 36.8 percent in December. That puts it ahead of Spark on 34.9 percent.

Vodafone and Spark have been jockeying for top spot in recent years. Complicating matters is Spark's Skinny brand which has 5.6 percent market share. Skinny was the fastest growing carrier in 2019, although from a low base. 2degrees' performance was flat over the year. It ended on 22.7 percent.

Spark Foundation sells Givealittle

Spark Foundation sold its Givealittle not-for-profit fundraising service to Perpetual Guardian. The buyer is a trustee business. Neither party has made the terms of the deal public. Givealittle has been in operation for 11 years. During that time it has raised $130 million for various causes. Last year the Spark Foundation said it wanted to find new owners for Givealittle so it could focus on digital equity programmes.

King is Vodafone's people person

Jodie King, Air New Zealand's chief people officer, is to move to Vodafone. She replaces Antony Welton, who has moved to become Vodafone's customer operations director. King spent six years at Air New Zealand, before that she spent 16 years at KPMG in London.