Bidding war between giants for 'digital dividend'

17:52, Jan 13 2014

Vodafone and Telecom are believed to have bid $77 million for the last remaining 10 megahertz block of "digital dividend" radio spectrum, with the auction expected to resume this week.

Eight out of the nine blocks of the 700MHz spectrum were sold to Vodafone, Telecom and 2degrees for the minimum reserve price of $22m each in October, but a bidding war is under way for the final block. The Ministry of Business, Innovation and Employment said it would not comment on the progress of the auction.

But a source close to the auction said the price was ratcheting up by $3m a day.

Craigs Investment Partners analyst Arie Dekker said he believed the auction had been put on hold for a few weeks over the holidays but it should now be about to resume. The high price Telecom and Vodafone were willing to pay for the radio spectrum indicated they intended to use it for their 4G networks and would not simply "hoard" it to stymie competition, he said.

2degrees has nevertheless asked the Commerce Commission not to approve the sale of the spectrum block to either bidder. A ruling from the competition watchdog is due by February 14.

2degrees spokesman Mat Bolland said the price the auction had reached should not change anything. "The amount being bid reflects that this is an opportunity for a very large player to achieve a structural advantage and we hope the Commerce Commission really considers that."


Fairfax Media