Government to Auction Two Licences in Telecommunications Sector

Government is to auction two licences for use in the 700 megahertz (MHz) band, with a view to attracting new entrants into the telecommunications market.

This was disclosed by the Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, during Tuesday’s (March 26) sitting of the House of Representatives.

The licences will be awarded to the highest bidders, once their bids meet or exceed the reserve price, and upon being determined as “fit and proper” by the regulators. Both licences have a 15-year term. The licencees will also be required to deploy their network and/or services across 90 per cent of the country within five years.

“I would like to underscore here how serious the Government is about the requirement to deliver mobile broadband services within the timeframe established; and if the timeframe is not adhered to, I will promptly withdraw that licence,” Mr. Paulwell said.

The Government will begin pre-auction activities in early April 2013 with the issuance of an Information Memorandum which will be advertised internationally, as well, as posted on the websites of the Technology Ministry and Spectrum Management Authority (SMA).

“From the date of the issue of the Information Memorandum until the issue of the Request for Proposals in May 2013, the Ministry and the Spectrum Management Authority will be actively working to sensitize the market as to the economic potential and the commensurate market value of this offering,” the Minister said.

The Minister added that the Request for Proposal will remain open for one month, with the entire process completed by July 15, 2013.

The 700 MHz band is the upper portion of the Ultra High Frequency (UHF) band, specifically channels 52 to 69 (698 MHz to 806 MHz). Internationally, the band was used for analogue television broadcasting; however, it has been allocated by the International Telecommunication Union (ITU) for broadband wireless services.

The band, which is considered to be low band spectrum, tends to be more penetrative and propagates farther, meaning that the signal goes through walls more easily, giving better coverage inside buildings, and requires fewer towers to cover a specific geographical area.

“This dramatically reduces the cost of deployment, especially when compared to the costs of deployment of systems operating at higher frequencies,” Mr Paulwell said.

Since commencement of operations in April 2001, the SMA has collected approximately $1.83 billion for Spectrum Licence Fees, and since the 2003/04 financial year, has collected $1.66 billion in Regulatory Fees, which cover the normal operating expenditure of the SMA.

By Latonya Linton, JIS Reporter