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Labor, Communications Minister Stephen Conroy who is struggling to commercialise the National Broadband Network is facing a new dilemma after a senior Optus executive said that his Company is considering a 4G network sharing arrangement with arch rival Vodafone as opposed to paying out millions to buy 4G spectrum.Optus consumer boss Kevin Russell claims that he is considering building more base stations while also expanding site-sharing arrangements with Vodafone, a move that could instantly devalue the worth of spectrum the federal Labor Government is trying to lease to carriers.
Speaking to the Financial Review, Russel claims that the government’s pricing is effectively double international benchmarks, and that Australian consumers will end up paying extremely high prices for their 4G mobile services as opposed to what consumers pay in markets like the UK and USA.
Late last year Conroy and the Labor Government, who are struggling to generate revenue from their recent mining tax initiatives, set a higher than expected $3 billion floor price on key licences for 4G spectrum a move that has labelled “ridiculous” by several telecommunication analysts. The Labor Government was banking on the increased revenue from the spectrum which will become available when analogue television is switched off in Australia.
Russell said that while the carrier would remain in the formal process and will lodge an application by the Thursday deadline, his Company did not need the spectrum to deliver a quality mobile network in the future. “There are always alternative strategies to spectrum – spectrum’s not the only thing,” he told the Fin Review.
“Our views are pretty public about the pricing: it’s high by any measure. And unquestionably, it’s meant we’ve reviewed and we will continue to review our options,” Mr Russell said.
“To cut to the chase, we have looked a lot harder at what is the best economic way to build a great network, a great customer experience – and we’ve got options,” he said. “You have to compare the economics of building sites with the economics of buying spectrum. The benefit of low frequency spectrum is better in-building coverage, but you can also meet that benefit with rolling out sites.”
