ACMA confirms telcos will pay $7.32b to renew spectrum licences

Telcos had been warning that ACMA’s price level put investments at risk and could force them to raise prices, but ACMA chair Nerida O’Loughlin said “our advice is that spectrum pricing alone should not lead operators to increase prices for consumers, as their aggregate costs for this spectrum will be lower than what they currently incur”.

The regulator also expects the mobile operators’ revenue to increase over the medium term, which should enable continued infrastructure investment.

The Australian Communications Consumer Action Network had previously argued that ACMA’s preferred approach to spectrum licence renewals doesn’t go far enough and called for the licence renewals to be subject to new infrastructure investment commitments and area coverage obligations.

What they said: “Through the consultation process we heard views that our preferred price was either too high or too low. Some stakeholders argued we had discounted the price for industry, while others suggested we had inflated it to raise additional revenue for government. Neither claim is correct,” O’Loughlin said.

“After all our analysis and testing, we have concluded that $7.32 billion represents the market rate. It is therefore the appropriate return, ultimately to Australian taxpayers, for the use of this valuable public resource.”

A Telstra spokesperson said that “this is a vital decision for the future of mobility services in Australia, and we have been clear on the negative impacts of the high price and what it will mean for our customers. The part of the decision we have seen doesn’t change that”.

The Telstra spokesperson also argued that the telco industry has provided evidence “of the serious flaws in the proposed methodology, and the negative consequences of that for customers and investors”.

A TPG Telecom spokesperson said “the ACMA has effectively signed off on a big new tax on mobile use, and everyday Australians will ultimately wear the cost”.

“By refusing to set a fair price for spectrum, the regulator has locked in a mobile tax that will drive higher costs and weaken competition across the market. That means less investment in better coverage and services and increasing pressure on prices,” the TPG spokesperson said.

“Spectrum is a public asset, and the ACMA’s role is to ensure it is used efficiently to deliver the best long-term outcomes for Australians, not treated as a revenue-raising exercise for government.”