Little financial reprieve for Australia’s mobile operators

Nicole McCormick, Ovum senior analyst Telco Strategy

AUSTRALIA: The government gave Australia’s mobile operators little financial reprieve when it handed down its final pricing for license renewal.

Nicole McCormick, senior analyst Telco Strategy, said: “The Government has reduced 800MHz spectrum renewal costs for Telstra and Vodafone, but with the industry having to find an estimated more than $3 billion collectively for mobile re-licensing, the Government’s agenda is clear: maximize revenue from renewals and spectrum auctions.”

Vodafone, which faces the largest spectrum renewal bill of around $1.5 billion, will likely have to call on its global parents – Vodafone Group and Hutchison Whampoa – to assist with financing. Telstra said yesterday it will fund its bill – estimated at around $1.2 billion – through debt.

“Yesterday, the Government unveiled 700MHz/2.5GHz auction parameters that ensure a competitive bidding process. Today, it calls on mobile operators to find in excess of $3 billion. Cash flow rich operators will not be so perturbed by the cash calls, others may not be so happy.”