Design of 4G spectrum auctions could cost Irish Exchequer €300m

31 May 2012

The optimal potential of Ireland’s 4G spectrum auctions could be offset by as much as €300m due to the design of the spectrum blocks, it has been claimed.

Broadband group IrelandOffline has warned that the 4G spectrum auction designed by ComReg could cost the taxpayer.

It points out that the dispersed rural population of Ireland is not suited to the design chosen by ComReg.

IrelandOffline’s Eamon Wallace said only urban areas benefit from having multiple networks and as a result rural areas will suffer.

He said each winner of spectrum at auction will have an obligation to cover 70pc of the population for the next 20 years.

But the problem is that 70pc of Ireland’s population only occupies 10pc of the land area of the State.

“The immediate victim will be the Irish taxpayer and the ultimate victim will be the people living in 85pc of the State whose coverage will be worse over the 20-year lifetime of these licences,” Wallace explained.

“The reason why the Swiss taxpayer got €800m at auction for the same spectrum in March 2012 (for only 8m inhabitants) is because the networks can continue to share masts in rural areas as they have already done for 10 years. No new masts will be required to roll out the new services.

“The competition should have been designed to allow operators to fully share in rural areas (RAN Sharing), where they never competed anyway and to compete in urban areas. However, the spectrum is sliced up into tiny blocks which are not usable for high-speed mobile broadband and these separate blocks will be served from separate masts owned by separate operators. Large blocks of short-range spectrum suitable only for urban areas will become available for auction next year as the MMDS TV services shut down in April 2014 and free the spectrum up.

“In rural areas, the operators should have been required, not only to share their spectrum, but to share single masts, as well. This would mean that only one physical network would exist in most of the State and one set of masts is all that is required but would also pool large blocks of spectrum on those masts capable of delivering high-speed mobile services into the future. There is no competition in these areas currently,” he pointed out.

The forthcoming 4G auctions

ComReg said in March that provided there are no further objections to a current consultation should be the final step before a date for the auctions is set.

The spectrum auctions are critical because as well as paving the way for 4G technologies like LTE that are featured in the new iPad with speeds up to 73Mbps possible, former 2G bands can be used to provide 3G coverage to greater swathes of the population.

In total, 280 MHz of sub-2 GHz spectrum (ie, 140 MHz of paired spectrum) will be made available, more than doubling the currently licensed assignments in these particular bands.

ComReg said it will be a combinatorial clock auction, meaning it allows bidders to make packaged bids over multiple rounds of bidding within a prescribed timeframe.

The winners of spectrum will be those who make the highest bids.

Ireland’s wireless spectrum auctions – the lots

  • The 800 MHz band is the frequency range 791-821MHz paired with 832-862 MHz which comprises six paired 5 MHz lots.
  • The 900 MHz band is the frequency range 880-915 MHz paired with 925-960 MHz which comprises seven paired 5 MHz lots.
  • The 1800 MHz band is the frequency range 1710-1785 MHz paired with 1805-1880 MHz which comprises 15 paired 5 MHz lots.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years