Instalment payments for 26 GHz spectrum to support 5G
The changes allow for greater flexibility and immediate investment in new infrastructure like 5G.
22 October 2020
Successful bidders in the upcoming 26 GHz spectrum auction will be able to pay their spectrum access charges in 5 instalments, to support the rollout of 5G infrastructure. The Minister for Communications, Cyber Safety and the Arts has directed ACMA to implement this decision in its preparations for the auction, which is expected to commence in April 2021.
Offering instalment payments gives bidders greater flexibility in light of the challenging circumstances created by the COVID-19 pandemic. It also allows greater upfront investment in 5G technology and the additional infrastructure that will be required to use the 26 GHz band. This will support the Government’s Communications Policy Objectives for the Allocation of the 26 GHz band, which include supporting the deployment of 5G technologies, promoting competitive market outcomes for the long term benefit of consumers, and encouraging investment in infrastructure, including in regional Australia.
The Government’s 2018 Spectrum Pricing Review recommended that the Australian Communications and Media Authority (ACMA) should generally require upfront payments, but noted that short-term deferred payments may be appropriate in exceptional circumstances, provided a mechanism to reduce risk to the Commonwealth is in place. In light of the unprecedented economic circumstances, reducing the upfront capital costs required for spectrum licences in this band will release capital that bidders can direct towards investments to build Australia’s 5G networks and stimulate the wider Australian economy. To mitigate risks to the Commonwealth in the case of default, a bank guarantee will be required for a specified portion of the amount owing to the Commonwealth.
The Minister for Communications, Cyber Safety and the Arts has directed ACMA to implement this decision in its preparations for the upcoming spectrum auction in 2021. The 26 GHz band will complement spectrum in the 3.4–3.7 GHz band, which is already being used by mobile network operators to deploy 5G services.