Optus may pull out of spectrum auction in Australia
18 Dec 2012
The Australian government's projections of netting around $3 billion with the sale of a new wireless spectrum has hit a major bump with Australia's second largest telecommunications company, Optus, pulling out of the auction.
The auction, which is crucial to the next generation of tablets and smart phones, may collapse after minister for broadband, communications and digital economy, Stephen Conroy's announcement of a reserve price that far exceeded the expectations of interested telcos.
Senior Optus management and parent company Sing Tel were in talks during the weekend.
David Epstein, who is responsible for government affairs at Optus said the company was a bit surprised about the pricing as it did not fit with its understanding of international benchmarks.
According to Epstein, the international benchmark was 38 cents per megahertz per head of population as against the government's reserve price at $1.36.
Epstein added, it was difficult to make the business case to invest in spectrum at that starting price.
