Installment payments for 26 GHz spectrum to support 5G

Successful bidders in the upcoming 26 GHz spectrum auction will now be able to pay their spectrum access charges in instalments to support the 5G infrastructure rollout. The Minister for Communications, Cyber Safety and the Arts has directed ACMA to implement this decision in its preparations for the auction in April 2021.

Offering instalment payments allows bidders to have greater flexibility in light of the circumstances created by the COVID-19 pandemic. The instalment payments also allow greater upfront investment in 5G technology and the additional infrastructure that will be required to use the 26 GHz band.

This auction will support the Government’s Communications Policy Objectives for the Allocation of the 26 GHz band. This includes supporting the deployment of 5G technologies, promoting competitive market outcomes for the long term benefit of consumers and encouraging investment in infrastructure in Australia.

While the Government’s 2018 Spectrum Pricing Review recommended that the Australian Communications and Media Authority (ACMA) should require upfront payments, short-term deferred payments may also be allowed in exceptional circumstances provided that there would be a mechanism to reduce risk to the Commonwealth.

Spectrum licenses in this band are required to reduce the upfront capital costs due to the current economic circumstance. This is so that bidders can direct their capital towards investments on Australia’s 5G networks, further stimulating the country’s economy.

A bank guarantee will be required so as to mitigate risks to the Commonwealth in the case of default. This guarantee will be a specified portion of the amount that is owed to the Commonwealth.

The Minister for Communications, Cyber Safety and the Arts directed ACMA to implement this decision in its preparations for the upcoming spectrum auction in 2021. The 26 GHz band will complement the spectrum in the 3.4–3.7 GHz band which is used by mobile network operators to deploy 5G services.