6. Auction alternative

Vodafone is strongly opposed to an auction being used as the method for reallocating renewal rights instead of giving the existing right holders first right of refusal.

Using an auction to renew spectrum does not achieve one of the key objectives of the renewal process that is to provide certainty to existing right holders, particularly given the amount of spectrum that is up for renewal.
Switching processes at this point would also be entirely inconsistent with the Ministry’s long-standing approach to renewal issues. Given the importance of 900 MHz spectrum to our business, and the importance of that business to our customers, we would be very concerned if the right of first refusal were to be taken away.

If there is an auction (because the existing right holders do not renew) Vodafone supports the Ministry’s proposal to use simultaneous multiple round auction (similar to Auction 6) for reallocating spectrum. However, Vodafone proposes that the existing right holder should be allowed to participate in the auction.

Vodafone is of the view that the rules used in Auction 6 have been fine tuned based on previous experience. The rules give adequate flexibility to bidders while reducing gaming.

If the spectrum is to be reallocated by way of auction Vodafone proposes the spectrum lots are broken up into smaller parcels. This allows the market to decide how the spectrum gets allocated among the various industry players. Otherwise the Ministry could have a significant influence on spectrum allocation through its choice of parcels sizes.

Last updated 3 April 2008