New Zealand sensibly abandons latest 5G auction and just hands the spectrum over

A chunk of mid-band spectrum was due to be auctioned-off in New Zealand around now, but COVID-19 has caused a change of plan.

The Radio Spectrum Management department of the NZ government recently made the following announcement: “In May 2020, the Auction for short-term, early access rights in the 3.5 GHz band for 5G services (Auction 20) was cancelled. This was due to the constraints imposed by the Covid-19 pandemic. Instead, a direct allocation process will be undertaken. Offers will be made of 40 MHz to Dense Air, 60 MHz to Spark, and 60 MHz to 2degrees.”

Spark and 2degrees are two of the three Kiwi MNOs, alongside Vodafone NZ, which apparently has quite enough mid band spectrum already, thank you very much. Dense Air is a UK-based company that specialises in small cell connectivity. Understandably Spark and 2degrees are happy with the decision.

“Securing 3.5GHz spectrum was critical for the rollout of a full suite of 5G services, so we would like to acknowledge the Government for facilitating the allocation, which will enable us to proceed with our planned 5G roll out at pace,” said Spark CEO Jolie Hodson. “We plan to switch on 5G sites in a number of major centres and regions across the North and South islands over the next year. To maintain this momentum, we are keen to work with Government to accelerate the timeline for the longer-term spectrum auction, which is currently scheduled for November 2022.”

“This decision makes sense. At a time when the impact of Covid-19 means operators are having to make tough calls on how they spend their capital, it needs to be focused on the networks delivering the capacity people need – and can use – today,” said 2degrees Chief Executive Mark Aue. “At the same time, access to 5G spectrum will allow 2degrees to continue its 5G network planning and site acquisition so it can build and test the technology. This will provide time for 5G uses cases to develop, and initial deployments, in advance of long term spectrum rights that will power national 5G services from late 2022.”

Vodafone seems to have kept quiet on the matter, but it must be secretly annoyed at the good fortune of its rivals. Maybe it will have a quick word with the government behind the scenes, asking for a cheeky bit of spectrum sometime in future, to level the playing field once more.

It’s good to see that some governments and regulators are capable of forgoing easy money when the circumstances demand radical action. Besides, public money is already being thrown around in a bid to stave off another great depression, so a few Kiwi bucks is just a drop in the ocean. But credit where it’s due, this is not the time for the public sector to be extorting money from the private sector and NZ deserves credit for acknowledging that and acting accordingly.