The National Broadband Network Company (NBN Co), the Australian government-owned entity tasked with providing universal broadband services across the country, has acquired the spectrum holdings of satellite broadcaster Austar.
Under the terms of the…
The National Broadband Network Company (NBN Co), the Australian government-owned entity tasked with providing universal broadband services across the country, has acquired the spectrum holdings of satellite broadcaster Austar.
Under the terms of the transaction, NBN Co will acquire Austar’s 2.3GHz and 3.4GHz spectrum licences for A$120m. The payment will be split between A$58m for Austar subsidiary that holds the spectrum licences, with a further A$62m to be used to pay down a portion of this subsidiary’s debt.
Austar pointed out that the deal with NBN Co differs from a similar spectrum sales agreement it signed with Optus and OPEL at the beginning of 2008. That deal saw the telecom operators pay Austar A$65m in cash as well as agree to various wholesale arrangements for the use of Austar’s 2.3GHz and 3.4GHz spectrum licences.
Commenting on the transaction, NBN Co CEO Mike Quigley said: “Acquiring the Austar spectrum will allow us to get on with the job of building services for rural and regional Australians. Our network will be based on a suite of technologies aimed at providing the most cost-effective rollout of services to meet the needs of Australians wherever they live or work, on a standardised, ubiquitous network.”
The first NBN Co fixed-wireless commercial services are scheduled for delivery in mid-2012 and will be made available to retail service providers, including Austar, on non-discriminatory terms. For the 7% of premises outside NBN Co’s fibre footprint, the company intends to use satellite broadband services.
To that end, NBN Co is on the verge of selecting the prime vendor for its two planned Ka-band satellites. The company sent out an RfP at the end of last year and is expected to decide on a manufacturer in the next few weeks. NBN Co has estimated that the satellites would cost in the region of A$500m each to build, launch and insure.
For its part, Austar stated that following the sale the company would concentrate on developing its content delivery platform beyond its current satellite-delivered customer base of 30% of regional homes.
Deanne Weir, Austar’s group director of corporate development said: “Austar will focus not only on launching enhanced content services and transactional video offerings for our satellite customers, but we will also look to create relationships with regional Australian homes that we don’t currently service, via high-speed broadband and VOIP offerings.”
There has been speculation in the local media recently that Austar could be a target for its pay-TV peer Foxtel. One report suggested that early-stage talks are already underway. Austar is majority owned by US media group Liberty Global while Foxtel is 50% owned by Australian telecoms incumbent Telstra, 25% by News Corp and 25% by Consolidated Media Holdings.
