Sweden Gains USD323 Mil. from Digital Dividend Auction

The Swedish regulator has announced it has closed the auction of the 800-MHz “digital dividend” spectrum in the country, just one week after it began. The regulator, PTS, revealed that all three main mobile operators in the country gained licences, making approximately 2.05 billion Swedish kronor (USD323 million) for the government.

The winners were Hi3G Access (3 Sweden), Net4Mobility (the Long-Term Evolution joint venture of Telenor and Tele2), and the incumbent TeliaSonera, with each operator gaining 2 x 10-MHz paired licences. In addition, Net4Mobility's bid includes a SEK300-million sum, which has been set aside to cover those permanent homes and fixed places of business in Sweden that currently lack broadband.

The licenses are valid for 25 years, up to and including 2035, and the winning bidders will pay a processing charge of SEK200,000 per block to PTS, on top of the winning bids. The regulator also revealed that local operators Com Hem and Netett Sverige also participated in the auction, but did not win any licences.

Outlook and Implications

• Improving Broadband Coverage in Sweden: The Swedish regulator launched the 800-MHz auction last week, for six mobile licences in the digital dividend bandwidth, which will be freed up by the switch-off of the analogue TV signal (see Sweden: 1 March 2011: Sweden Launches Digital Dividend Auction, Expected to Take Up to Two Weeks). PTS says the licences will enable operators to expand their next generation of services, and meet consumer demand for services in the mobile broadband sector. In particular, SEK300 million of the SEK769 million that the Telenor/Tele2 LTE joint venture Net4Mobility paid for its licence will be used to specifically develop infrastructure in rural areas, as part of the Swedish government's goal of bringing broadband coverage in the whole country.

• A Further Boost to LTE Adoption: The auction of the digital dividend spectrum auctions in particular is increasingly being utilised by regulators as an opportunity to boost broadband competition and coverage in under-served regions. The PTS is also looking to maintain the country's position as a world leader in LTE (see Sweden: 25 January 2011: TeliaSonera's LTE Service—Case Study). The completion of the auction makes Sweden the second European country to issue licences in the digital dividend bandwidth, following the sale in Germany last year (see Germany: 21 May 2010: German 4G Auction Ends with USD5.6 Bil. in Proceeds, E-Plus Left Without 800-MHz Frequencies). The auction has proven a major boost to the roll-out of LTE services in the country; Deutsche Telekom's T-Mobile and O2 Germany have already begun rolling out LTE networks in rural regions, while Vodafone Germany claims to have the most extensive network in the country, pledging 100% population coverage by 2014.

• Fresh Doubts over Sale of TeliaSonera Government Stake: There is now further doubt over the proposed full privatisation of TeliaSonera, following a vote by a Swedish parliamentary committee against the planned sell-off of the government's remaining 37.3% stake in the former incumbent (see Sweden: 2 March 2011: Sale of Sweden's Stake in TeliaSonera in Doubt as Committee Votes to Block Government Plans). The government's stake in TeliaSonera, the Nordic region's biggest telecoms firm, is thought to be worth some USD2.2 billion.