The government announced yesterday that it will hold its first public auction for 4G spectrum frequencies, with two licences up for bid on frequencies reassigned after their original licence-holders failed to utilise them.

The two licences cover the 800 MHz and 2600 MHz band of the spectrum, and will offer mobile network operators additional wireless bandwidth to expand their 4G networks.

Khov Makara, spokesman for the Ministry of Post and Telecommunications, said the government will give telecom companies the chance to bid for the licences under a new “comparative tender process” that will also take into account how the companies intend to utilise the frequencies. Previously, the government sold spectrum licences to whoever was willing to buy them.

“This is the first time to open licences to a public bid for all mobile operators, as we want to expand the quality of service to the consumer,” he explained. “This is a new model that allows us to get more revenue for the state, and we will no longer be selling frequencies on a first-come first-serve basis, as before.”

Telecom industry insiders have complained that the lack of 4G spectrum frequencies is a major impediment to their rollout of affordable nationwide coverage, and have urged the government to make more spectrum frequencies available. Some have accused various licence holders of holding spectrum with no serious plans to utilise it, and television stations of hogging the coveted 700 MHz frequency.

According to Makara, the two frequencies to be auctioned were repossessed by the government from their owners after they failed to make use of them.

“We warned inactive frequency owners [before], and confiscated the licences because they are the state’s property,” he said.

Mobile network operators with 4G expansion plans have until December 1 to submit their bids on the licences. Qualified bidders will be notified by the end of December if they have been shortlisted.

Makara declined to comment on how much the government expects to receive for the licences, but stressed that the decision to award the licences would be determined by merit, not just money.

“The bidding process is not just about generating revenue as successful bidders must prove that they have the qualifications and performance to use them properly,” he said, warning that the government would revoke the licences if the bidders failed to follow through on their plans.

Thomas Hundt, CEO of Smart Axiata, which operates a nationwide 4G network, said his company would review the offering before deciding whether to submit a bid.

“Smart, just like other mobile operators, always explores the possibility of acquiring new spectrum to provide better – and in the data world – faster, mobile broadband for our customers,” he said.

“[However], we have yet to review the application package and the terms of the offer, including the price of the spectrum blocks, which is an important factor in any investment decision in acquisition of future spectrum.”