The mobile telecommunications industry has been reassured that the Federal Government is working to its timetable on announcing arrangements for the reissue of existing spectrum allocations, including those covered by 15-year licences.

AMTA Chief Executive Officer, Chris Althaus, said reissue of licences was vital to the regulatory certainty and confidence needed to plan investment and innovations.

A spokesman for the Minister told the Australian Financial Review earlier this week: "The government recognises the importance of these licences and that decisions on spectrum licence reissue will have implications for the structure of the communications market well past 2020.

"The department has conducted a number of processes to ensure that the major policy decisions on this issue are made by government on a fully informed and considered basis, including: seeking advice on international experience and key issues relating to spectrum licence reissue from international experts; releasing in April 2009 a public discussion paper on possible public interest criteria for spectrum licence reissue decisions; commissioning in 2009 a study estimating the potential value that could be received by government on licence reissue; and holding initial consultations with key industry stakeholders.

"The minister said in April last year that he would provide details about the process regarding licence renewal within 12 months and we remain committed to that time frame."

The Financial Review said on Monday that the Government's delay over its spectrum licensing policy is making mobile network operators anxious.

Mr Althaus said the industry was looking forward to ongoing dialogue with the Government and existing licence holders on details of the licence reissue process, conditions and specific timetable for actions.

“Re-issue of licences is vital to the regulatory certainty and confidence needed to plan investments and innovations. We believe the Government understands the key importance of this issue and is moving to produce a workable framework to give more certainty in this vital area.”

The newspaper said Australia is one of the first countries in the world to face the expiry of the second- and third-generation licences that were sold off across the globe around the turn of the millennium, because most licences here operate for just 15 years.

Without licences for blocks of the radio frequency spectrum, incumbent operators Telstra Corp, Optus and Vodafone Hutchison Australia would have no mobile business as voice and data signals could not be transmitted between mobile phones and their networks.

Last April, the government began canvassing options for the 2G and 3G licences, including putting them back on the market through an auction, or allowing the incumbent holders to renew them.

The Communications Minister, Stephen Conroy, told an industry conference at the time: "While key licences do not begin expiring until 2013, spectrum licence reissue requires major government policy decisions.

"There are complex issues that will take some time to assess. But work has already begun and I expect that the government will be making decisions over the next 12 months on this important matter."

The Australian Financial Review reported Mr Althaus saying: "We have seen very little progress on this issue since that time. The government are still within their committed time but we are increasingly anxious, given that the time is fast approaching when we need to hear something from them on this.

"Everything in the spectrum world takes a long time and we are sitting here providing myriad services to 24 million mobile devices based on existing spectrum that those people rely on.

"It is very unnerving that, within three years of an expiration date, the industry still has no clear signals from the government, which needs to set a policy and a process to create clarity and certainty."

The networks' biggest fears are that the government could try to rig any auction to extract maximum revenue from the licences, or that it could set aside a new licence for a new entrant, forcing the incumbents to operate existing services with less spectrum.

Vodafone Hutchison Australia director of strategy and business planning Zac Summers says: "It's important that it's priced in a fair way - we just want to engage with the government to work out how it's going to be done."

The scarcity of spectrum is one of the biggest problems facing the telecommunications industry, which says it needs additional capacity to soak up explosive demand for mobile broadband usage on laptops, iPhones, BlackBerrys and other so-called smart phones.

The industry scored significant wins last month when the government and the Australian Communications and Media Authority indicated separately that two blocks of spectrum would most likely be sold off to mobile networks for fourth-generation (4G) services.

The two blocks - one currently used for analogue television services and the other for outside broadcasts - are at ideal frequencies for carrying the large amounts of video data that 4G services are expected to offer. Analysts expect the auctions to fetch more than $2 billion for government coffers.

But Mr Althaus says that, until the existing licences issue is resolved, networks cannot plan how much money to set aside for new spectrum licences and network equipment.

"The two new bands we are talking about are critically important to the future. However, in a practical operationa sense the certainty that is needed around existing resources is as important, if not more important, because it underpins 24 million existing mobile phone services.

"We have consistently said to the government that the certainty we require on existing spectrum to support consumer demand is the first cab on the rank because we can't plan investments for network upgrades and equipment and content in the new bands until we have a good understanding of our position on existing holdings.

"If you've built a road and people are using [it], but continued use depends on the government giving you another licence, it's a huge investment to have sitting there.

"The general public are using it on a daily and hourly basis and you don't know whether the road will stay open. All good sense says it will, but you still have major capital expenditure to support and maintain it."

In 2001, the government netted $1.17 billion from the sale of 3G licences in the two gigahertz band, having earlier raised more than $1.5 billion from sales of spectrum in the 800 megahertz band used for 2G services.

"We still have a lot of customers on 2G services, for example, who really value voice and text, and while we do try to refarm spectrum where possible there are still frankly too many users on 2G in metropolitan areas," says VHA's Mr Summers, explaining the importance of the 2G licences held by Vodafone. VHA also operates the 3 brand, which offers 3G services only.