Calculation of Offer Prices
[ Last Updated 12 May 2006 ]
Individual offer price for licences corresponding to present AM/FM frequencies have not yet been set. The offer prices will reflect the engineering assessment and exclude sites not currently utilised for AM/FM broadcasting.
It is intended that licences serving a similar population area will be offered at similar prices, irrespective of the original purchases prices of the individual licences. Licences in the VHF-FM and MF-AM bands will be treated separately and, apart from any population coverage differences that exist between licences serving a similar area, will otherwise be at similar prices.
Government has agreed the total value of all offers will be limited to a maximum of $96 million (value in 2010 dollars) and details of the exact calculation methodology are now being developed by the Ministry.
It is anticipated the offer price for AM/FM spectrum licences will be calculated using a price-setting formula, subject to population weighted averages by comparable transmitter location, and a minimum charge along the following lines:
- Each individual licence originally sold by auction or tender is assigned to an "averaging group" based on its transmitter location and target population. (A list of averaging groups will be available once finalised).
- The price-setting formula is applied to each original licence to calculate a renewal offer price, based on original prices paid for similar licences, relevant economic data and current population averages.
- The population coverage of each original licence is calculated based on the 2001 census data.
- A weighted average dollars-per-capita is calculated for each averaging group, based on the renewal offer price and population coverage of each original licence in the averaging group.
- Scaling of values to ensure that the sum of all offers meets the Government pre-set price limitation of $96 million.
- A minimum offer price for any licence set at $1200.
The pricing formula for the calculation of offer prices has been decided on.
This page will be updated from time to time. If you have any queries regarding the project or wish to receive notice of updates please contact the Ministry via email to radiospectrum@med.govt.nz.
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