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U.K. broadband scales back wireless roll-out

Posted: 30 Nov 2004 ?? ?Print Version ?Bookmark and Share

Keywords:broadband? wireless broadband? 3.4ghz?

The U.K. broadband has denied reports that it has abandoned a nationwide roll-out of its wireless broadband service using the 3.4GHz spectrum it mostly won in an auction in June 2003.

The company, a fully owned subsidiary of Hong Kong telecom group PCCW, soft launched a service offering 512kbps in the Thames Valley in May of this year, dubbed Netvigator, and has been running trials elsewhere in the U.K.

However, a report in the Financial Times Thursday (Nov 25) suggested the company had decided it would be too costly to roll out the service to all parts of the U.K.

UK Broadband said it is still evaluating a number of rollout scenarios, ranging from coverage in one area to offering a service to about 75 per cent of U.K. households. It denied it had ever committed to full wireless broadband coverage, even though in 2003 it spent a reported $14 million acquiring all 15 of the regional broadband licenses put up for auction by the then Radiocommunications Agency, which is now a part of the communications-to-media industry regulator Ofcom.

It won 13 of the 15 regional licenses outright, and subsequently bought out the two other winners to gain a virtual monopoly in offering broadband fixed wireless using the 3.4GHz frequency across the country.

The heavily scaled-back investment plans by PCCW would ensure that BT maintains a stranglehold on the last-mile broadband connections to homes for some time. Rival internet suppliers and Ofcom hoped that an aggressive roll-out of wireless broadband to homes would have provided much-needed competition with BT's network.

Analysts have estimated that a nationwide roll-out of the service would cost up to $1 billion. It is believed PCCW has invested up to $40 million to cover 300,000 households in the Thames Valley.

At the time of the licence auction PCCW faced little competition, partly because rivals were deterred by the potentially high costs of a large-scale roll-out of the service.

PCCW is now saying it plans to follow a prudent, step-by-step approach. It told the FT the company "favors continuing its phased approach to roll-out, after evaluating the market environment in the U.K. and studying the learning's of the initial soft launch period."

- John Walko

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