Fixed wireless auction attracts one big bidder

The UK government's upcoming auction of frequencies for wireless broadband services has attracted just one major bidder for the 15 regional licences.

Applications for the 3.4GHz broadband fixed wireless auctions closed in April. But the list of 26 companies that applied to participate appears to contain few established names.

"Only two of them look capable of generating active services," said Michael Philpott, senior analyst at market watcher Ovum.

Hong-Kong based telecoms company PCCW has now confirmed it is going to bid in all 15 regions, although it has not applied to do so under its own name.

A PCCW spokeswoman was unable to confirm rumours suggesting that it could be behind 15 companies set up recently that have applied to bid in the auction.

Investigations by vnunet.com show that 15 of the applicants all share the same address, that of company formation agent Jordans. These firms were all set up between 24 and 31 March 2003.

vnunet.com visited Jordans' work premises in central London and was told that no one was available to comment. The company said that questions would have to be sent in by post.

PCCW has been eyeing the possibility of entering the UK market for some time, and could see the auctions as a cheap way of gaining a foothold.

Were PCCW to be successful with all of its bids, it could create a national broadband network.

Government estimates suggest that fixed wireless access will account for as much as 18 per cent of broadband usage in the UK within the next five years.

Fixed wireless is particularly suitable for areas where businesses cannot get DSL or cable access to broadband, and is capable of delivering connections at up to 2Mbps.

The lack of established firms in the auction could allow a hidden bidder to dominate fixed access wireless provision for 15 years.

Successful bidders have the option to renew their licences at five-year intervals, at the price they paid for the original licence.

Pierre Danon, chief executive at BT Retail, described the auction as "stupid", and has always stated that BT would not participate.

The Radiocommunications Agency expects the auction to begin before the end of May.