D-Day start for wireless auction

Auctions for licences to provide 15 regions with broadband via the 3.4GHz radio frequency waveband will begin on 6 June, the Radiocommunications Agency has announced.

The first auction session will last for 30 minutes, with three firms - Pound Radio, Nomad Spectrum and WW Broadband - eligible to bid for all 15 regions.

But the list of 12 qualified bidders contains few established telecoms names, while the lenient terms and conditions of the auction mean that successful bidders need never actually roll out any services.

Among the confirmed bidders, only Hong Kong-based telecoms company PCCW is of any note beyond regional level, although it is not bidding under its own name and is yet to confirm which is its bid.

But newcomer Pound Radio recently added heavyweight consultants McKinsey & Company, legal firm Olswang and telecoms consultants BWCS and Contactica International as advisors.

Pound Radio was one of 15 applicants set up between 24 and 31 March 2003 which shared the same address, that of company formation agent Jordans. The other 14 have now pulled out of the auction process.

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 almost at its leisure.

Successful bidders are not required to submit roll-out plans or bankers' guarantees for the £100,000 to £300,000 licence fees and can hold licences for up to 15 years.

The government estimates that fixed wireless access could account for 18 per cent of broadband use in the UK by 2007.

Wireless access would deliver 2Mbps connections in areas where broadband DSL and cable services are unavailable.