Government delays fixed wireless auction after telecoms downturn

The government's auction of broadband fixed wireless service licences, due to commence this week, has been postponed until next month, marking the latest casualty of the bear market ripping through the telecoms sector.

The government's auction of broadband fixed wireless service licences, due to commence this week, has been postponed until next month, marking the latest casualty of the bear market ripping through the telecoms sector.

Broadband fixed wireless is intended to offer business and consumers competitively priced fast Net and multimedia access by radio links instead of down a phone line. The technology is faster and cheaper to deploy than digital subscriber line or fibre optic-based access services. A Government source said: "We are well aware of the general market trend. We still anticipate a competitive auction, but time will tell."

Eleven companies are currently in the starting gate for the auction, which has reserve bids of £78m for 42 licences spread across England, Scotland, Wales and Northern Ireland. Three spectrum licences in the 28 gigahertz band are to be auctioned in each of the 14 regions.

Department of Trade and Industry officials blamed the postponement on "commercial reasons", but refused to elaborate.

Last week, Orange withdrew from the auction. The mobile operator said it was too early to commit to a particular technology. The company said yesterday it is considering a number of access technologies to deliver broadband services.

The remaining bidders, which include Energis and Norweb Telecom as well as Winstar Communications of the US, are understood to be committed to the auction. It is unclear, however, which companies plan to bid for which regional licences.

The reserve prices range from a high of £4m for each of the three London area licences to a low of £100,000 for each of three Northern Ireland licences. The Radio Authority is charged with conducting the auction in a format similar to that employed for the third-generation mobile auction last spring that raised nearly £23bn for five universal mobile telecoms service licences.