As reported briefly (CI No 2,104), Ionica L3 Ltd, the start-up company intending to launch a radio-based UK telephony service, has received the official go-ahead from the Department of Trade & Industry. It has won a full Public Telecommunications Operator’s Licence, making it the third public telecommunications operator licensed to provide fixed telephone services, after British Telecommunications Plc and Mercury Communications Ltd. Ionica is still being very cagey about its exact plans, and the technology it intends to use: one reason is that the plans themselves are still fairly embryonic: the company says that it is now in the final stages of selecting a manufacturing partner for the radio equipment at the heart of the network. It says it has whittled down its potential partners to two, and that both of the candidates intend to manufacture the equipment in the UK. All that is known about the technology is that it uses a fixed FM radio technique – the Department has allocated two 15MHz bands at 3.4GHz for the service – and that there has been international interest in the system. Indeed Ionica says that on the partnership side, its next step is to evaluate the right organisation to increase the overseas strength and opportunities. Ionica says that customers will be able to receive everything from directory enquiries and local calls through to international service. The company is pitching for around 5% of the telecommunications market for residential and small business customers in the UK 10 years from now. It promises to undercut British Telecom across the board, signing its first subscriber by the end of next year. It is forecasting that peak funding, the point at which revenue balances expenditure, will be no more than UKP100m, and expects to be profitable after three years, going after the residential and small business markets. Whether it signs an interconnect deal with British Telecom or Mercury is still up for grabs after a year of discussion. News of the licence award coincides with completion of major funding for the company. Existing shareholders include Yorkshire Electricity Plc, Ivory & Sime, 3i Plc, Robert Fleming, Kingston Communications Ltd and Symbionics, while Northern Electric Ltd is the newest investor. Ionica also says that a further new alliance is expected by the summer.
