The wireless venture, to be known as Pipex Wireless, is backed by Intel Capital (the VC arm of Intel), which is investing $25m in the new company. Speaking to ComputerWire, Pipex executive chairman Peter Dubens said this was the first round of funding and there would most probably be a second round sometime this year.
Intel and Pipex are the only shareholders in the new venture, and according to Dubens, the Stoke Mandeville, UK-based ISP still maintains slightly more than 50% of Pipex Wireless, while Intel has slightly less than 50%.
Pipex is the fifth largest ISP in the UK and it has transferred its entire 3.6GHz UK spectrum license to Pipex Wireless, which will start to offer the broadband service using 802.16d fixed WiMAX (Wireless Interoperability for Microwave Access) technology in London and Manchester in 2007. It is targeting the top eight (as yet unnamed) population centers by 2008. It hopes to eventually roll it out to about 50 of the most densely populated areas of the UK.
We see creation of this new wireless service provider as an incredible opportunity to provide new services to major cities in the UK, said Dubens.
WiMAX has long been touted as a possible 3G killer, promising faster connections over much longer distances than previous wireless technologies. In March, Urban WiMAX Ltd, a UK company with licensed spectrum in the 5.8GHz frequency band, announced plans to roll out a service using 802.16d fixed WiMAX technology to serve businesses in the country’s 10 largest cities. It began with a free trial in Westminster, one of the most densely populated areas of the UK’s capital city, and not coincidentally, home of the seat of central government.
There are a number of issues facing the roll-out of WiMAX. Due to the lack of installations, premise equipment is still relatively expensive. Also there is the problem of where to place your base stations, as mobile operators will not be keen to see WiMAX technology installed in existing mobile basestation sites. Pipex realizes this is not going to be easy to resolve, and Dubens said, there are a huge amount of planning issues.
Pipex gained one of only two national WiMAX licenses when it acquired Firstnet Services Ltd in 2003. Ofcom apparently relaxed conditions of Pipex’s spectrum license recently to allow the company to offer WiMAX commercially. The other national WiMAX license holder is Pacific Century CyberWorks Ltd, Hong Kong’s largest telecoms company.
Reports in March hinted that former UK incumbent BT Group Plc was interested in acquiring either Pipex or PCCW in order to gain access to the WiMAX licenses. It was thought that BT would use WiMAX to support a mobile service based on the technology.
Also in March, Pipex acquired one of the UK’s largest residential voice businesses from telecoms tycoon John Caudwell. It paid an undisclosed amount for Caudwell Communications Ltd, which trades under the name Homecall. Pipex is also trying to tempt former SMEs that have been dumped by Cable & Wireless Plc. Pipex said it would offer a credible alternative to BT for SMEs looking to ensure business continuity and security over the long term.
