The operators are furious because UK Broadband can take them on with a 15-year license it acquired for 20.8m pounds ($41.1m) just as they are beginning to see the upsurge in data revenues now that they have moved to HSDPA. They have already written off most of the 22bn ($43.5bn) they paid at auction for 3G licenses, when it was the most attractive mobile technology on offer.
Mobile WiMax did not exist when UK Broadband was first granted its license for wireless links to fixed premises, but Ofcom said the launch of new services is likely to increase consumer awareness of mobile and nomadic services and foster an improved understanding of the applications of recently developed technologies. It said this is likely to create the conditions for a further increase in consumer take-up of these services, including services by other operators in the market.
UK Broadband services could therefore have an important role in reducing any delay in the development and launch of wireless broadband services in the UK.
Ofcom said that in addition to the benefits of competition between UK Broadband services and current 3G services (and other possible substitutes), further innovation may be encouraged using WiMAX technology because certain new services may be dependent on the higher data rates that are likely to become possible.
It said it disagrees with the idea that there would be no benefits from the launch of services that are very similar to those currently offered. It said intensified competition in the provision of existing services could benefit consumers by lowering prices.
UK Broadband is a subsidiary of Hong Kong, China-based PCCW. Its services, under the NOW Broadband brand, are currently restricted to the Thames Valley and parts of London where it offers a mixture of TD-CDMA technology and pre-WiMAX services.
Ofcom said UK Broadband plans to migrate its existing customers to 802.16e-compliant WiMAX equipment, providing nomadic services via a public access WiFi network to WiMAX modems. It will also install semi-private base stations in client premises, which would allow access both to the client’s staff and to UK Broadband’s public access service. A minimum speed of 1.5Mbps to 2 Mbps per user might be offered and Ofcom said that this would increase the incentives for existing providers to improve their offers.
UK Broadband COO Keith Hawkins would make no comment on what he said were confidential details on the roll-out plans. What I can say is that we are moving forwards with testing of WiMAX equipment, to show what WiMAX can really do at 3.5GHz, he said.
Our view
Ofcom is quite right to reject the mobile operators arguments against UK broadband. They paid what in hindsight were exorbitant prices for 3G licenses, and the technology has been slower to develop than they hoped. Equally, those investing in WiMAX networks have to be aware that a new technology could emerge at any moment that offers faster, cheaper wireless communications. That’s what commercial risk is all about.
Consumer electronics goods manufacturers, most notably the makers of digital cameras, are looking to incorporate WiMAX connectivity in their products over the next few years. It is right that regulators are looking to encourage maximum competition in the market to give consumers a range of inexpensive wireless services to transmit data.
