Sunday, December 31, 2006

Licenses for WiMAX-capable frequencies for sale

Italy is to join the growing number of countries embracing super-fast wireless broadband after the government said it will start selling licenses for WiMAX-capable frequencies by June 2007.

The planned sale, which the Italian Communications Ministry announced late on Wednesday, was welcomed on Thursday by Tiscali and Fastweb while analysts said the auction was also likely to also attract bids from Telecom Italia.

The sale is expected to generate between 100 million and 200 million euros for the Italian state, far below the billions gained from the sale of 3G mobile phone licenses at the peak of the high-tech boom, analysts said.

"Tiscali has successfully tested WiMAX technology and sees with favor the opening up of frequencies (in Italy)," Mario Mariano, who heads Tiscali's operations in Italy, said.

A source at broadband provider Fastweb, which has already tested the technology in northern Italy, said the company also considers WiMAX a potential opportunity.

"It fits very well with our existing fixed-line broadband technology," the source said.

WiMAX, short for wireless interoperability for microwave access, is a medium-range sibling of the popular Wi-Fi technology which can be beamed over kilometers rather than meters.

Like Wi-Fi and Bluetooth, WiMAX uses radio frequency rather than conventional wires to beam the Internet and data to laptops and mobile gadgets but its main attraction lies in the low number of base stations required to create a network.

The technology uses a prime sliver of frequency which can support mobile Internet because it can hold relatively large amounts data but can also travel relatively long distances.


In a statement issued late on Wednesday, the Communications Ministry said it had agreed for the reallocation of frequencies from military to commercial use, adding the 3.4-3.6Ghz spectrum would be allocated for WiMAX technology.

The government is to sell the frequencies while it will be up to Italy's telecoms regulator AGCom to decide by February how it intends to distribute the frequencies.

A ministry source said it was not yet clear whether there would be an auction or whether the licenses will have a regional or national reach.

The state would retain ownership of the frequencies but the licenses will give companies the right to use them for a number of years, the source added.

"We expect WiMAX licenses to fetch a total consideration in the region of the low hundreds million euros," said analysts at Banca Akros.

The ministry source said it expected the government to sell additional WiMAX licenses in the future.

Shares in Fastweb rose 1.3 percent on Wednesday and extended gains in early trading on Thursday on news of the planned licenses sale. "The only sector that is moving today is the telecoms sector, helped by the reports on WiMAX," said a Milan trader.

Fastweb shares were up 0.2 percent at 43.26 euros at 1130 GMT against a slightly weaker Milan stock market. T.Italia also rose 0.8 percent to 2.3 euros.

WiMAX licenses are being sold in other European countries such as France, Germany and Greece.

Many mobile firms, still hurting from having to write off their huge 3G costs, are attempting to thwart WiMAX in the hope of forcing people to use their 3G services so they can claw back some of their investment.

A spokesman for 3 Italia, owned by Hutchison, said the mobile phone company was not interested in WiMAX if it turned out to be the equivalent of ADSL fixed-line broadband.

He said 3 Italia was testing an enhanced version of UMTS that would perform much of what can be done with WiMax.

Telecom Italia was not immediately available for comment.

Your Ad Here