Auction of wirelesslicences attracts 10 bidders

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The Government's auction of high bandwidth fixed wireless licences in 11 English regions as well as in Wales, Scotland and Northern Ireland gets under way tomorrow with 10 companies planning to bid.

The Government's auction of high bandwidth fixed wireless licences in 11 English regions as well as in Wales, Scotland and Northern Ireland gets under way tomorrow with 10 companies planning to bid.

Fixed wireless communications uses radio signals to distribute two-way broadband network capacity through the airwaves.

Non-urban businesses and home-based workers will be targeted with the service, which will offer fast always-on access to the internet. Home workers, for example, could access corporate local area networks. Video conferencing and other data-rich applications such as Web serving will also be facilitated by fixed wireless.

The spectrum auction has a reserve price of £78m for the 42 licences on offer. Three licences will be awarded in each of the 14 regions.

The slump in telecoms equity and bond markets, which saw the auction rescheduled from last month, is thought to have dented how much the auction can raise. Analysts believe the fixed wireless licence sale may generate several hundred million pounds - a tidy sum, though far short of the £23bn raised in the spring mobile spectrum sale.

It is believed that four bidders - including Winstar Communications, Energis Local Access, and Broadnet - are planning to bid for licences in all 14 areas. Six of the other seven players are thought to be interested in winning particular regions.

Winstar underlined its ambitions yesterday when it secured a comprehensive $1bn (£690m) financing package. That included a $270m equity injection funded by Microsoft, Compaq, CSFB Private Equity and Welsh Carson, an investment bank. The three other leading bidders are backed by telecoms and media firms.

Competitive local exchange carrier, Energis, is well placed to fund bids for a national footprint, while Broadnet is wholly-owned by Comcast, a leading US cable operator. Chorus Communications is jointly owned by Liberty Media, the content arm of AT&T, and Independent News & Media, publishers of The Independent.

Winners are obliged to provide services that cover 10 per cent of businesses in a licence area by 2002. The Radio Communications Agency is using an online bidding system on dedicated telephone lines.

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