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UK Broadband Gets Go-Ahead for Mobile WiMAX Services

PCCW subsidiary scores victory in plans to provide mobile broadband services across Britain

December 13, 2007
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WiMAX operator UK Broadband, a subsidiary of Hong Kong giant PCCW, has scored a major victory in its often tortured plans to provide mobile broadband services across Britain. The UK regulator, Ofcom, has said it will amend the provider’s 3.4GHz license to allow full mobile hand-off, enabling the company to offer a wider range of services on its Mobile WiMAX network.

This is an important decision that may set precedents elsewhere in the EU. With this move Ofcom becomes the first European regulator to recognize the decision made in Geneva last week at the World Radio Conference designating 3.4-3.6GHz as IMT mobile spectrum.

Such changes are particularly important to the prospects for alternative European carriers - those using WiMAX to support disruptive models - because of the power of the 3G community. Question marks remain over Mobile WiMAX adoption by operators who acquire 2.5GHz licenses from next year, since this is likely to be deployed mainly for HSPA and LTE. All this despite recent regulatory moves towards technology neutrality and the sanctioning of 802.16e as an IMT2000 system. This uncertainty in one of WiMAX’ key licensed spectrum profiles leaves the other band (3.4GHz-3.8GHz) in a particularly important position in Europe. This is because despite its inferior propagation qualities compared to those of lower frequency bands, UK Broadband argues that because spectrum is cheaper and capacity better, the economics of 3.5GHz WiMAX can be attractive.

However, the obstacle in its path has been that most European nations set aside 3.5GHz for fixed broadband wireless only. Although most authorities have been willing to tolerate - or unable to police - nomadic usage without hand-off, the move to permit mobility has been far slower. This lag is primarily because of opposition from cellcos, which have argued that they paid vast sums for their 1.8/1.9GHz licenses on the basis that no other operators would be allowed to compete in full mobile broadband services. However the tide is changing as EU authorities come into line with the view held by the FCC and others that the division between mobile services and broadband wireless is sufficiently blurred to make old distinctions meaningless. So far Spain, Hungary and Portugal have allowed mobility in 3.5GHz, with Austria also making limited concessions. Now the UK is set to follow suit along with Italy, when it auctions these licenses in 2008.

Whether it persists with plans to offer services across the nation, or is more concerned with boosting the value of its spectrum and network assets prior to a much rumored sell-off, UK Broadband will benefit from being able to offer mobile hand-off. The other operator in this band, Pipex, which has a national license in 3.6GHz, recently emerged from inactive mode and put its spectrum into a joint venture with Intel. UK Broadband acquired its spectrum at low cost – the regulator issued only regional licenses, prompting BT to sit the auction out, and allowing PCCW to acquire licenses, under various company names, for all 15 regions. Having entered the market with aggressive plans for nationwide roll-out of a service that was then based on IPWireless’ TD-CDMA platform, PCCW then pulled in its horns and opted for a gradual expansion that has only reached the Thames Valley region west of London. In the past two years it has taken a higher profile again, planning London services and making a technology switch to Mobile WiMAX.

The provider originally petitioned Ofcom in 2006 for permission to operate its license at higher power levels and allow for the use of mobility. It said that the higher power levels were required so the company could employ 802.16e. It will now show the green light to full build-out plans and is already talking to potential suppliers. In December 2006, UK Broadband asked Ofcom to change its licenses so that all 15 regions were covered by a single license. Ofcom agreed to this in March 2007.

In a research note, investment bank Dresdner Kleinwort said that the license amendment will allow UK Broadband to “sell broadband you can use anywhere.” This is currently not available from any DSL provider, except using Wi-Fi convergence (though 3G operators would class their offerings as mobile broadband of course). The bank believes the decision will cause problems for BT, Virgin Media and others because of the attractiveness of a personal broadband offering. In Australian cities, WiMAX operator Unwired Australia saw 50% better uptake of its broadband services at the same price points, compared to incumbent Telstra’s, because it offered a portable device (not even fully mobile).

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