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BT gets green light to bid for 3G wireless

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British Telecom has been given the green light to bid for a third generation (3G) wireless licence, and to increase its stake in the UK's current number two player, Cellnet, beyond 60 per cent. The Department of Trade and Industry announced the relaxation of restrictions on BT in the wireless market this morning, effectively giving BT all it wants in the area, and unleashing a dangerous competitor on the UK market. The number of 3G licences granted in the UK is likely to be limited, and the existing four cellular players already have to take into account the likelihood of large bids from new entrants. BT has already said it wanted to bid for a licence, but that it has not yet decided whether to do so independently or via Cellnet. This stance puts a certain amount of pressure on the other Cellnet shareholder, Securicor, as the value of its stake is somewhat dependent on the way BT decides to jump. Current GSM providers are all aware that they may not be successful in bidding for 3G, or indeed that they may not be able to afford the going rate. They are therefore considering alternatives. Earlier this week, for example, German operator T-Mobil signed a deal with Ericsson to build a GPRS (General Packet Radio System) into its network. In the long term GPRS may not match the speeds of UMTS (the European 3G standard), but it can be seen as more evolutionary and more immediate than UMTS. The T-Mobil system will offer data at up to 115kbit/s, and Ericsson claims: "GPRS is a common step for both GSM and TDMA (IS-136) networks to handle higher data speeds and offer 3G packet capabilities." So you could say that GSM with GPRS could form an alternative to full 3G for quite a few years yet.

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