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PCCW opens kimono (a little) on UK broadband wireless plans

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The smart choice: opportunity from uncertainty

When the UK’s 15 licenses for fixed wireless broadband ended up in the hands of a single viable bidder in May last year, most European and UK operators shrugged and said so what?

Pacific Century Cyber Works bought 13 of 15 licenses auctioned in the UK last year, by bidding through differently named subsidiaries and later acquired the companies that held the other two, all for a total cost of about $14m.

Now the complete dominance of a UK 3.4 GHz frequencies by subsidiaries of Hong Kong telco owned Pacific Century Cyber Works is an established fact, and apart from operations in unlicensed frequencies and the fact that it may soon be possible to sell, swap and barter spare spectrum in the UK, PCCW is set to own all WiMAX class services that are rolled out in the UK and it is likely to be a marketing leading trial copied by the rest of Europe.

We say WiMAX class because initial intelligence on PCCW had it that its new Netvigator service will in fact use the IP Wireless UMTS TDD technology that is a data delivery extension of 3G. Talking to the previously reticent PCCW in the UK this week Faultline discovers that actually the company is a fan of WiMAX and would much prefer to use it, but says that to wait for it would mean missing a huge opportunity in the UK.

And more than this it is also working with proprietary Navini equipment as well and has yet to choose between the two technologies for nationwide roll-out.

Navini has committed long term to deliver equipment that is WiMAX compatible and certified which means that it will be compatible with high volume Intel chipsets that are expected over the next few years, driving customer premises equipment down and down.

Vice President of Strategy for PCCW Paul Berriman said: “WiMAX is not a full, end to end system yet and if we went with WiMAX now, before the 16e version comes along, it would mean getting involved with aerials at the customer sites.”

The Netvigator uses a 6 inch by 5 inch by 2 inch device with a self contained aerial to pick up the broadband wireless signal, which effectively means that it is already portable, though not fully mobile. In order to offer a mobile service it would need handoff between base stations, which won’t be supported, as Berriman says, until 802.16e is ratified as a standard next year.

Vodafone has made noises about crying foul if mobility is ever implemented having paid billions of pounds for its 3G licenses. Berriman, although he doesn’t say that he is planning a mobile service, makes it clear PCCW can go that way if it chooses.

“Mobility is not specifically ruled out in our license, in fact the whole deal is silent on the matter. The only reference to “fixed” is in the title “Fixed Wireless,” and once the equipment has the capability to go mobile, we will look at it.”

In fact there remains a lot undecided about the service. Berriman says that there are lots of different roll out plans and when PCCW has collected all the evidence it will begin choosing between them, whether or not it becomes a rural service, if London and the South East is rolled out first, or if it goes nationwide in one go.

The impression he gives though it that all the decisions can be made this year and the service rolled out in very short order, perhaps a matter of a few months.

“We’re more focused on site acquisition at the moment and planning consents,” he said, “than finalizing strategy.”

PCCW bought some UK sites from the bankrupt international wireless broadband supplier Inquam, from its administrator as part of that site acquisition strategy for mounting base stations.

Another thing that is uncertain is just how much entertainment will be offered down the broadband connections. “At the moment we are just selling broadband access at £18 ($32) for 512k and £28 ($50) for 1 Megabit per second. We can make money on just that,” although he admitted later that this was not where the big margins existed and said that “PCCW will make money on content and transactions.”

“Sales of the Netvigator service are made over the internet, through telephone sales and by shopping mall demonstrations and the customers just buy the box take it home and it works.

“We promise they will be up and running within 24 hours of ordering,” said Berriman. In the UK broadband providers have been in the habit of weeks, if not months of delay for each home to go live. So are the famous television services that are delivered by PCCW in Hong Kong, where it is a wireline incumbent, going to be implemented over wireless? “They would be if we could offer 6 Megabits per second to 95 per cent of the population, like we can in Hong Kong,” he said.

“At the moment we are undecided about TV programs. We might multicast about six channels on one 10 Megahertz band, but video on demand, streaming different programs over a shared service eats up a lot of bandwidth and I don’t think we’ll be doing that. But we might be offering some programs as downloads”

In fact much of what the operator offers in Hong Kong is IP multicast through DSL, with some video file downloads and a small amount of streamed on demand video using the Microsoft VC 9 codec configured to stream over 800 kilobits per second. But it has developed several hundred thousand customers on its IP TV services and is regarded as one of the most successful such services in the world.

One thing that is certain to come out of the Netvigator service is a Voice over IP service. Berriman says that it wants to eventually bundle the VoIP technology into the Netvigator set top, but initially PCCW will just buy add-on phone technology available in the market place. “It’s not a question of if you do VoIP over a broadband service, but when. In Hong Kong we created the first digital network in the world and you have to be ready to sunset your old phone exchanges over a six- to-10 year period and move your network entirely over to VoIP, and that’s what BT will be doing here.

“We will set it up with various gateway services to PSTN and to cellular and for that there will be a delivery charge, but we expect to roll out VoIP when we roll out the nationwide service,” said Berriman, which he concedes might be as soon as the first quarter of 2005.

Copyright © 2004, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

Related stories

PCCW launches UK wireless broadband
WiMAX approaches tipping point with new specs and carrier support
PCCW buys Red Spectrum - sources

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