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4G/3G/WiFi

Pipex Plans Urban WiMax Rollout

British ISP Pipex Communications plc is taking its WiMax strategy to the next level. It says it will roll out wireless broadband connections of up to 8 Mbit/s in 50 U.K. towns and cities by 2009, starting in Manchester later this year.

The operator included the new details in its 2006 earnings announcement issued this morning, when it reported an operating loss of £11.5 million (US$23 million) from revenues of £294.4 million ($590.4 million). (See Pipex Reports 2006.)

To date, the ISP's joint venture with Intel Corp. (Nasdaq: INTC), Pipex Wireless, has engaged in small WiMax trials, the latest of which is just being set up using equipment from Nokia Networks . (See Pipex Picks Nokia Siemens for WiMax Pilot.)

In the earnings report, Pipex executive chairman Peter Dubens is quoted as saying: "Following further trials being conducted in Warwick, we look forward to the first full-scale roll-out of these services in Manchester in the fourth quarter."

Manchester is the U.K.'s sixth most populous city, with more than 440,000 residents in the city itself and more than 2.2 million in the greater metropolitan area. Taking WiMax to Manchester is a considerable step up from the trials conducted so far, which have involved just three or four base stations and a few hundred trialists.

But that's as much detail as Pipex is releasing at present, and it's not commenting on how much it will need to spend to take wireless broadband to 50 markets in the next 20 months, as planned.

The company did note, though, that Intel Capital has added a further £10.2 million ($20.5 million) to the Pipex Wireless piggy bank, while Pipex itself has added £2 million ($4 million) to the venture.

Gabriel Brown, chief analyst at Unstrung Insider, is still skeptical, "not about the technology, but about the market demand in the U.K.," where fixed broadband is already available to nearly the entire population and mobile coverage and uptake is saturated.

He wonders what sort of applications Pipex is planning and the customers it will aim to attract. "The best way I could see it working is to get some kind of tie-in with local government," says Brown.

Another question is what will happen when additional spectrum, which could be used for WiMax services, comes up for auction in the U.K. later this year. Brown says the 2.5GHz spectrum being made available by the U.K. government is "way better" than the 3.5GHz Pipex has at present, although it's not that much better to make it a "must have" at any price when the bidding begins.

Brown also doubts that the major players, such as the large mobile operators and BT Group plc (NYSE: BT; London: BTA), will "leave the door open to a new entrant with new flash technology," and that Pipex will need to have its deepest purse at hand if it wants to bag some new wireless capacity.

Pipex, which now has 570,000 DSL customers, also commented briefly on its other key issue -- its potential acquisition. The company is exploring "strategic options," and says "a further announcement will be made in due course." BT is the early betting favorite to snap up Pipex.

— Ray Le Maistre, International News Editor, Light Reading

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