Competition to award Internet licences dropped due to a lack of interest

 

A competition to award three high-speed Internet licences has been cancelled by the telecoms regulator, Ms Etain Doyle, due to a lack of interest.

Ms Doyle confirmed yesterday no applications for two broadband and one narrow-band licence had been received before the competition deadline last Friday.

This is the second Irish telecoms competition within a fortnight to attract no bids amid an escalating cash crisis within the telecoms sector. Anaylsts said last night debt was increasingly an issue for telecoms companies. "It is becoming harder for companies to justify the business case for such technologies," said one analyst.

The three fixed wireless access licences would enable telecoms companies to beam high-speed Internet services into buildings through radio waves. Several telecoms companies, including pan-European operators Formus Broadband, Winstar Europe and Priority Wireless, responded to a consultation but failed to submit bids.

Earlier this month Formus Broadband criticised the regulator for charging a fee of £750,000 to enter the comparative selection licence contest.

Contacted yesterday, Mr Charlie Ardagh, director of communications at Formus, said it was a pity the price was set too high. "Radio spectrum is a national resource so if it isn't used then the public doesn't get the benefit." A spokeswoman for the regulator said the situation would be reviewed in the new year but stressed that fixed wireless technology would be available in the Republic.

"We have already awarded six fixed wireless licences and some of these are already up and running," she said.

Eircom and Chorus hold broadband licences and narrow-band licences while Formus and Esat have been awarded broadband licences. These technologies provide Internet connections without having to dig up roads and lay cable. However, the business case is still relatively unproven.

A regional fixed wireless auction in the UK ended in failure last month when the government raised only a fraction of projected revenue and many licences were not taken up by operators. Earlier this month a competition to award a terrestrial trunked radio licence - mobile communications over both public and private networks - was also shelved due to lack of interest. The regulator is currently reviewing this issue.