Eircom, Chorus and Energis have obtained licences to run high-speed Internet services in Northern Ireland in an auction for broadband fixed wireless licences in the UK.

The companies fought off competition from Formus Communications, which holds a similar licence in the Republic. Each company will pay between £150,000 to £160,000 sterling (€251,298 €268,052) for the licences.

Formus withdrew yesterday, citing concerns over the cost of the licences. Mr Bernard Dvorak, chief executive of Formus Communications, said the company was "not a fan of auctions" and had withdrawn because of tough competition. The withdrawal of the US-based company brought an early end to the auction for 42 licences in 14 UK regions which has proved a dismal failure for the exchequer. The total amount raised was £38,160,000, well below the £1 billion which telecoms analysts had predicted. Telecoms experts blamed current stock market volatility for telecoms companies, the unproven nature of the technology and the design of the auction as the main reasons for the auction's failure. Broadband fixed wireless technology enables telecoms operators to beam high-speed Internet and multimedia to buildings via radiowaves. It is an alternative to wired connections, which often take time to install and are not viable in some rural areas.

A British Department of Trade and Industry spokesman denied the auction had been a failure. "It has not been about the proceeds; rather we wanted to give licences to bidders who want to use them," he said. Under the terms of a "use it or lose it" clause, successful bidders have until June 2002 to roll out broadband fixed wireless networks which can support 10 per cent of business units within their region.

However, it is likely that large regions of the UK will not be covered by broadband wireless local loop technology due to a lack of interest in the auction. Half the regions in the UK received no bids during the auction.

Last night Britain's e-commerce Minister, Mrs Patricia Hewitt, ordered a report on the auction to plan for future spectrum allocations and examine the scope for awarding unsold licences.

Northern Ireland proved to be the most competitive region in the auction due to its low reserve price of £100,000 sterling. London had the highest reserve price of £4 million.

Eircom and Chorus will now be in a position to offer an all-Ireland broadband fixed wireless network, as they hold similar licences in the Republic.