Fixed wireless access technology has failed to take off as a mechanism to deliver broadband, but that could soon change, reports Jamie Smyth, Technology Reporter

More than four years after the Commission for Communications Regulation (ComReg) awarded fixed wireless licences to companies operating in the Republic, there are still only about 1,000 customers using it to receive broadband services.

Fixed wireless access technology enables firms to beam high-speed internet services and telephone calls to business and consumers from transmitters. It is being used by Chorus and Eircom to supply telephony to about 5,000 people but has so far failed to take off in Ireland as a broadband delivery technology.

But this could all change shortly if the eight companies awarded local fixed wireless licences last week by ComReg manage to create viable businesses.

ComReg has issued a first tranche of 59 licences to companies that will enable them to use the 3.5 gigahertz (GHz) band to provide internet or telephony services to regions. Over the next few months it will award further licences to companies in an attempt to spur competition in the broadband internet market.

The successful bidders for the licences include new entrants to the Irish market such as Net2Cell and Real Broadband, as well as more established firms such as Chorus and Leap Broadband.

Each successful operator has a week to confirm whether it will take up all the licences that it was offered in the competition. If it does not take up a licence in a particular region, ComReg will offer that licence to a losing bidder.

"Fixed wireless access provides a real alternative to existing phone and internet providers and it is intended to benefit residential and business users in urban and rural areas," says Ms Etain Doyle, chairperson of ComReg, who formally announced the winning bidders for licences last week in Dublin.

If Ms Doyle is right, the introduction of fixed wireless could shake up the broadband market. Digital Subscriber Line (DSL) is currently only available to about 60 per cent of the public and is quite expensive at €50 per month. This compares to the €30 price that wireless providers such as Irish Broadband, a subsidiary of NTR, is currently offering in Dublin.

Fixed wireless technology is also particularly useful for areas where competing technologies such as DSL or cable modems are not available. This could provide a boost to the availability of high-speed internet to regional towns.

Mr Daragh Stokes, managing director of consultancy firm Hardiman Telecommunications, says there is a business case for the service because of the number of people who live outside the 3-4 km distance to an Eircom exchange that is required to receive DSL.

"It is certainly a very appropriate service for some towns in Ireland where transmitter cells will cover 12 kilometres," he says. "It should be able to provide speeds equivalent to DSL of about half a megabyte."

But considering the tumultuous history of fixed wireless over the past four years, consumers could be forgiven for adopting a cautious approach.

In 1999, when the first fixed wireless licences were awarded by the telecoms regulator, it was predicted that the technology would take off quickly.

One telecoms company, Mr Declan Ganley's Broadnet, even took the regulator to court disputing the decision not to award it a licence. However, less than a year later the market crashed and Mr Ganley must have been thankful he did not win a licence.

Formus, a multinational firm which partnered with an Irish firm owned by brothers Messrs Rory and Charlie Ardagh, went into liquidation in 2001 after running out of cash.

And Chorus and Eircom either halted or slowed down their introduction of the new technology, blaming the high cost of the equipment required at customers' premises to enable fixed wireless technology to work.

Mr Stokes blames the tough criteria insisted upon by the regulator for companies' failure to use their licences.

"The regulator took a national approach, similar to the GSM mobile competitions, but this was an inappropriate model due to high costs."

Mr Willie Fagan, director of regulatory affairs at Chorus, agrees with this assessment.

"A few years ago, fixed wireless equipment cost as much as €5,000 for each customer's premises.

"Equipment for 3.5 GHz now costs significantly less than this," he says.

Chorus had planned to use a licence operating in the 26 GHz band to offer broadband but has now decided to use the 3.5 GHz band because it is cheaper. It already uses the 3.5 GHz band to provide telephony to about 5,000 customers, although it has only signed up 200 broadband users for the technology.

This year ComReg revoked Chorus's fixed wireless licence in the 26GHz band for failing to introduce its network according to the terms of its licence. This freed up enough spectrum for the recent licence competition.

Chorus won the greatest number of regional licences in ComReg's recent competition - some 15 in total - but the company will continue to take a cautious approach to introducing the technology, according to Mr Fagan.

"We wouldn't have applied for the licences if we didn't believe it could work but we will look carefully at the business investment case in all the licence areas," he says.

The high cost of customer equipment was undoubtedly a factor holding up the introduction of fixed wireless technology but Mr Rory Ardagh, founder of fixed wireless firm Leap Broadband, believes competition has also been stifled by some of the big operators that won the first licences in 1999.

"Arising from the first national award of spectrum, Eircom and Chorus had cornered the market in 'wireless DSL' by hoarding, effectively unused, the 3.5GHz spectrum," says Mr Ardagh, who set up Leap Broadband following Formus's liquidation in early 2001.

The Ardagh brothers lobbied to have the original fixed wireless licences revoked to free up spectrum to enable them to provide a service.

"When they \ pulled out of Ireland, Charlie and I never gave up on the potential of wireless broadband to deliver services to Irish businesses," says Mr Ardagh. "We raised capital from experienced telecoms investors and started again from scratch."

Leap Broadband has been providing business customers in Dublin with high-speed internet services for more than a year, using unlicensed spectrum in the 2.4 and 5.8 GHz bands. But in the recent competition it has picked up seven licences in the 3.5 GHz band.

The 3.5 GHz band will enable Leap Broadband to expand the distance that its signal can travel to 15 km and improve the quality and speed of its internet service that it provides to customers .

Similarly, Louth-based firm Digiweb has been offering fixed wireless broadband using unlicensed spectrum since last year. Mr Colm Piercy, Digiweb managing director, says the new 3.5 GHz licences should protect the company's service from interference.

He is also hopeful because there is huge demand for broadband now compared to 1999-2000.

Certainly, the huge interest in the competition - there were a total of 12 firms that bid for licences - and the interest of NTR-backed firm Irish Broadband in the wireless market suggests that it could get off the ground this time.

Whether there will still be 12 players competing in the market by next November remains to be seen.