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Author: Dan Bieler
Three months after the deadline for applications, the Federal Network Agency (BNetzA) has decided to launch an auction for the allocation of broadband wireless access frequencies (WiMAX). BNetzA opted for this form of spectrum allocation after it became apparent that applicants would not be able to agree on how to allocate the available spectrum amongst themselves. The auction process should be completed and the licences allocated by the end of the year.
Successful applicants will commit themselves to providing 15% population coverage by 2009, and 25% by 2011. The spectrum lies in the 3,400-3,600MHz range. The frequencies are spit into 16 regions, and frequency plots are available for up to three service providers in each region. Two of them are paired with 21MHz and one with 28MHz (although this does not apply in all regions).
Comment: Whilst in some countries, like Switzerland, there has been relatively little interest in WiMAX, things are different in Germany. BNetzA received 1,221 frequency applications from 102 service providers. There have been nine nationwide licence applications, although there are only three such national WiMAX licences available.
The high interest is somewhat surprising, given the highly competitive broadband landscape with a large number of competing offerings such as DSL, cable modems, powerline, satellite, WiFi, UMTS, HSDPA/HSUPA - and now WiMAX.
We believe that the main driver for WiMAX will be back-haul services and coverage of remote regions, as well as white spots in more populated regions. In addition to three strong, nationwide WiMAX providers, we would expect a number of partnerships to emerge to cater for regional demand.
Despite the high demand, we do not expect a similar heated scenario to the UMTS auction in 2000. Given the ongoing pricing pressure in the ICT market and the much reduced top-line growth rates - not to mention the unproven business case for WiMAX - we would predict a much more level-headed approach to the bidding process.
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