Italy WiMax auction sets European record

By Philip Willan, IDG News Service |  Mobile & Wireless

The auction of 35 licenses will raise a European WiMax record of €136.3 million
(US$205.8 million) for the Italian government, Communications Minister Paolo Gentiloni
announced Thursday. The ninth round of bidding concluded Wednesday, with bids
showing a 176 percent increase on the starting offers, the minister said.

The biggest winner in the auction was the relatively little-known AriaDSL SpA,
which secured licenses in all Italian regions for a total of €47.5 million,
the Communications Ministry said. The company is reportedly controlled by Israeli
billionaire David Gilo, founder of Vyyo, a Norcross, Georgia, company selling
equipment for wireless high-speed data connections to businesses and homes.

The second-biggest spender was AFT SpA, a company providing WiFi hotspots around
Italy, which paid €34.4 million for licenses in all Italian regions. The
former telecom incumbent Telecom Italia snapped up licenses in central and southern
Italy for a more modest €13.8 million. Former Prime Minister Silvio Berlusconi’s
Mediaset media group, Wind and Fastweb were among the major players to pull
out before the end of the auction.

The auction of the WiMax (Worldwide Interoperability for Microwave Access)
3.5GHz radio frequencies, previously used for military communications, is intended
to combat the digital divide in Italy and encourage the entry of smaller companies
into the telecom market. The technology, which delivers speeds of 3M bits to
5M bits per second for downloads and 1M bits to 1.5M bits for uploads, is considered
ideal for bringing mobile broadband communications to remote rural and mountainous
areas.

Some 4.2 million Italians, or 7.5 percent of the total population, are still
cut off from broadband Internet access, according to the Communications Ministry.
The terms of the WiMax auction obliged bidders to explain their plans for introducing
the technology to the country’s Internet black spots.

"The market geography to emerge from this auction is extremely positive,
because it shows we have competition, a significant number of players and sizeable
investments," Gentiloni told reporters in Rome. "The conclusion of
the WiMax auction is a milestone on the road to the removal of the digital divide
and to guaranteeing access to high-speed Internet as the new universal service
of the 21st century," he said.

WiMax auctions in France and Germany recently raised €125.8 million and
€56.1 million, respectively. Italy’s licenses run for 15 years and
are renewable, but cannot be sold without Communications Ministry approval.

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