Intel / Pipex WiMax Challenge to 3G in UK

Europe UK : Pipex Communications formed an alliance with technology giant Intel to provide a wireless alternative to 3G in major UK cities.

Intel Capital, Intel’s venture capital investment organization, and PIPEX Communications PLC, a major United Kingdom-based telecommunications provider, announced that they have jointly formed PIPEX Wireless, a wireless operator which will provide broadband services in major metropolitan areas. These services are designed to meet the needs of consumers, enterprises and governments for wireless broadband, including citywide “hotspot” wireless access.

Intel Capital is investing US$25 million in the new company. PIPEX has transferred its entire 3.6GHz UK spectrum license to PIPEX Wireless to deploy services based on WiMAX (Wireless Interoperability for Microwave Access). WiMAX is a broadband wireless technology designed to provide Internet access over long distances. Intel and PIPEX are the company’s only shareholders.

“WiMAX technology improves the economics of broadband access by lowering costs and providing exciting new service models for customers,” said Arvind Sodhani (inset), Intel Capital president. “This investment is part of Intel Capital’s continued effort to deploy broadband access globally using competitive WiMAX-based technology solutions.”

William Kilmer, managing director of Intel Capital Europe, added: “PIPEX Wireless will compete in this new market by targeting customers who need more than just fixed broadband to the home or office, especially those who want a bundle of different access methods and value-added services. Intel Capital, through its relationship with Intel, plans to work closely with PIPEX Wireless, advising them on trial deployments, partner introductions, and go-to-market activities.”

“We see creation of this new wireless service provider as an incredible opportunity to provide new services to major cities in the UK,” said Peter Dubens, PIPEX executive chairman. “With a wireless service, PIPEX Wireless will offer unique broadband access and services that are very complementary to PIPEX’s existing business of DSL access, hosting and network access.”

Dubens will serve as chairman of the board of PIPEX Wireless, and the company has hired key personnel for the rollout of wireless services. The PIPEX Wireless board and Intel Capital are evaluating qualified candidates for the position of company CEO.

“We are excited by the prospect of investing along with Intel Capital as a shareholder,” Dubens said. “Intel’s relationship with PIPEX Wireless, its brand, industry knowledge and technical expertise makes Intel an ideal strategic investor to help us roll out new wireless services in the UK.”

“PIPEX will provide certain core services to PIPEX Wireless and resell some of the company’s wireless products to PIPEX customers,” Dubens noted.

PIPEX Wireless anticipates the roll-out of its network to begin in London and Manchester in 2007, and target the top eight population centers by 2008. The company is investigating several locations for trial deployments this year. PIPEX Wireless expects to eventually roll out wireless broadband services to the top 50 UK population centers.

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