Virgin Media could corner Wimax links

Virgin Media is reported to be front runner in an auction for broadband provider Pipex - a purchase that could benefit Wimax wireless access in the UK.

Comment on the possible deal has focused on the fact that it would give Virgin Media, formed by the recent of merger of Virgin Mobile and cable operator NTL/Telewest, an extra 570,000 fixed-line broadband customers.

But it seems that the deal may include Pipex Wireless, a company formed jointly with Intel to set up services based on the wide-area wireless technology. Pipex Wireless owns scarce spectrum that can be used for fixed Wimax links, but could potentially be used for mobile access.

A Pipex spokesman said it was not yet decided whether the Wimax spinoff would be sold with the parent – nor indeed whether Pipex itself will be sold.

Virgin Media, now the single biggest broadband provider in the country, does not own mobile infrastructure. But it resells mobile services under its own brand, allowing it to offer so-called "quad play" services - mobile, broadband, television and fixed-line telephony.

Pipex Wireless, with a powerful partner in Intel, would give it a chance to build a rival high-speed mobile and fixed infrastructure in lucrative city areas, competing with 3G and GSM services as well as fixed broadband providers.

Fixed Wimax would also allow Virgin Media a relatively low-cost way to offer broadband access in areas not covered by cable. Wimax could also become important as a fallback technology, providing alternative access for companies if their ADSL or cable links goes down.

Carphone Warehouse, Sky, Tiscali, BT and Orange have also been named as possible bidders for Pipex. The auction ends on Friday.

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