AOL ponders wireless service in the UK

AOL is considering a partnership with the newest entry to the market for wireless data services, UK Broadband

Internet service provider AOL UK is looking to launch a high-speed wireless Internet access product in the UK, a move that has the potential to turn Britain's broadband market on its head.

The ISP hinted at the move earlier this week, when it announced that it was "currently working on a number of new products and services, including video-on-demand, 2Mbps broadband, extended voice over IP services and wireless broadband connectivity."

It is understood that AOL wants to use wireless as an alternative way of bringing broadband to its customers, and it may be teaming up with wireless operator UK Broadband.

UK Broadband, a subsidiary of Hong Kong telco Pacific Century CyberWorks, controls the 3.4GHz frequency in Britain. It is currently rolling out its wireless network, starting in the Thames Valley.

An AOL UK spokesman would only say that the company is "looking at all the options" when planning its broadband future, but it would appear to have few options beyond UK Broadband. No other company has, or is building, a broadband wireless data network covering most of the United Kingdom. UK Broadband refused to comment on whether it was in talks with AOL UK.

"It's far too early to speculate on what may or may not happen," said a UK Broadband spokesman.

UK Broadband has said it will sell 512Kbps and 1Mbps services directly to customers. A deal with a major ISP such as AOL would mean that UK Broadband would act as a wholesaler, with the ISP reselling UK Broadband's various products.

This could encourage UK Broadband to roll out its service more quickly. Potential resellers will not be keen to repeat the experiences of trying to sell BT Wholesale's ADSL service when it was only available to around two-thirds of the population. Such a deal would also bring much-needed extra competition to Britain's broadband market.