Tele2 extends broadband fixed wireless service

Wireless broadband provider Tele2 shed a ray of light into an otherwise dull broadband landscape on Tuesday as it announced it is extending its network.

Currently available in Nottingham, Leeds, Leicester, Bradford and Reading, Tele2 announced at the Internet World conference in London that it is to extend its reach. Over the next 12 weeks, consumers and businesses in Birmingham, Coventry, Bristol, Bath, Newbury, Guildford, Sheffield and Slough will also be able to get their hands on the wireless broadband service.

Tele2 is one of the first broadband fixed wireless services in the UK and has a tiny subscriber base of just 2,000 consumers. While wireless is slower than ADSL and cable, it can also work out cheaper -- for £19.99 a month Tele2 customers get an upload and download speed of just 150kbps. The premium service -- £34.99 a month -- offers 512kbps.

But Ovum analyst Yum Petkovic believes the pricing is an issue. "For £20 a month you would expect a bit more speed than 150k," she said. She is not convinced that broadband fixed wireless is going to be anything other than a niche player in the broadband market. "There are terrains and topography that it isn't suitable for and it's really an urban solution as you need tall buildings and a clear line of sight."

The government is keen to push broadband fixed wireless solutions and following the disastrous spectrum auction last summer is preparing to re-auction licences this summer. However while Tele2 can offer service up to 20 kilometres from the base station, the spectrum on offer from the government will cover far smaller distances.

"There were issues about which spectrum the government would use. It has decided on that which is commonly used in Europe. It is high-speed but the trade-off is the distance," explained Petkovic.

Tele2 thinks this means there will not be a suitable radio spectrum to roll consumer services out with. And while it means less competition for them won't be good news for consumers. "There are multiple licences going but users have to be close to base stations and it isn't going to cost-effective to build thousands of base stations," said a Tele2 spokesman.

Is broadband coming to your neighbourhood? Find out the latest in ZDNet UK's Broadband News Section.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Telecoms forum.

Let the editors know what you think in the Mailroom. And read other letters.