WiMax provides high-speed, point-to-point connections via radio. It is an alternative to fixed wires. But it uses the same part of the spectrum that 3G mobile networks use.
While the auction ramps up, mobile network operators are also testing high speed packet access (HSPA Plus).
Theoretical rates on 3.5G high speed download packet access (HSDPA) links top out at around 14.4Mb/s, but HSPA Plus offers 42Mb/s. In practice, speeds are likely to be much lower. The minimum speed on HSDPA can be as low as 64kb/s, while the minimum speed on WiMax is more like 1Mb/s.
The industry is split as to whether there is sufficient demand for new spectrum.
Gerard MacNamee, CTO of UK Broadband , says: "There are people who will never have a fixed line to their house. How do they get a link? It isn't via (fixed line) broadband DSL.
What Ofcom is thinking is that every broadband line is the same, and every service is the same, and it's not."
UK Broadband, a subsidiary of Hong Kong-based PCCW, has rolled out a plug-and-play wireless broadband network based that supports both packet and circuit-switched links in the Thames Valley and some parts of London.
In February, Ofcom changed its 3G licence to support the mobile version of WiMax (16e). "We'll convert existing network to mobile 16e. We're waiting to see what the 2.6GHz auction yields," Gerard MacNamee says.
But fixed broadband is already well-established in Europe, says Margaret Hopkins, an associate at Analysys Mason. "Densely populated parts of Europe and parts of Eastern Europe are very well supplied with fixed infrastructure and they're also getting broadband rolled out over the 3G network. In the Czech Republic there's been a big take-up of WiFi, but that's an exception."
However, real-world broadband speeds tend to be lower than advertised ones. The problem is contention, says John Earley, head of strategic development at Manchester Metronet. John Earley believes both WiMax and 3.5G are temporary and unsatisfactory. Users have to contend with each other for bandwidth at the base station, he says. His company's 5GHz technology offers the radio equivalent of a non-contended leased line link, which makes it attractive to corporate customers.
The other caveat is coverage. Mobile 3.5G providers pretty much blanket the country. Right now, WiMax and WiMax-style services cover a few main cities such as Manchester, Liverpool, Dublin and Birmingham. That limits their utility to, well, utilities and local firms that need only local high speed links.
"In the UK, we've been waiting for WiMax technology to mature," says Graham Currier, business development director at
Freedom4, the joint venture between Pipex and Intel Capital. In Manchester, Graham Currier is offering wireless services based around WiMax protocols in the 3.5MHz band, and has made its basestations mobile-ready.
"SMEs are ideal candidates," he says. "The service is equivalent to a sub-leased incumbent's SDSL line. It's not a solid 10Mb link (but) it's fairly serious bandwidth, a couple of megabits per second up and down, and a ten to one contention ratio," he says.
This might also appeal to businesses as a back-up link for business continuity purposes.
While wireless players prepare for the 2.6Ghz licence auction, there is yet another G on the horizon - 4G. This purely internet protocol (IP)-based technology also operates in the 2.6Ghz band but offers peak download rates in the hundreds of Mb/s range. It is also compatible with earlier mobile standards. This means a user will switch undetectably between 3.5G and 4G cells on the move.
TeliaSonera announced last month it will build a 4G network in Sweden, but 4G's UK debut depends on who wins the local spectrum auction. It is easy to see existing mobile network operators moving to 4G if they have the right frequencies, but they may have to fight the WiMax networks for licences.
It is a battle Ofcom and the government hope will repeat the windfall from the 3G auction. For users, the prospect of continuing highly priced wireless calls is less enticing.
Wireless network technologies work at different speeds. As a rule of thumb, a mobile telephone call requires at least 64kb/s. WiFi provides theoretical bandwidth of up to 54Mb/s when using the 802.11g service. The as-yet unratified 802.11n service will boost that to 600Mb/s. In urban WiFi conditions, those data rates are likely to be much lower. Much depends on contention rates and 'cut through' rates (how many router hops exist in a meshed WiFi network before signals reach a backhaul link).