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Woosh Wireless says it could potentially lose all of the radio bandwidth it has acquired for mobile phone and broadband following a Government decision to carve-up the spectrum and put it up for auction.
The Ministry of Economic Development said yesterday it will auction off the wireless broadband spectrum, called Wimax, in early 2007.
Woosh has spent several million dollars acquiring management and usage rights to Wimax spectrum in the 2.3 GHZ band so it could build a nationwide wireless network and go into competition with Telecom and Vodafone.
Woosh had grown its stake of the spectrum to 50 per cent, saying it needed that amount to deliver a competitive range of IPTV (internet TV) and web services.
Woosh chairman Rod Inglis, who was "surprised" by the Government's decision, said it would need to buy all the spectrum again in the auction or "lose it".
Inglis has said that funding for Woosh's network was dependent on the Government rejecting the ministry's proposal.
Inglis would not comment on whether funding would continue for Woosh but said its "investors had to decide how much they would pay for the spectrum".
He was disappointed with the Government's decision. He had hoped it would encourage Woosh by deciding against the proposal.
In the auction the 2.3 GHZ band will be divided into three separate lots of 30 megahertz. Bidders can buy a maximum of 30 megahertz each, which they can use for two years. Holders of spectrum rights would be required to use the spectrum within a "specified time period".
Callplus Wimax service Blue Reach general manager Graham Walmsley said it welcomed the Government's decision.
But he believed the ministry still needed to put in further limitations to stop Vodafone and Telecom buying the majority of the wireless spectrum.
Vodafone and Telecom had "deep pockets"and the ability to "sit" on the spectrum without using it to deliver a specific nationwide Wimax service.
Minister of Communications David Cunliffe said it was critical to create the right conditions for the future deployment of Wimax by giving a wide range of players the opportunity and the certainty they need to make a long-term investment.
