Austar, Unwired swap spectrum in $15m deal

Austar has agreed to trade some of its 2.3GHz spectrum licences to Unwired in a deal aimed at spreading interoperable wireless broadband further around Australia.

The deal meant Austar would swap some of its 2.3GHz spectrum licences to Unwired in return for some of the latter's 3.5GHz spectrum licences. Both companies were engaged in network rollouts across Australia, Unwired said in a statement.

"The licence boundaries will be redrawn with new licences issued. Unwired will also make a supplementary cash payment to Austar of $15 million," the wireless broadband provider said.

The agreement would see Austar holding 2.3GHz and 3.5GHz licences in areas that aligned roughly with its subscription television market in regional Australia, Unwired said.

John Porter, chief executive at Austar, said rationalising spectrum holdings into its regional markets put Austar in a position to develop plans to launch a broadband service.

"We have spent the last 10 years building a business that specialises in dealing with regional Australian needs, from our television service to mobile and dial-up internet services," Porter said.

"Wireless broadband is ideally suited to regional markets, and we want to build on our well established brand and operational capabilities to serve our regional customers."

Unwired would hold the 2.3GHz and 3.5GHz licences for most of metropolitan Australia, it added.

"The 2.3GHz and 3.5GHz spectrum bands are at the core of the planned WiMAX standard," Unwired said. "Unwired and Austar have agreed to ensure that any new network rollout would be compatible with the new standard."

WiMAX has been tipped to offer interoperable, long-range mobile broadband.

However, Keith Ondarchie and Ravi Bhatia of wireless broadband provider rival Access Providers pointed out that the standard is yet to be ratified.

Large additional investments may be required by companies that have leapt in early, finding out later that their equipment may not reach the eventual standard, according to Ondarchie and Bhatia.

Peter Shore, chairman at Unwired, said the companies would sign wholesale agreements with each other, allowing customers to roam nationally and ultimately internationally.

"As the networks are rolled out, Unwired would be able to sell a national service to all regions where Austar builds its network, in addition to its own city network and services, enabling Unwired wireless broadband customers to roam seamlessly from city to country and vice versa," Shore said.