Intel invests in U.K. WiMax venture

Chipmaker pumps $25 million into joint venture with Pipex to provide WiMax to homes, businesses and others in U.K.

Intel Capital is putting $25 million into a joint venture with ISP Pipex Communications to promote the use of long-range wireless broadband technology WiMax.

The fruit of the union, to be named Pipex Wireless, will provide WiMax access to homes, businesses and public sector organizations in U.K. metropolitan areas. London and Manchester will be the first cities to see a WiMax deployment from the new company, in 2007.

Pipex Wireless plans to roll out WiMax in the U.K.'s top eight population centers during 2008 and hopes to eventually sell its services in the top 50 metropolitan areas.

Pipex Wireless already has a license to operate WiMax services in the 3.6Ghz band. The license is an inheritance from Pipex Communications, which started trials for the technology last year in the Stratford-on-Avon area.

Intel Capital and Pipex Wireless are now evaluating candidates for the position of CEO.

Intel launched its first WiMax chip, Rosedale, last year, saying that the next 100 million Internet users will get their connectivity through technologies such as WiMax.

The chipmaker already has other WiMax rollouts under its belt, including a citywide network in Taipei, and says it will be helping out Pipex Wireless by giving advice on trial deployments, partner introductions and market activities.

While industry watchers believe WiMax has potential for supplying Internet access in rural areas or as backup equipment, some have been skeptical the technology will take off in metropolitan areas or countries with existing broadband and wireless infrastructure.

Jerome Buvat, global head of Capgemini's strategy labs, told that WiMax is likely to have a hard time competing with both existing unbundled DSL and mobile networks.

"I think WiMax raises a lot of interest because it promises to solve some of the limitations of Wi-Fi, but in the short and medium term WiMax is unlikely to have a big impact" due to issues of cost and speed, he said. "There are many operators testing the technology, but the trials haven't been very successful. In urban areas, it's not cost-effective."

Jo Best of reported from London.

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