Formus exit may spur spectrum sale

The bulk of New Zealand's broadband radio spectrum could soon again be up for sale. Formus Communications, the Denver-based company which holds the licences, has closed its Auckland-based New Zealand office and exited the New Zealand market after it failed to obtain broadband spectrum in a government auction in Australia in February.

The bulk of New Zealand's broadband radio spectrum could soon again be up for sale.

Formus Communications, the Denver-based company which holds the licences, has closed its Auckland-based New Zealand office and exited the New Zealand market after it failed to obtain broadband spectrum in a government auction in Australia in February.

Bernie Dvorak, Formus's chief financial officer, says, "We are currently exploring alternatives with respect to this licence, possibly including a sale. However, we have not taken any action as yet. Given the activity in the Australian market with respect to the various players, we're holding tight for the time being."

Ron Buckman, who headed the Auckland-based operation, has now returned to the US. He says Formus will probably sell its New Zealand spectrum and adds that the company has no plans to bid on the lower radio frequencies (2GHz) that are due for auction later this year.

Formus entered the local market in February 1998 when it bought five of the six lots of 26GHz to28GHz radio spectrum auctioned by the Ministry of Commerce for $2.6 million. It planned to deliver LMDS (local multipoint distribution services) such as high-speed Internet access and networking. LMDS is also suitable for digital television. Given that the technology for delivering LMDS is now more advanced, the spectrum would have increased in value since Formus bought it.

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