WiMAX player exits UK

UK-based communications firm and WiMAX operator the Daisy Group on Thursday offloaded its loss making WiMAX assets in the country for just £12.5m.

The WiMAX carrier operated under the name Freedom4 (formerly known as Pipex) with a national 3.6GHz licence for the UK. The buyer of Freedom4’s spectrum was rival WiMAX service provider UK Broadband, which is owned by Hong Kong’s PCCW. Daisy said the sale of the WiMAX licences will eliminate an annual cash outflow of £800,000, whilst the subsequent closure of the Freedom4 sub-group will save an additional £1m in cash per year.

When interviewed Brendan O’Rourke, COO at Freedom4, in 2008 as the company was ramping up its rollout, he said the firm’s strategy was as a niche player: “We don’t need a high subscriber take-up to make the business work. Typically, at the retail level, we need 85 end-users to one base station to start breaking even at an operational level.” That doesn’t seem to have happened.

As part of the shake up, the company has also disposed of loss-making wifi business from the same portfolio – Freedom4 WiFi, which has been sold to the existing management team for a nominal sum.

Matthew Riley, CEO of Daisy Group, said: “Our core strategy is to become the leading provider of unified communications to the SME and mid-market business customers. The WiMAX and wifi businesses were not core to the Daisy Group, and the disposals mean we can focus on our unified communications strategy, as well as improve cash flow.”

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