Unwired hit by credit crunch

News has surfaced in Australia that Unwired, a wireless broadband provider in Sydney and Melbourne, is struggling to find enough cash to pay for its planned nationwide mobile WiMAX network.

According to an interview given by David Spence, Unwired CEO, the projected cost of mobile WiMAX rollout, which was estimated at A$200m last year, has gone up by 10-15 percent in the wake of the credit crunch and more expensive capital.

While Spence insists the proposed WiMAX network is not facing cancellation by the company’s owners, Seven Networks, Unwired’s emphasis is now on trying to reduce the costs of the network by between A$20m and A$30m.

Unwired, in commercial operation since August 2004, has 3.5GHz and 2.3GHz spectrum assets at is disposal. It currently uses ‘pre-WiMAX’ equipment from Cisco (Navini) in Sidney and Melbourne (at 3.5GHz), but it is not clear how much of that can be software-upgraded to the mobile WiMAX standard.

In August 2005, Intel invested A$37m in Unwired with a view to converting its Sydney and Melbourne networks to mobile WiMAX and extend its presence to other cities, including Canberra, Brisbane, Adelaide and Perth. But the project has been delayed with the lack of mobile WiMAX certification progress at 3.5GHz usually cited as a main reason.

Last December, Unwired narrowed down its choice of WiMAX suppliers to Huawei and Motorola.