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Ruling in Argentina Halts Wireless Plans

The Argentine government's decision last month to revoke wireless-cable licenses stalled the rollout of several broadband projects, including some with U.S. backers.

Among them are Infotel Argentina S.A., a high-speed, fixed-wireless Internet and data-transmission provider that's 51 percent owned by Worldwide Wireless Communications Inc. (WGLS), of Oakland, Calif.; and Comsat Argentina S.A., another wireless high-speed-data provider wholly owned by Lockheed Martin Global Telecommunications of Bethesda, Md.

Both of the U.S.-backed companies held multichannel multipoint distribution system licenses in Argentina. But earlier this year, the year-old administration of President Fernando de la Rua froze the companies' wireless activities as it examined what to do with the licenses.

Infotel had acquired MMDS licenses for greater Buenos Aires and seven provincial cities. The company was set to launch in the capital this month, until word of the license revocations came.

The concern was that the wireless-spectrum licenses, which had been issued by the prior government, "might be used for speculative reasons, in that they were only purchased in order to sell," said WGLS CEO Douglas Haffer. As a result, the government prohibited the use of licenses won in the most recent round of bidding, he said.

Infotel had consistently "fulfilled all requisites of a license-holder," Haffer added.

The revocations come as more wireless devices are introduced, prompting the value of spectrum to soar. In Europe, spectrum auctions for third-generation mobile phones have fetched billions of dollars. Argentina's cash-strapped government could use the additional revenue.

Officials at Argentina's Communications Secretariat could not be reached for comment. It is not clear exactly how many companies lost their licenses. According to press reports, the government in some cases may issue new licenses rather than reinstate those that were revoked.

A Comsat source said the company has not been able to operate an MMDS service in Buenos Aires as a result of the blanket ban. Comsat offers high-speed data-transmission services, such as Internet access, to medium-sized companies.

Haffer said he was hopeful that the government would reinstate Infotel's license, noting that the company invested some $5.5 million to build an infrastructure in Argentina.

A decision on whether to reinstate Infotel's Buenos Aires license is expected in the next week or two, he said.

"Argentina was slated to be our first revenue generator internationally," Haffer said. Now it appears that Lima, Peru, will take that distinction.

WLGS plans to launch a high-speed data service in Lima on Oct. 26. Meanwhile, the company is currently looking at launches in Thailand and India.