The Government is considering putting on offer a mobile telephone licence for "free", but the recipient would have to agree to provide Internet services to schools and the public sector without charge, officials said yesterday.

Phillip Paulwell, the technology minister, was not available for comment on the issue, but other sources confirmed that the provision of a new cellular licence was under consideration.

"The ministry is looking at a frequency band for the deployment of another cellular service," Courtney Jackson, deputy director-general at the Office of Utilities Regulation (OUR), told the Business Observer.

"Government is considering offering an additional frequency band free from spectrum fees, in exchange for Internet access in the public sector," Jackson added. "It is tied to Government's need for Internet in schools and the public sector."

There was not immediate reaction to the proposal from other players in the mobile telephone market, but such a development would likely raise some concerns for at least Digicel and Oceanic Digital, which in 1999 forked out over US$45 million apiece for their licences. Previously Cable and Wireless held a monopoly in the market.

In March Oceanic's CEO, Craig McBurnett, complained that the US$6 million for which AT&T Wireless bought a mobile licence was too low, given what his company had paid for its own.

At the time of the AT&T sale, the government had suggested that it had no plans to offer another mobile phone licence in the near future, but the possibility for the delivery of Internet services via a cellular network is shifting its position. Cell towers can convey Internet signals to a cell phone or to a computer.

The technology ministry is considering offering the new player a frequency at 450 megahertz, the lowest of all the four cell licences. Interestingly AT&T Wireless received the highest frequency. The lower the cell frequency, the stronger the cell strength, which means that the provider would need less cell towers for its build-out.

"It is frequency that can offer all capabilities (of a cell provider) for one-tenth of the network costs of the other frequencies," Jackson explained.

AT&T Wireless operates at 1900 megahertz. It shares space at 1900 megahertz with Cable & Wireless, which also operates at 800 megahertz. Digicel is 1800 and 900 megahertz and Oceanic Digital is 800 megahertz.

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