Hong Kong telecoms giant PCCW will launch a phone service over its wireless broadband network next year, as well as expanding its broadband coverage area, according to a report in the Wall Street Journal. But PCCW's subsidiary, UK Broadband, confirmed that UK Internet users shouldn't expect a wide rollout any time soon.

UK Broadband faces no competitive pressure to introduce services - it owns all 15 of the UK's wireless broadband licences for the 3.4GHz range, having acquired 13 during the government's spectrum auction last year, later buying the other two. The monopoly means that until PCCW finds it cost effective to introduce a service in a particular area, that area won't have 3.4GHz coverage. Currently BT controls nearly all last-mile broadband connectivity for consumers and businesses via its ADSL and business-oriented SDSL services.

UK Broadband soft-launched 512Kbit/s and 1Mbit/s broadband services in the Thames Valley in May, using cellular technology from US startup IP Wireless. Next year, it will pilot an IP telephony service that is likely to be bundled with the broadband services, according to the Journal, citing UK Broadband chief executive Ian Stone. In Hong Kong, PCCW offers bundled television, Internet and telephone services, but is planning to stick with fixed telephone and Internet in the UK, Stone said. UK Broadband did not respond to requests for comment.

The company's "phased rollout" plans, which emerged on Thursday, will be greeted with dismay by those who had hoped for more broadband competition. The company has commented that a nationwide rollout covering up to 75 percent of the UK could take years, if it ever happens. At its May launch, UK Broadband declined to comment on its plans for the rest of the country, saying it would announce rollout plans at a later date.

BT has not yet widely rolled out its SDSL services, which are the main focus of interest for businesses, as they offer high upload and download data rates. Services with less coverage are also available from cable television operators and a few niche players.

IPWireless' equipment uses a UMTS TDD based standard, and is used in Germany, Australia, Portugal, the US and a few other countries. It is similar to the nascent WiMax standard in offering high-speed wireless, but differs in most other respects - IPWireless characterises it as a flavour of 3G.

Ofcom recently announced plans to overhaul UK spectrum, which could increase competition.