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By Tony Hallett, 2 November 1998 17:32

NEWS Ionica, the doomed fixed radio access provider, was definitely not a telco targeting its service at the wrong market, according to one of the men behind the company's launch. Bob Pettigrew, executive chairman of Scientific Generics and a founding director of the Generics Group, which helps nurture UK high-tech start-ups, defended Ionica's business model. He told Silicon.com: "It's true that the local loop is still really the last bastion of regulation, with BT still dominant, and there have been well-documented problems with the company's technology. But FRA (fixed radio access) is not just for sub-Saharan Africa." Wireless local loop systems are typically cheaper than wireline deployments, making them particularly suitable for areas where there is little or no existing telecoms infrastructure. As such, observers have said companies like Ionica would be better off focusing on developing nations. However, Pettigrew disagreed. "Ionica was able to get the coverage - they had one million potential customers under their network umbrella - but they had poor levels of penetration, with only just over 50,000 users. The demand was there, but the technology, not the market, let them down." Other FRA operators, including Atlantic Telecom, Scottish Telecom and Teligent, have been more successful in already mature telecoms markets. Robin Bosworth, a director at telecoms consultancy, Schema, sided with Pettigrew, saying: "Ionica's problems were not a function of geography, but a mixture of competitive pressures." Ionica is now in the hands of joint administrators, PricewaterhouseCoopers and Ernst & Young, after last minute talks to find a 'white knight' investor - rumoured to be fellow fixed wireless operator, Atlantic Telecom - fell through. Ionica's principal investors - 3i, Morgan Stanley, Northern Electric, SBC Warburg, Scottish Widows and Yorkshire Electricity - stand to lose million of pounds, even after the company's assets are sold off.