Operator of Relish wireless broadband logs heavy losses

Hong Kong-owned company behind London service warns 'an alternative business plan may have to be developed'

Relish targets entrepreneurs who want broadband quickly, among other markets

By Christopher Williams, Technology, Media and Telecoms Editor

UK Broadband, the company behind wireless broadband service Relish, logged heavy losses last year as it spent heavily in an attempt to persuade Londoners to abandon their landlines.

Losses for 2014 almost quadrupled to £37.5m as UK Broadband built the Relish network and advertised it on the London Underground, among other sites.

Relish offers broadband based on UK Broadband’s own chunk of 4G mobile airwaves, via a network of masts covering only inner London. Home customers pay £20 per month for the service and businesses £25, with no line rental.

The service, launched last June, appears to have made a slow start, however. For the year to the end of December, UK Broadband reported a turnover of only £1.5m, in accounts filed at Companies House.

The figure was actually down on 2013, when UK Broadband’s other businesses, such as public sector wireless networks, delivered a combined turnover of £2m.

The company is ultimately owned by the Hong Kong telecoms operator PCCW, via a British Virgin Islands vehicle. Since it first acquired a chunk of British airwaves in 2003, PCCW has piled cash into the venture in its various forms.
In 2012 UK Broadband said it intended to launch a national 4G network. The plan was apparently scaled back prior to the launch of Relish, amid a lack of 4G smartphones capable of operating on the frequency to which the company owns the rights.
UK Broadband is aiming to challenge fixed-line providers
UK Broadband’s net liabilities stood at £193m at the turn of the year, up in line with its latest loss. The company is nevertheless planning expansion beyond London, seeking to benefit from subsidies for rural and city centre broadband.
In notes to the accounts, it said its prospects depended on factors outside its control including take-up of its services and the availability of continued funding from PCCW.
UK broadband said: “If there was insufficient customer demand for the proposed new services at price levels the company finds economically viable, an alternative business plan may have to be developed.”
But it added that the directors, chaired by Sir David Ford, the last British Chief Secretary of Hong Kong, were confident the current plan would go ahead.
PCCW has given the company at least a year from the end of September before it may call in its debt, the accounts said.