The government has called for an official enquiry into its poorly received broadband-wireless licences auction – despite denying the auction was a flop.

The auction, which concluded on Monday saw sales of only 16 of the 42 available licences for 28GHz BFWA (broadband fixed wireless access). Patricia Hewitt, minister for small business and e-commerce, has now called for an official inquiry into the auction process, government sources confirm.

The licences will allow companies to deliver Internet and multimedia services over the airwaves wirelessly. Only £38.2 million pounds was raised – well below the £1 billion the Department of Trade and Industry had expected.

Future licences Hewitt said: "I have asked for a report on the outcome of the auction to help us plan for future spectrum allocations. It will examine also the scope for awarding licences in those regions where no licences were sold."

Of the ten bidders taking part in the BFWA auction, only six companies purchased licences: Energis Local Access, Norweb Telecom, Faultbasic, Broadnet UK, Chorus Communication and Eircom NI.

Three licences were auctioned for each region in the UK, with most of the sold licenses covering large metropolitan areas, including Greater London (three licences), Greater Manchester (three), Northern Ireland (three) and the West Midlands (two). The success came at the expense of rural areas, a government spokesman confirmed.