Spectrum – the waves that mobile phones transmit on – is in huge demand by operators after the explosion in data traffic, which has heaped pressure on their networks.
The last spectrum auction, at the height of the dotcom boom in 2001, raised £22.5bn for the government. However, analysts expect the latest 4G auction to fetch far less, with a figure closer to £5bn expected.
The auction will sell two separate sections of spectrum. One will be the 800Mhz wavelength freed up by the switchover to digital TV.
The second will be a newly released 2.6Ghz section. The auction will not take place until the first-half of next year and it is unlikely the UK will see any of the 4G spectrum in use until at least 2014.
The UK’s smallest network carrier 3 has called for the government to put a mechanism in place to ensure it is able to buy up a section of the 4G spectrum. Its chief executive Kevin Russell says it is in danger of being swallowed up in the next round of consolidation if it misses out in the auction.