The 4G spectrum auction will generate at least £1.3bn for the Government, the regulator Ofcom has confirmed, with the auction likely to begin by 11 December.
Potential bidders have been set that provisional date to submit an application and through December these applications will be reviewed to see who will go ahead to take part in the auction. Bidding will begin in January and will be placed online using specially built software. In February and March, the winners are informed which spectrum they have won and how much they will have to pay in licence fees. Ofcom said the new 4G services should be up and running by May or June. The regulator said a reserve price of £1.3bn has been set for the 800MHz and 2.6GHz spectrum that is up for grabs.
Ed Richards, Ofcom chief executive, said: 'Today marks an important shift from preparation to the delivery of the auction, which will see widespread 4G mobile services from a range of providers. 'The entire industry is now focused on the auction itself, with a shared goal of delivering new and improved mobile services for consumers.'
The auction has been subject to controversy, with operators threatening legal action to derail the process. EE's rivals had been angry that Britain's largest operator had been allowed to refarm spectrum for its recent 4G launch. These threats ended last month when a Government brokered deal brought forward the timetable of the 4G auction by around six months.
Simon Harris, director in PwC's valuations team, said: 'We expect demand for this prime real estate of the airwaves to drive prices up to £2bn - £4bn. The desire for sub 1GHz spectrum is likely to be a key driver of competitive tension.'
Editor: Graeme Neill