New mobile devices found to affect TV picture from up to three metres away

The introduction of next generation mobile phones into the UK has hit a "significant" hitch after it emerged that people who use the state-of-the-art devices at home may stop their televisions working, or even those next door.

The Government is in the process of switching the country from analogue television signals to digital by 2012. The valuable bandwidth freed up will then be auctioned to mobile phone operators, to use for next generation phone services. Yet this month it emerged that these phones can knock out the picture on cable TV and possibly others as well.

This 800Mhz spectrum will be used to introduce Long Term Evolution (LTE), or 4G, technology to the UK. The service will provide mobile users with internet at 20 times current speeds, and make them less likely to drop calls. The service is seen as crucial to bring mobile broadband to rural UK areas as the frequency can travel over long distances. While it has not yet hit the UK, it emerged last week that O2 has recently decided to test LTE technology in Slough, where it is based.

The recent problem with television could prove troublesome. Lee Sanders, a partner at Analysys Mason, said: "The value of this frequency for high-speed broadband is unquestioned. This is not an insignificant problem." Industry insiders added that the problem "must be sorted out before the auction".

Analysts at Credit Suisse, who raised concerns over the issue, said several comments gave credibility "to the concern that the digital dividend spectrum may interfere with cable TV systems and set-top boxes of other TV systems.

"The particular concern is that cable TV systems – wiring and set-top box – operate at frequencies ranging up to 800 to 900Mhz and that digital LTE signals being sent in the air at this frequency interfere with signals being sent over cables at the same frequency."

Cable and mobile operators in the UK are confident a solution can be found in time for the digital switchover, but as one source close to the talks said: "We just don't know what it is yet."

Virgin Media, which provides cable television in the UK, has held talks with the Government and the communications watchdog, Ofcom, as well as the mobile operators and handset makers. Kip Meek, who was called in by the Government to oversee the format of the auction spectrum between the major UK operators, told the Credit Suisse analysts the issue needed investigation.

The issue was first flagged in Germany and the Netherlands. The telecoms regulator in the Netherlands, a country with huge take-up of cable TV, published a study this month which showed that in 75 per cent of cases the picture of cable television showed interference when LTE devices were used up to three metres away. Half the time, the neighbours' televisions were hit as well, the study found.

The Credit Suisse analysts said Virgin Media believes this could also affect personal video recorders, VCRs and games consoles. Industry insiders also believe the state-of-the-art mobiles could affect other television formats. "We, and frankly the industry, need to understand more about how big the interference problem is. If the problem is large – not solved by just fiddling around with the position of the set-top box and wiring at the back of the TV – the issue could stop the digital dividend process, and the German spectrum auction in particular, in its tracks," they said.