Ofcom gives the green light to £5bn mobile airwaves sale

Ofcom has unveiled plans to increase mobile phone spectrum by 75 per cent in an auction that could raise £5bn in what is likely to be the Government's single biggest sale of state assets in this Parliament.

Ed Richards, Ofcom's chief executive, described the sell-off as "the most significant spectrum release in the UK for many years".

Analysts have suggested the auction will raise more than the proceeds of any sale of Royal Mail or Urenco, the uranium processor.

Ofcom wants to stage the auction by the end of the year, but some mobile phone networks are impatient that the Government has not moved faster.

Networks are facing a surge in demand from users of smartphones and tablets, with mobile data consumption forecast to jump fivefold over the next five years.

Ofcom is offering extra spectrum, known as 4G, as the old analogue TV signal is switched off this year.

The regulator, which believes that consumers would be best served by four networks, revised its plans after carrying out an initial consultation last year.

Each mobile network faces limits on the amount of spectrum for which it can bid.

Ofcom also said two of the networks – Three and Everything Everywhere, the parent company of T-Mobile and Orange – will no longer be guaranteed any specific chunk of new spectrum.

James Barford of Enders Analysis said: "On a quick view versus the previous consultation, Vodafone and O2 have done well, Three has done less well and Everything Everywhere is mixed."

Mr Richards wants 4G coverage to reach 98 per cent of the UK population. One licence for the new spectrum will require coverage of so-called "not spots" in rural areas, with £150m of support from the Department of Culture.