UK's 4G spectrum auction is set to get under way by the end of 2012, announced regulator Ofcom today. The auction will offer the equivalent of three quarters of the mobile spectrum in use today – some 80% more than released in the 3G auction which took place in 2000.

The plans should see mobile broadband rolled out to at least 98% of people in villages, towns and cities across the UK. To ensure that UK consumers continue to benefit from a competitive market, Ofcom has also decided to reserve some of the available spectrum for a fourth national wholesaler other than the three largest mobile operators. Therefore, Ofcom has decided to reserve a minimum amount of spectrum in the auction for a fourth operator. This could be either Hutchison 3G or a new entrant altogether.

The 4G auction will offer at least two spectrum bands – 800 MHz and 2.6 GHz. The lower frequency 800 MHz band is part of the ‘digital dividend’, which is ideal for widespread mobile coverage. The higher frequency 2.6 GHz band is ideal for delivering the capacity needed to deliver faster speeds. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.

The spectrum bands will be auctioned to bidders as a series of lots. One of the 800 MHz lots of spectrum will carry an obligation to provide a mobile broadband service for indoor reception to at least 98% of the UK population by the end of 2017 at the latest.

Ofcom intends to hold the auction as soon as possible. Alongside today’s statement, it is publishing a draft of the legal instrument which implements the auction rules and gives effect to our decisions. This is subject to a statutory consultation closing on 11 September 2012.

Regulator expects the auction process to start before the end of this year, with prospective bidders required formally to apply to take part. Those applications will then be assessed by Ofcom before the bidding phase starts, likely to be in early 2013.

Mobile operators are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and to start offering 4G services to consumers later that year.