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Seven competing for slice of 4G

Vodafone and BT will be among seven bidders competing in next year's 4G auction in what marks the largest ever sale of mobile airwaves in the UK.

Regulator Ofcom confirmed that O2 parent Telefonica, Hutchison 3G and Everything Everywhere (EE) are also on the list, as well as Hong Kong conglomerate PCCW and UK network supplier MLL Telecom.

Ofcom said the auction, which kicks off in January, will herald "better, faster and more reliable mobile broadband connections" for consumers across the UK.

Ed Richards, chief executive of Ofcom, said: "The 4G auction will be a competitive process that will dictate the shape of the UK mobile phone market for the next decade and beyond."

While all the UK's major mobile operators are bidding, international player PCCW and MLL are also competing to secure a slice of 4G in Britain. PCCW owns Hong Kong Telecom, while MLL is a private equity-backed firm based in Buckinghamshire that supports fixed and wireless services in the UK.

Bidders will be competing to buy airwaves in two separate bands - higher frequency 2.6 GHz and lower frequency 800 MHz - with around 28 lots of spectrum up for grabs in total.

EE, which was formed from the merger of Orange and T-Mobile, already has access to 4G and was the first to offer a 4G network in the UK, but is bidding to secure more airwaves in the sale.

BT has previously expressed interest in acquiring 2.6GHz frequencies to bolster its wi-fi offering, although it is not thought to have aspirations of becoming a major mobile player. It is hoped the 4G sale will generate a windfall for the Government following successful auctions in other countries.

Mobile operators in the Netherlands paid a total of 3.8 billion euro (3.1 billion) for the country's 4G spectrum last Friday, easily surpassing expectations of around 450 million euro (366 million). In Ireland last month, operators overcame a challenging economy to generate 854 million euro (700 million).

Ofcom has placed a reserve price of 1.3 billion on the 4G sale, but the Government's tax and spending watchdog this month estimated a 3.5 billion boost to the public finances.

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