(Adds comments, details.) By Lilly Vitorovich Of DOW JONES NEWSWIRES LONDON (Dow Jones)--The U.K. government Wednesday gave the go-ahead for a long-awaited mobile spectrum auction as part of wider efforts to improve the speed of Internet broadband in the country, while it will also bring in billions of pounds to help pay down the nation's debt. Communications Minister Ed Vaizey wants communications regulator Ofcom to co-ordinate a combined auction of 800 megahertz and 2600MHz spectrum as soon as possible so that "operators can deliver widespread high speed mobile broadband." Ofcom said it aimed to hold the auction at the end of 2011. Mobile industry executives had expected the auction to take place around the first-half or third quarter of 2011. The minister's spokeswoman declined to say how much the auction could raise. The U.K. spectrum auction announcement follows recent spectrum auctions in India and Germany, which raised $8.23 billion and EUR4.38 billion, respectively. France's telecom regulator Arcep last month said it will award mobile spectrum for the country's fourth generation mobile network before the summer of 2011. The recent switch to digital television in the U.K. has freed up valuable radio spectrum previously used to transmit analog signals, but more is needed given the sharp rise in data usage, driven partly by the surge in smartphones like Apple Inc's (AAPL) iPhone. The government wants the U.K. mobile market to "remain at the fore of delivering devices like the iPad and smartphones but they need the networks to continue to improve and increase services," Vaizey said in a statement. "Under our plans, our mobile industry will have access to the 21st Century infrastructure it needs to give U.K. consumers the latest technologies and even better coverage for broadband on their mobile phones." Vodafone Group PLC (VOD), the world's biggest mobile operator, which spent a total of GBP2.97 billion on two spectrum auctions in India and Germany this year, welcomed the U.K. government's decision. "This is a smart move from the new government, which has taken the time to consider the complex and far reaching implications of spectrum allocation in the U.K.," Vodafone UK Chief Executive Guy Laurence said, adding the company will work with Ofcom to ensure the auction is fair and timely. Everything Everywhere Ltd., the company formed to run the joint venture between Deutsche Telekom AG's (DT) T-Mobile and France Telecom's (FTE) Orange in the U.K., is reviewing its position, a company spokesman said. Everything Everywhere is the U.K.'s biggest mobile phone operator with 713 stores and 30.2 million customers, ahead of Telefonica SA's (TEF) O2. Vaizey also announced that Ofcom would carry out an assessment of future 3G and 4G markets, including the potential for new entrants. The government also wants to liberalise 2G spectrum at 900MHz and 1800MHz, in line with a European Union directive to allow operators to use these frequencies for 3G technologies. Vaizey wants 3G licences made indefinite to encourage investment and Ofcom will apply annual licence fees to reflect their market value, to be applied after the initial term ends in 2021. Last month, O2 scrapped unlimited data use for smartphones in the U.K. following a sharp rise in web surfing by consumers, and more are following suit as they balance rising competition with increasing demands on their networks. O2 said its new mobile-data pricing will give customers "a more transparent pricing model tied to usage." Orange is likely to follow O2's lead in the summer, according to a person familiar with the company. -By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com (END) Dow Jones Newswires July 28, 2010 06:49 ET (10:49 GMT)
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