UK Mobile groups threatened with bandwidth auction

Vodafone and O2, the mobile phone groups, could be forced to give up some of their most valuable bandwidth, as part of the government's plan for all homes to have broadband Internet access by 2012. Under proposals published on Friday Ofcom, the industry regulator, O2, which is owned by Spain's Telefónica, and Vodafone would be forced to relinquish part of the 900MHz spectrum which is suitable for transmitting much larger packets of data such as video and Internet services. Ofcom proposes to auction the freshly relinquished bands of spectrum to other operators who would use the spectrum for new services. A similar proposal by Ofcom to auction valuable spectrum owned by Vodafone and O2 in 2007 to rivals T-Mobile and Orange was opposed by the mobile groups. The government's plan for universal broadband are premised on the mobile operators providing wireless Internet access in remote areas, where it is too expensive to provide fixed-line broadband. Separately, the government is talking to mobile phone operators to see if they can agree an industry-led compromise.