4G auction earns UK less than expected

The Treasury had pencilled in proceeds of 3.5 bln from the sell-off, although the total will rise slightly after a final stage of bidding to allocate the winners' bands of airwaves.

Mobile operators Vodafone, O2, EE and Three all successfully bid, as did fixed-line operator BT, regulator Ofcom said on Wednesday.

The regulator structured the auction to deliver maximum benefits for businesses and consumers rather than maximise revenue for the government.

Ofcom chief executive Ed Richards said: "This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country.

Vodafone, the country's third ranking operator, paid the most, some 790.8 million pounds to win a five blocks of airwaves, Ofcom said.

The biggest operator EE, which has already launched 4G services in major British cities using its existing airwaves, paid 588.9 mln pounds to buy more to extend coverage countrywide, Ofcom said, while O2, owned by Telefonica, paid 550 mln pounds for two tranches.

Ofcom reserved airwaves for a fourth operator in order to keep the market competitive. Hutchison 3G, the operator of fourth-placed Three, paid 225 mln pounds to win the bands, Ofcom said.

BT bid 186.5 mln pounds to pick up three blocks of spectrum. It said it would use the licenses to provide its customers with better mobile broadband, but it would not build a national mobile network.