Ofcom approves sale of £20 billion-worth of new spectrum

The MoD alone owns about a third of the most valuable and congested sub-15GHz spectrum, Ofcom said. It said that the spectrum owned by public bodies is worth between £3 billion and £20 billion.

"Public bodies and the MoD in particular hold some of the most valuable and sought-after radio spectrum," said Ed Richards, the chief executive of communications regulator Ofcom. "By working with these organisations we are enabling them to trade and release this spectrum which will create new opportunities for the development of wireless services for the whole country.”

The MoD has said that it will share a "significant proportion" of its spectrum and will consult on plans in May.

"The MoD is fully committed to the programme of reform in the framework for managing public sector spectrum holdings," it said in its response to Ofcom's consultation process. "This includes direct interaction with the market."

Ofcom said that there is significant pent-up demand for extra spectrum, from mobile phone networks in particular. "Spectrum underpins 3% of UK GDP and its value to the economy has grown by 50% in real terms since 2002 to over £40 billion a year," said Ofcom's report into spectrum sharing and trading. "Demand from commercial operators for certain frequencies, especially those suitable for mobile applications, already exceeds availability and this trend is forecast to continue into the medium term."

Mobile network demand is being fuelled by increasing use of multimedia services on phones such as music, video, web surfing and picture messaging.

At times of technology industry buoyancy, spectrum can be immensely valuable. In the UK in 2000 third generation (3G) mobile phone licences raised £22.5 billion for the government. That is now viewed as being excessive and mobile networks have suffered the consequences in subsequent disappointing financial results.

Ofcom said that it will publish new regulations governing selling, trading and sharing spectrum, and that it will consult further on these in the summer. It said that the Government would take responsibility for ensuring that the public sector functions of security, defence and safety are not compromised by the new use or sale of spectrum.