SIX years after the frenzied bidding for licences to operate 3G mobile phone services, Britain’s telecoms companies will return to the auction table this week. Companies such as BT and Cable & Wireless will take on mobile operators including O2 in a spectrum auction that could raise millions of pounds for the Treasury.

Although the auction will not be on the scale of the 2000 extravaganza, which was at the height of the dot-com boom, it marks the first such airwave sell-off by Ofcom since it took charge as the telecoms and media regulator.

It will also begin a series of spectrum sell-offs by the telecoms watchdog of a total of more than 400 megahertz of prime spectrum.

The sell-offs — more than 12 are pencilled in for between now and 2010 — could raise tens or even hundreds of billions of pounds for the Chancellor’s coffers.

The auctions could also lead to the introduction of exciting new technologies, from high-speed mobile broadband to mobile television.

The “starter” auction, on Thursday, is for the spectrum band 1781.7-1785MHz paired with 1876.7-1880MHz. It is ideally used for “low-power” or short-range mobile services. It could be used to set up special mobile networks on university campuses, for example, or within office buildings or shopping centres.

The list of 14 bidders, which includes COLT and Orange, the French-owned mobile company, will submit sealed bids for between seven and twelve licences. Bids start at £50,000 a licence.

A spokesman for BT declined to detail its proposals for any licence it wins. However, the group previously has expressed an interest in expanding into new areas as it seeks to overcome the decline in its traditional calls business.

It may look to set up BT-branded local mobile networks that work along the same lines as its branded wi-fi Openzone hotspots.

While other auctions have been conducted since the 2000 event for licences to operate third-generation mobile networks, that one looms largest in the minds of the telecoms industry. From that auction, companies learnt valuable lessons.

Experts say that if the 2000 auction had been held six months later, it would probably have raised a fraction of the total. Quotient Associates, which advised ministers on the 3G sell-off, believes that the Treasury will reap at most £2.5 billion on a second 3G auction planned for some time from 2007.

In 2000, 3G was seen as a goldmine that would guarantee future growth for those fortunate enough to grab a slice of the action. Today the attitude of most is more circumspect — the fact that plain old voice and text still account for more than 90 per cent of operators’ revenues speaks for itself.

MIXED SIGNALS

However, mobile operators want to delay the auction because they fear that selling off another chunk of the airwaves, at what is expected to be a much lower price than five years ago, would expose them to unfair competition

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