The UK government has directed telecom regulator Ofcom to conduct the auction for the 2.6GHz and 800MHz broadband spectrum.
The auction will allow phone companies to offer improved mobile broadband services to a wider range of customers.
Minister for Communications, Ed Vaizey, said in a statement that Ofcom will be also required to carry out a detailed market analysis for the 3G and 4G mobile broadband technology and the possibility of new entrants in the market.
Vaizey, said: “Under our plans, our mobile industry will have access to the 21st Century infrastructure it needs to give UK consumers the latest technologies and even better coverage for broadband on their mobile phones.”
Under the new government directives, Ofcom will have to make the 3G licenses indefinite in order to encourage more investment in the sector and gain revenue from the trading of licenses.
The government will be looking to liberalise the 2G spectrum at 900MHz and 1800MHz, in order to allow telecoms to run their 3G networks on it.