BT and its mobile arm EE have been blocked from bidding for extra spectrum when Ofcom auctions off 40 MHz of 4G spectrum in the 2.3 GHz band next year. The release of the spectrum will enable networks to deliver faster 4G services.

In a statement, Ofcom said it was concerned that if these immediately usable holdings were to become more unbalanced, it could harm competition in the next few years. BT/EE currently holds 45 per cent of immediately useable UK mobile spectrum. Vodafone holds 28 per cent, O2 15 per cent and Three 12 per cent. BT bought EE for £12bn last year.

But while the company will not be allowed to bid for the 2.3 GHz 4G spectrum, it will be allowed to bid for the some of the 150 MHz 3.4 GHz airwaves that are central to the rollout of 5G services when these are auctioned, also next year.

The decision to allow BT/EE to bid for the 5G spectrum has angered rival operator Three, which saw its own £10.25bn takeover bid for O2 blocked by regulators last year. In a statement, CEO Dave Dyson said: “Ofcom exists to promote competition and protect consumers but it has once again shown it is not willing to make the big decisions needed to deliver the best outcome for the UK.

“It has allowed BT and Vodafone to stockpile valuable mobile airwaves and put genuine choice for consumers at risk. It made empty promises to the European Commission that it would tackle this issue but it doesn’t have the courage to do so.

“The mobile industry is failing customers and Ofcom has showed it has no interest in addressing that. A 30 per cent cap on total spectrum ownership and a spectrum reservation for smaller operators are the only measures that will preserve competition for the benefit of UK mobile consumers.”

For Ofcom, Philip Marnick, spectrum group director, said: “Spectrum is the essential resource that fuels the UK’s economy. This auction can help ensure that UK consumers can access the mobile data services they need, and that operators can continue to innovate and build for the future.

“The UK has long benefitted from strong mobile competition. We are designing the auction to ensure everyone benefits from a market that continues to innovate and serve them well.”