The UK Treasury hopes to raise £3.5 billion from the auction of 4G spectrum licences early next year, chancellor George Osborne said in his autumn budget statement yesterday.

Britain’s independent budget watchdog, the Office for Budget Responsibility, said in its economic and fiscal outlook for December 2012 that “we assume that the Government will raise an extra £3.5 billion from the 4G spectrum auction”.

UK telecoms regulator Ofcom put a £1.3 billion reserve price on the 800MHz and 2.6GHz bands last month, and said companies wanting to bid for spectrum will be able to submit applications and an initial deposit from 11 December.

Bidding on the licences will begin in January with licences due to be granted in February and March.

UK number-one operator EE recently launched its 4G LTE network after Ofcom allowed it to repurpose spectrum it already held. The operator plans to serve 16 cities with LTE by Christmas but recently announced increases to data included in its 4G price plans, suggesting its original pricing strategy has seen limited uptake.

3 UK said in the summer that it plans to launch LTE in 2013 using spectrum it received from EE as a condition of the market leader’s creation through the merger of the Orange and T-Mobile operations.

All UK operators should be able to launch LTE services from spring 2013, five months earlier than previously planned, after Ofcom drew up plans to speed up the auction process to appease Vodafone and O2, which have not yet been able to launch LTE services.