Communications regulator Ofcom has launched its first spectrum auction, which will enable mobile operators to run low-power GSM services.
Such services could allow the creation of local GSM networks. These would provide mobile access within small areas, such as offices and university campuses, without the expense of connecting to the full GSM network.
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The spectrum band on offer is close to the frequencies used by major mobile operators and would allow them to develop networks that would be accessible using existing handsets.
The auction will comprise a single round of sealed bids for the award of between seven and 12 low-power licences, with Tuesday 21 March set as the provisional date for applications.
The move is expected to interest the big mobile operators, and likely niche bidders include telecoms start-up Coffee Telecom, which is interested in setting up hotspots in places such as airports and shopping centres.
An Ofcom spokesman said, "Every one of the 60 million-odd mobile phones in operation in the UK today can tune into the frequencies that are up for auction.
"We prefer a technology neutral approach to spectrum allocation. We have no view about what the spectrum is used for. We want to let the market decide."