Ofcom will have six months from October to finalise the release of 900MHz spectrum now held by Vodafone and O2 to comply with new EU rules on spectrum allocations.
Yesterday, Europe took a key step towards enabling new mobile services such as faster mobile internet in the 900MHz band - the so-called GSM band.
The decision rationalises the 900MHz frequency band throughout Europe, a crucial step to enabling faster internet connections that use mobile telephony throughout the Continent.
Ofcom has been renegotiating the reallocation of parts of the band held by Vodafone and O2 as part of the Digital Britain goal to make a 2Mbps connection available to all UK homes by 2012.
Negotiator Kip Meek had been unable to get agreement, and published recommendations on next steps. Now there is a deadline.
Yesterday, the European Council of Ministers followed the European Parliament in approving a proposal from the European Commission to modernise the so-called GSM Directive of 1987. This reserved part of the 900MHz frequency band to GSM mobile telephony.
The updated directive now allows the band to be rationalised, paving the way for faster, pan-European services such as mobile internet, while ensuring the continuation of GSM services.
The new deal will save network operators an estimated 1.6bn euros from lower capital costs from using lower frequencies for high-speed traffic. This should foster stronger competition and contribute to faster and wider roll-out of wireless broadband services in Europe, the commission said.
The reformed GSM directive was one of several in the telecoms sector being renegotiated to pave the way for a stronger wireless economy.
Communications commissioner Viviane Reding said GSM had been a success story for Europe, where it was born. "By updating the GSM directive, the EU has paved the way for a new generation of services and technologies where Europe can be a world leader," she said.
Consumers' existing GSM handsets will continue to work, but they will also be able to use new technologies to access high-speed broadband services.