Ofcom will make the 700MHz terrestrial TV spectrum available for mobile data in a bid to drive down costs.
But services on 700MHz will not be available until 2022, since this part of the radio spectrum is already in use.
Ofcom estimated the value of opening up the spectrum would be in the region of £900m to £1.2bn – but it could cost as much as £600m to make the change.
Ofcom said: "Enabling the 700MHz band to be used for mobile data will allow mobile networks to provide better performance at a lower cost, which will bring considerable benefits to citizens and consumers."
The challenge for operators and the regulator is that the 700MHz spectrum is also used for digital terrestrial television (DTT) and wireless communication for theatrical, musical and sporting events (PMSE services).
These services will need to move to free the spectrum for mobile data.
The benefit of 700MHz is that the mobile phone signal is able to pass through walls and other obstructions more easily than signals transmitted at higher frequencies. Ofcom said: "This makes it particularly well-suited to improving the quality of coverage in rural areas."
New equipment will need to be manufactured, as well as new handsets, to support 700MHz. But Ofcom said it was confident economies of scale would drive down costs.
Although Ofcom said existing digital televisions should not be affected, it will collaborate with industry bodies to make sure television sets coming onto the market are resilient to interference from mobile phone signals.
Mobile phone manufacturers will need to design devices to minimise the risk of causing interference to TV reception.
Before Ofcom can proceed, the International Telecommunications Union (ITU) will need to amend the radio regulations to confirm a co-primary allocation for mobile and broadcasting in the 700MHz band in ITU region 1 (Europe, the Middle East and Africa). The European Conference of Postal and Telecommunication Administrations (CEPT) will need to agree a mobile band plan, stipulating how mobile devices will use frequencies in the 700MHz band in European countries.
Ofcom is likely to auction the 700MHz spectrum by 2020.