The UK Ministry of Defence (MoD) is planning to sell around 200MHz of its radio spectrum usage rights to help private operators and companies increase capacity for fourth-generation (4G) networks and other wireless services nationwide.

Announced amid escalating market demand for extra spectrum, the auction is the first direct sale by a government department and was part of the October 2010 spending review.

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The review recommended release of at least 500MHz of public spectrum below 5GHz by 2020 for new mobile communications use.

"We hope that the sale will help drive the roll-out of new generation networks and universal access to broadband, both of which are vital to the UK’s prosperity."

All proceeds from the sale, expected to be £1bn, will be transferred to the HM Treasury instead of the MoD, as announced by UK Chancellor George Osborne in his statement to Parliament on 5 December.

The spectrum to be sold is below 15GHz, which is considered the most useful due to its broad range of applications; it is also up for use by fixed-line operators for providing wireless access to broadband services.

UK Defence Equipment, Support and Technology minister Philip Dunne said: "We hope that the sale will help drive the roll-out of new generation networks and universal access to broadband, both of which are vital to the UK’s prosperity."

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The public sector currently holds almost half of all UK radio spectrum below 15GHz for defence, emergency services, transport and science applications, with three quarters held by the MoD, in addition to one third of all spectrums below 15GHz.

The MoD is planning to develop an industry brochure in early 2013, followed by an industry day in early summer 2013, before staring preparations for the auction by the end of 2013, with an aim to complete the process in 2014.