4G auction raises just £2.3bn for Treasury Chancellor George Osborne was dealt a blow today after the auction of superfast 4G airwaves raised a smaller-than-expected £2.3 billion. All the major mobile phone companies - EE, Hutchison 3G, O2 owner Telefonica and Vodafone - were successful in the bidding process, while a subsidiary of BT also picked up a licence from Ofcom. The telecoms regulator had placed a reserve price of £1.3bn on the 4G sale, but today's total is still much less than the £3.5bn estimated by the UK government's tax and spending watchdog in the Autumn statement. The previous 3G auction raised £22.5 billion for the Treasury in 2000. Bidders in the 4G version competed to buy airwaves in two separate bands - the higher frequency 2.6 GHz and lower frequency 800 MHz - with 28 lots up for grabs. After more than 50 rounds of the auction, Vodafone was the highest bidder, paying £790 million for a mixture of the lower and higher bands. Vodafone's UK chief executive, Guy Laurence, said: "It will enable us to deliver services where people really want it, especially indoors. The next generation of mobile internet services will bring real benefits to both consumers and businesses. EE, formed from the merger of Orange and T-Mobile, already has access to 4G and was the first to offer a superfast network in the UK. It was the second highest bidder, paying £588.9m for its airwaves. Under the deal, O2 parent company Telefonica has won a spectrum that must provide mobile broadband services for indoor reception to a least 98 per cent of the UK population, and at least 95 per cent of the population in Scotland, England, Northern Ireland and Wales - by the end of 2017 at the latest. Mobile operator Three, owned by Hutchison 3G, shelled out £225m in the auction, while BT subsidiary Niche paid £186m for its share of the airwaves, but group chief executive Ian Livingston said the group does not plan to build a national mobile network. He added: "Instead, this spectrum will complement our existing strategy of delivering a range of services using fixed and wireless broadband." Ofcom chief executive Ed Richards said: "This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country. We are confident that the UK will be among the most competitive markets in the world for 4G services.