California-based Google already aims to bid more than $4.6 billion on a slice of the airwaves in the United States when it is up for grabs in early 2008. The company is rumoured to be working on its own mobile phone, called Gphone, as well as a mobile payments service called GPay, the Guardian reported.

Owning part of the spectrum in the UK would allow Google to launch its own mobile service, or push for an open standards-based wireless broadband network it is proposing in the United States, according to the Guardian.

Ofcom made the announcement it is looking to take back part of the 2G spectrum handed over in 1985 in order to auction it off, stating up to three operators could use it for wireless broadband services.

Google's move into mobile territory presents a threat to the UK's five mobile phone networks, which are “trying to persuade customers to access the Internet on their mobile phones to offset steep price declines in their core voice and text businesses. Rather than fund any wireless operation by changing customers for access – as the mobile networks do – Google would be able to leverage its dominant position in online advertising to make its money,” the Guardian report stated.

The UK's original mobile phone companies, Vodafone and O2 (formerly Cellnet), were given the 2G spectrum during the UK mobile industry's infancy 22 years ago. Should Ofcom's plan go through, the two will not receive any compensation, and will not be allowed to bid in the auction, proposed for 2009, to try and keep even part of what they will lose.