Google is considering a move into the UK wireless market after the regulator Ofcom yesterday proposed grabbing back more than a third of the mobile phone spectrum that Vodafone and O2 have been using for 22 years to auction it for new entrants.

Google is already planning to bid more than $4.6bn (£2.3bn) on spectrum in the US when it comes up for sale early next year and is rumoured to be working on its own mobile phone, nicknamed the Gphone, and a mobile payments service called GPay.

Acquiring a slice of the airwaves in Britain would allow the Californian search engine to launch its own fully fledged mobile phone service or push for the sort of open standards-based wireless broadband network it is proposing in the US.

Any move by Google into wireless would present a threat to the UK’s existing 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 charging customers for access - as the mobile networks do - Google would be able to leverage its dominant position in online advertising to make its money.

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