Ofcom has blocked BT and its mobile arm EE from bidding for more spectrum in an auction of airwaves that will allow faster downloads for 4G users.

The ban is an attempt to halt the group’s increasing dominance in the mobile market but, at the same time, the regulator has allowed BT to bid for airwaves critical to rolling out future 5G services, a move which has angered rival operator Three.

The UK communications regulator has launched a consultation into the proposed auction of the spectrum, which will be critical in helping to meet the demands for mobile broadband as well as future 5G mobile services.

BT – which last year paid £12bn to buy EE, Britain’s largest mobile phone network – currently holds 45% of the UK’s usable mobile spectrum. This compares with 28% for Vodafone, 15% for O2 and 12% for Three UK.