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The UK's communications watchdog has imposed a limit on the amount of mobile spectrum that companies can win in an upcoming auction.

Ofcom will make available more mobile spectrum later this year to provide better support for 4G and 5G services.

It said that in order to "safeguard competition", it will limit the amount BT-owned EE and Vodafone can win.

However, the Three mobile network said the proposals were "a kick in the teeth for all consumers".

By 2020, Ofcom says there will be a 37% ceiling on all useable mobile spectrum that one operator can control. Three had campaigned for a cap of 30%.

Ofcom said: "The auction rules are designed to reflect recent market developments and safeguard competition over the coming years."

Market 'imbalanced'

But Dave Dyson, chief executive of Three UK, said: "By making decisions that increase the dominance of the largest operators, Ofcom is damaging competition, restricting choice and pushing prices up for the very consumers that it is meant to protect.

"The mobile market is imbalanced and failing customers. Ofcom has shown little interest in tackling the problem. We will consider our response as a matter of urgency."

A spokesman for Ofcom responded: "We take all our decisions in the interests of consumers. This auction will keep the airwaves fair by reducing the share held by the largest operator. It will include strong safeguards to maintain a healthy four-player market and allow mobile operators to acquire the airwaves they need to compete."

In 2016, BT merged with EE and together they control 42% of immediately useable UK mobile spectrum. Vodafone has 27% followed by Three at 14% and O2 at 13%.

Following the auction, BT and EE's share of immediately useable UK mobile spectrum is expected to fall to 39%.