Ofcom has announced its plans to auction off more of the radio spectrum to make way for more digital services.

Airwaves that will be freed up by turning off the analogue TV signal in 2012 is expected to result in providers offering more digital TV channels and ultra-fast wireless broadband over the next decade.

A consortium that includes the BBC, ITV, Channel 4, Sony and the Dixon's retail group lobbied regulator Ofcom to reserve the freed-up spectrum for free high-definition TV services over Freeview, have been disappointed.

Although Ofcom has packaged the available spectrum into key uses, it said it will ultimately be up to the market to decide what services it wants to deliver.

The regulator said this approach was likely to generate greater value for the public. It also said advances in digital compression technology and a new transmission standard, called DVB-T2, means HD channels could be delivered over digital terrestrial TV without the need for allocated spectrum.

Ofcom's chief executive Ed Richards said "We believe [this] is the fairest, most transparent and most efficient way of assigning this spectrum, in the face of many, many conflicting demands for its use.

"It maximises flexibility in a fast changing media environment; It promotes awarding spectrum to those that will make the most of it and value it most, allowing them to trade their licences and deliver benefits to society, and will create new opportunities for new technologies and services... leading to the potential for… greater choice and lower prices."

The auction will start in 2009, with key areas of use tentatively earmarked for national digital terrestrial TV in high or standard definition, cognitive radio - a new wireless technology which can deliver broadband - high-speed mobile broadband and mobile TV. Ofcom also plans for part of the spectrum to be used for 25 new local TV stations across the UK.