The Federal Government would be expected to receive millions of dollars from an auction of wireless broadband spectrum in late 2012.

The 126 megahertz spectrum auction would help telecommunication providers expand their wireless and mobile services and meet the telco demands in the near future.

Telcos are expected to bid due to the volumes of data their network can accommodate. A new broadband technology in Australia, called the long-term evolution (LTE) technology, would be needed to provide stable telco services to Australian users in the future.

Telco company Telstra said it will only bid for a share of spectrum if the shareholders give a green light to its $11 billion deal with the government.

Telstra also agreed to share its fixed infrastructure and transfer its customers to the government's proposed new fibre optic network, the National Broadband Network (NBN).

“Gaining access to the … spectrum is critical to building on this success [of the Next G network] to the benefit of Australian consumers, businesses and the wider community',” said chief executive David Thodey of Telstra.

The spectrum would be made available once the government tunrs off its analog television signals in December 2013. All televisions will shift to digital signals, which uses less spectrum, and the money earned from the spectrum auction will be called the “digital dividend.”

Optus confirmed yesterday it would participate in the auction.

“This is a critical decision and a positive step in providing industry with the certainty,” the director of Optus products and delivery, Henry Calvert said.

Chris Althaus, chief executive of the industry-funded Australian Mobile Telecommunications Association, said the larger mobile broadband capacity could uplift the economy by more than $10 billion a year.