The communications regulator said the move would help to increase the mobile broadband networks' speeds and improve coverage in more rural areas.
At the moment the 2G spectrum is just used for carrying voice and text messages.
Now the Vodafone and O2 networks will now be able to convert their chunks of the 900MHz spectrum to carry data too.
Mobile broadband boost
When the networks roll their upgrades out it should result in an almost instant improvement for their mobile broadband customers.
Those currently struggling to get signal inside their homes or in a rural broadband area with patchy coverage, as we look at here, will likely find it easier to connect to 3G, especially since this frequency penetrates walls more easily than some other sections of the spectrum.
Greater network capacity should also, in theory, increase mobile broadband speeds.
However, given that the number of 3G users currently seems to be increasing far faster than the amount of capacity available, that speed increase won't be dramatic.
It's unlikely that most mobile broadband users will even notice the difference.
EU intervention
Ofcom increased the spectrum available after European Union legislation made it mandatory.
However, they've only made this formal announcement after consulting with the Government and networks about how this will affect competition in the sector, always a vexed question in the small world of the UK mobile networks.
The lower (900MHz) frequency allows signal to travel further so it's more valuable than the 1800MHz spectrum used by the T-Mobile and Orange network.
That made the regulator concerned that Vodafone and O2 would have a competitive advantage.
The merger of Orange and T-mobile, which began in October 2010, to Everything Everywhere and included a network sharing agreement with Three, encouraged the regulator to go ahead.
The networks shouldn't squabble over the decision too much, though, since Ofcom has said that it intends to make all types of spectrum fully technology neutral in 2011.
Huawei (Three), Intellect and Samsung all made the suggestion during the consultation process which would allow them to roll out systems such as LTE and WiMAX without having to wait for an ok.
The other party concerned about re-farming the spectrum was the railways.
The Railway Communications System Project uses a band of spectrum adjacent to the bits Ofcom are auctioning off for trains and signallers to communicate with each other.
Putting too much strain on nearby networks could cause interference for communication using this project which is obviously extremely dangerous.
Ofcom have included measures in the latest 2G to 3G project to prevent that from happening.
What's next: 4G
All Ofcom's fiddling with ownership of networks are as nothing to the wrangling that it'll have to go with in order to roll out the next phase of mobile network upgrades: the move to 4G.
To allocate spectrum for 4G, an upgrade that should result in dramatically better coverage and much faster speeds for mobile broadband users, the regulator will have to deal with the competing interests of the UK's four or five huge networks.
The stakes are high because the decisions made on 4G will determine the shape of the market for years. Expect fireworks.
We are independent of all of the products and services we compare.
We order our comparison tables by price or feature and never by referral revenue.
We donate at least 5% of our profits to charity, and we aim to be climate positive.
