A European Commission decision Wednesday to let operators of 3G (third-generation) mobile phones use part of the radio spectrum previously reserved for GSM phones.

The move will make it easier and more lucrative for mobile operators in Europe to offer and develop innovative wireless technologies, such as video streaming and fast internet downloads on a mobile handset, the Commission said in a statement. Estimates given by the mobile phone industry suggest that as a result of the change, Europe's wireless communications industry may reduce cumulative capital spending by up to 40 per cent in network costs over five years.

Assuming the move is backed by the European Parliament and the European Union's 27 national governments, 3G phones will be able to run on the 900MHz and 1800MHz frequencies by the end of this year.

The Commission's decision should increase the number and choice of wireless services available. In addition, it will expand their geographic coverage as GSM (Global System for Mobile Communications) frequencies reach further than the current 3G frequencies, and towers operating in that frequency already cover most of Europe.

"Radio spectrum is a crucial economic resource which must be properly managed across Europe to unlock the potential of our telecoms sector," said Viviane Reding, the EU's telecoms commissioner. "In the EU, we must therefore remove regulatory barriers and facilitate the deployment of mobile communications by allowing new technologies to share spectrum with existing ones," she said, adding that the proposal is "a concrete step" towards a more flexible market driven approach to spectrum management in Europe.

Mobile wireless networks can best operate using low frequency bands like the 900MHz and 1800MHz frequencies. A 1987 directive had reserved them for GSM phones, but that restriction is now outdated, the Commission said.

A new legal instrument proposed by the Commission would replace the GSM directive and allow new technologies to coexist with current ones in the two frequency bands. Based on technical studies by Europe's association of spectrum and telecom authorities, CEPT, it aims to ensure harmonious coexistence of the various systems in and around these spectrum bands within the EU and its neighboring countries.