The award is a small part of the UK's digital dividend, the prime spectrum that will be freed up as a result of the switch to digital television. It covers 8 MHz of what is known as interleaved spectrum in the Cardiff area.
Interleaved spectrum act as buffers between television transmitters to stop them interfering with each other. It can be used for a range of low-power uses while still preventing interference.
The interleaved spectrum has many possible uses including: mobile television; mobile broadband; new digital terrestrial television services covering a local area, a city or most of the UK; and services in support of programme making and special events.
Ofcom awards spectrum licences that are technology and service neutral and tradable. This allows users to decide how they should be used and means that there is flexibility for use to change in the future.
Earlier this month, Ofcom awarded a similar licence covering the Manchester area. The licence went to Channel M Television Limited, which currently provides the local television service for Greater Manchester.
Later awards could combine packages of interleaved spectrum in many different parts of the UK at the same time. This would allow bidders to put together blocks of spectrum so that they could offer wireless services in a network of cities or across a large part of the UK.
Depending on demand, Ofcom could offer smaller packages of interleaved spectrum, similar to those available in Cardiff and Manchester that would be suitable for local television in a variety of locations. These awards could take place roughly one year ahead of digital switchover in each region.