Over half of 4G money to be paid into Exchequer in 2012

The new network will allow for next generation mobile devices with increased speeds and data capacity.

More than half of the money raised will be paid to the Exchequer this year.

Minister Rabbitte said this will enhance telecommunications in Ireland.

He said: "It means that it greatly enhances the capacity of the successful telecommunications mobile operators to enhance their service, to provide next generation services to different parts of the country."

However IrelandOffline, a voluntary organisation campaigning for the development of high-speed internet access services, believes that "the regulator is now only prepared to regulate for urban areas".

IrelandOffline said that one of the key goals of the auction was a 70% population coverage clause. The organisation claims that 70% geographic coverage actually means "less than 13% of the national area", to the detriment of rural areas.

They said: "Even worse only 50% of the population need be served by the new technology and by the end of 2015 and existing technology such as 3G may be used to ‘fill in’ the remaining 20%.

"This raises the possibility that 4G coverage, even in three years' time, could be well below 10% of the State by area and still comply fully with the insipid targets set by Comreg."

Eamonn Wallace, chairman of IrelandOffline, said people "should be wary of the total figure as outlined in the Comreg Press Release."

He said: "It will be subject to as yet uncalculated rebates not to mention the cost of three different sets of consultants and the hire of extremely expensive auction software.

"The deliberate failure of Comreg to mandate any meaningful geographic coverage after 2015 is the clearest message to the market that that the regulator is now only prepared to regulate for urban areas.

"One of the goals at the outset, bizarrely, was to increase the number of operators from four to five. This singularly stupid idea was based on the work of an early 19th century economist, Cournot, using a set of simplistic assumptions."

He claimed that Cournot's assumptions were the premise that underpinned the entire consultation.

Mr Wallace said: "In the end, in effect, they have accepted the minimum bids for minimal spectrum from two bidding cartels masquerading as four separate entities.

"Another early goal was that the licensees would each build their own networks. The operators wisely ignored that condition and proceeded to coalesce into two infrastructures. We believe that a better network, better speeds and more money could have been achieved by simple common sense."

"Rural residents, if they get any 4G service at all, will be dependent on a service that has been crippled from its inception."