Is PCS/3G Auction a Truncated Experience in Uruguay?

Abstract:     
Uruguay is carrying out an incipient regulatory reform process in telecommunication sector. The reform stresses on the liberalization of all services but fixed telephone and national long distance, and the creation of a regulatory agency. Privatization of the national utility is not foreseen. The liberalization of the mobile market requires the use of a scarce resource, the spectrum, that limits the number of possible entrants, thus it was decided to regulate the access through an auction.

Licences auctions for mobile provoked a revolution in auction theory. Due to the special characteristics of the object to be auctioned, several designs were developed and applied in different countries. Finally, British auction in multiple rounds was adopted as a consensus design. This kind of design is better than others used previously, but it is sensitive to some details that influence too much on the auctioneer results. In this paper we analyze the Uruguayan auction design compared to those used in other countries as well as its implementation details.

The auction processes is having important problems related to political issues, the relationship with regional telecommunication markets and economic crisis, rather than the auction design itself. In this paper we discuss the relevance of all this elements in promoting competition in mobile market.

Note: The downloadable paper is written in Spanish.

Number of Pages in PDF File: 46

Keywords: Auctions, telecommunication

JEL Classification: D44, L96

working papers series