Incentives to Licence Virtual Mobile Network Operators (MVNOs)
20 Pages Posted: 29 Jul 2012
Date Written: August 15, 2006
A vivid debate about the intensity of competition in mobile telecommunications markets has recently emerged in many jurisdictions. Given that radio spectrum is a scarce resource which limits the number of mobile network operators (MNOs) that can use their own radio spectrum to provide services, one idea has been to require MNOs to sell or lease spare spectrum capacities to so-called mobile virtual network operators (MVNOs), i.e. operators that provide mobile communications services without their own radio spectrum. One aspect of this policy debate is on the appropriate regulatory framework: Should MNOs be required by regulation to open up their networks for MVNOs and if so, under which terms and conditions? Or, are the MNOs’ incentives to rent out their spare capacities sufficient to facilitate entry by MVNOs? In January 2006, for example, the European Commission has answered the latter question with a "no" and endorsed a measure proposed by the Spanish national regulator, CMT, to regulate access to the networks of the three Spanish MNOs (Telefónica, Vodafone, and Armena) by MVNOs (see European Commission, 2006). Both the European Commission and the Spanish regulator CMT consider the current state of competition in the Spanish mobile telecommunications market to be unsatisfactory, and both authorities expect MVNOs to intensify competition in that market.
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