Incentives to Licence Virtual Mobile Network Operators (MVNOs)

20 Pages Posted: 29 Jul 2012

See all articles by Ralf Dewenter

Ralf Dewenter

University of the Federal Armed Forces Hamburg - Department of Economics

Justus Haucap

Heinrich Heine University Dusseldorf - Department of Economics; German Institute for Economic Research (DIW Berlin)

Date Written: August 15, 2006

Abstract

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.

Suggested Citation

Dewenter, Ralf and Haucap, Justus, Incentives to Licence Virtual Mobile Network Operators (MVNOs) (August 15, 2006). TPRC 2006, Available at SSRN: https://ssrn.com/abstract=2118977

Ralf Dewenter (Contact Author)

University of the Federal Armed Forces Hamburg - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

Justus Haucap

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

HOME PAGE: http://www.dice.uni-duesseldorf.de

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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