The Radio Spectrum Ladder of Investment to Promote Innovation and Competition in Mobile Markets

Abstract

How can innovation and competition be sustained in closed tight oligopolistic market structures? This question will be crucial in the next years for an appropriate regulation of mobile markets. The regulatory framework era of the postulate of infrastructure based competition seems behind us. It is time now to re-open the regulatory tool box to renew a service based competition approach with good incentives for all players: the incumbents with their own mobile infrastructure and potential entrants with innovative propositions for services in the emergent era of Internet of Things. This paper proposes to revisit the concept of the "ladder of investment" and to apply this approach to the mobile specific context where operators need an access to frequencies to maintain and develop their businesses. Our radio spectrum ladder of investment is structured by six rungs. Each of them supposes an appropriate technical and pricing access to the operators' networks infrastructure. Opening access to the mobile networks will be sensitive. A general scheme based on incentives for the network operators rather than on obligations and constraints is certainly more appropriate. Proposals are suggested in this article to pursue this objective.

Keywords: regulation, tight oligopolies, mobile market, MVNO, radio license assignment, infrastructure competition, service competition

JEL Classification: K23, L63, L96, O33