The Impact of License Duration on Tangible Investments of Mobile Operators

24 Pages Posted: 14 Mar 2018 Last revised: 9 Jul 2019

Date Written: March 13, 2018

Abstract

Using data from the WCIS (World Cellular Information Service) and the Telecoms Market Matrix of Analysis Mason, we were able to build a database relating the level of investment per capita to license duration for 14 countries over a 10-year period. An empirical analysis of the data shows a positive correlation between the tangible investment per capita and the license duration (the average of all active licenses or the latest license). More precisely, we observe an increase of e1.5 in the average investment per capita per year for each additional year of license duration. We also find no significant negative impact of license duration on mobile market competition. The competition outcomes are measured using the Lerner index at the operator level. Some robustness checks are performed at the country level by using the HHI (Herfindahl-Hirschman index) and the number of active mobile operators as measures of the level of competition, and we obtain additional results indicating once more that the competition is not negatively impacted by license duration.

Keywords: Spectrum licenses, Investment, Wireless industry

JEL Classification: L50, L96

Suggested Citation

Jeanjean, François and Lebourges, Marc and Liang, Julienne, The Impact of License Duration on Tangible Investments of Mobile Operators (March 13, 2018). TPRC 46: The 46th Research Conference on Communication, Information and Internet Policy 2018. Available at SSRN: https://ssrn.com/abstract=3139711 or http://dx.doi.org/10.2139/ssrn.3139711

François Jeanjean (Contact Author)

Orange ( email )

6, place d'Alleray
Paris, 75015
France

Marc Lebourges

France Telecom ( email )

France

Julienne Liang

France Telecom ( email )

France

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