3g Mobile Telecommunications Licenses in Europe: A Critical Review
28 Pages Posted: 20 Jul 2006
Date Written: November 2006
This paper makes a critical review of the introduction of first 3G mobile services and the evolution of market structure. There is evidence in support of to the "overbidding" hypothesis, i.e. license fees determined in auctions were higher than ultimately compatible with the originally envisaged market structure base on the n+1 rule. 3G markets therefore are more concentrated than 2G markets. The correct design of market structure is crucial for accelerating the speed of introduction of 3G services: the speed increases with the number of licenses granted, but decreases with the number of idle licenses. Auctions are not superior to other methods with respect to speed of innovation.
Keywords: Mobile telecommunications, 3G, Europe, auctions, beauty contest, market structure, license fees
JEL Classification: L1, L5, L96
Suggested Citation: Suggested Citation