3G spectrum auction aftermarket network deployment

Abstract

This study empirically examines national 3G spectrum assignments for the years 2000–2007 to identify the sources and inhibitors of aftermarket network deployment. The analysis reveals that variables controlled by regulators have conflicting impacts on the deployment probability. In particular, placing more than one licence bid and stringent minimum prices enhance deployment. Conversely, encouraging entry and mandating infrastructure sharing discourage deployment. These findings should inform regulators' calculus in designing future 4G spectrum auctions.

Keywords:

• wireless telephone markets
• 3G spectrum auctions
• network deployment

JEL Classification:

• D24
• K23
• L50
• L96

Notes

¹ In particular, compliance data (SATISFIED) sources are: Ofcom (London, UK); Miguel Vidal (Deutsche Telekom AG, Bonn, Germany); Patrick Burger (Brinkhof and KPN Web site, the Netherlands); Body of European Regulators for Electronic Communications and operator websites (Italy); Natasha Freund (Austrian Regulatory Authority for Broadcasting and Telecommunications); Federal Department of the Environment Transport, Energy and Communications (Switzerland); Infocomm Development Authority of Singapore; National Telecommunications and Post Commission (Greece); Randi Heirung (Ministry of Science, Technology and Innovation, Denmark); Jiri Macek (Czech Telecommunication Office); WH Liang (National Communications Commission, Taiwan); Communications Regulation Commission (Bulgaria); TeleGeography Website (Latvia); Cellular-news and 3gameriacas websites (Georgia); Los Judijanto (Ministry of Communication and Information Technology and Juni Soehardjo, Indonesian Chambers of Commerce and Industry on Telecommunications, IT and Media); and Priit Soom (Electronic Communications Division, Estonia).

² DENSITY is proxy for network construction scale economies. The presence of scale economies implies lower network deployment costs.