Interaction of Spectrum Auctions and Mobile Market Competition: Review of Theory and Evidence from European 4G Auctions
International Journal of Industrial Organization, 106, Article 103287.
Abstract
This paper examines how ex ante market structure affects spectrum auctions and subsequent mobile market outcomes. We review the relevant theory and present evidence from European 4G auctions showing that low-band auctions are followed by higher concentration and prices in markets where incumbent operators had higher pre-auction shares, without corresponding improvements in coverage or investment.
Main Finding
Low-band auctions are followed by higher concentration and prices in markets where incumbent operators had higher pre-auction shares, without corresponding improvements in coverage or investment.
Policy Relevance
Spectrum auction design should account for how pre-auction asymmetries affect downstream competition, not only auction revenue or licence allocation.
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