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Welfare Cost of Mobile Spectrum (Mis)allocation

Author

Listed:
  • Aimene, Louise
  • Guiffard, Jean-Baptiste
  • Ivaldi, Marc
  • Liang, Julienne

Abstract

Conditions under which spectrum is allocated are significant in determining the market structure in the telecom sector which in turn affects the prices and the quality of mobile services. In a more concentrated market, the quantity of spectrum is less diluted, and operators can offer higher quality to their customers; In a more competitive market, consumers can benefit from a lower price but at the expense of less quality for each operator. To address this trade-off, we first fit a demand model of mobile telecommunications services on a unique panel database of 23 European MNOs; we then conduct counterfactual simulations to measure the effect on consumer surplus of different schemes of spectrum allocation in Germany. Reallocating additional spectrum to three instead of four operators is consumer welfare improving as increasing prices is compensated by larger improvement in quality.

Suggested Citation

  • Aimene, Louise & Guiffard, Jean-Baptiste & Ivaldi, Marc & Liang, Julienne, 2023. "Welfare Cost of Mobile Spectrum (Mis)allocation," CEPR Discussion Papers 18016, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18016
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    Cited by:

    1. is not listed on IDEAS
    2. Howell, Bronwyn E. & Potgieter, Petrus H., 2025. "Using spectrum set-asides to address distributional objectives: Lessons from Canada, New Zealand, South Africa and the United States," Telecommunications Policy, Elsevier, vol. 49(5).

    More about this item

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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