Economics of Mobile Telecommunications

342 Pages·2008·5.033 MB·English

by  Harald Gruber

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The Economics of Mobile Telecommunications
Themobiletelecommunicationsindustryisoneofthemostrapidlygrowingsectors
aroundtheworld.Thisbookoffersacomprehensiveeconomicanalysisofthemain
determinantsofgrowthintheindustry.HaraldGruberdemonstratestheimpor-
tanceofcompetitiveentryandthesettingoftechnologicalstandards,bothofwhich
play a central role in the fast diffusion of technology. Detailed country studies
provideempiricalevidenceforthedevelopmentofthemainthemes:thediffusionof
mobiletelecommunicationsservices,thepricingpoliciesinnetworkindustries,the
roleofentrybarrierssuchasradiospectrumandspectrumallocationprocedures.
This research-based survey will appeal to a wide range of applied industrial
economistswithinuniversities,governmentandtheindustryitself.
HARALDGRUBERisDeputyEconomicAdvisorattheEuropeanInvestment
Bank,Luxembourg,whereheisresponsibleforprojectappraisalandsectorstudies
intheinformationandtelecommunicationssectors.Hehaspublishedextensivelyin
refereedeconomicsandindustrialorganisationjournalsandisauthorofLearning
and Strategic Product Innovation: Theory and Evidence for the Semiconductor
Industry(1994).
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The Economics of Mobile
Telecommunications
HARALD GRUBER
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  
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo
Cambridge University Press
TheEdinburghBuilding,Cambridge,UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridg e.org /9780521843270
©HaraldGruber2005
Thisbookisincopyright.Subjecttostatutoryexceptionandtotheprovisionof
relevantcollectivelicensingagreements,noreproductionofanypartmaytakeplace
without the written permission of Cambridge University Press.
Firstpublishedinprintformat 2005
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CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracyof
sforexternalorthird-partyinternetwebsitesreferredtointhisbook,anddoesnot
guaranteethatanycontentonsuchwebsitesis,orwillremain,accurateorappropriate.
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For Licia
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Contents
Listoffigures x
Listoftables xiii
Preface xv
Listofabbreviationsandacronyms xvi
1 Introduction 1
1.1 Anewandfast-growingindustry 1
1.2 Businessstrategiesforfirms 5
1.3 Radiospectrumavailabilityasakeydeterminantfor
marketstructure 6
2 Stylisedfeaturesofthemobiletelecommunicationsindustry 9
2.1 Introduction 9
2.2 Sometechnologyhistory 10
2.3 Characteristicsofalternativecellularsystems 22
2.4 Subscribertrends 33
2.5 Evolutionofmobiletelecommunicationsrevenues 37
2.6 Trendsincost 46
2.7 Regulation 51
2.8 Conclusion 63
3 Theevolutionofnationalmarketsforcellularmobile
telecommunicationsservices 65
3.1 Introduction 65
3.2 Theanalyticalframework 66
3.3 Empiricalevidenceforthepolicymatrix 69
3.4 Countrystudies 71
3.5 Conclusion 143
4 Thedeterminantsofthediffusionofcellularmobile
telecommunicationsservices 144
4.1 Introduction 144
vii
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viii Contents
4.2 Preliminaryconsiderationsondiffusionandmarket
structure 144
4.3 Theeconometricmodel 151
4.4 Empiricalresults 158
4.5 Conclusion 169
5 Marketconductandpricingissuesinmobilemarkets 171
5.1 Introduction 171
5.2 Theoreticalconsiderationsonmarketconduct 172
5.3 Productdifferentiationstrategiesinmobile
telecommunications 177
5.4 Empiricalresearchonmarketbehaviour 182
5.5 Theoreticalfoundationsforpricinginmobile
telecommunications 184
5.6 Welfareanalysisofchargingregimes 191
5.7 Mobiletelecommunicationspricing,bytypeofservice 194
5.8 Pricetrendsinmobiletelecommunications 203
5.9 Conclusion 221
6 Issuesinradiospectrummanagement 223
6.1 Introduction 223
6.2 Internationalspectrumallocation 223
6.3 Nationalspectrumassignment 225
6.4 Spectrumassignmentinpractice 232
6.5 3GauctionsinEurope 243
6.6 DiscussionoftheexperienceofEuropean3Gauctions 258
6.7 AdministrativeproceduresforEuropean3Gspectrum
licences 260
6.8 Conclusion 265
7 Theevolutionofmarketstructureinmobiletelecommunications
markets 266
7.1 Introduction 266
7.2 Thetheoreticalframework 268
7.3 Theprofitabilityofthemobiletelecommunicationssector
inEurope 274
7.4 Thedesignofmarketstructurefor3GmarketsinEurope 278
7.5 Theaftermathof3Glicensing 282
7.6 Conclusion 285
Appendix 288
A1 Radiospectrumasascarceresource 288
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Contents ix
A2 Theworkingprinciplesofcellulartelecommunications
systems 292
Bibliography 299
Index 312
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