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UBC Theses and Dissertations

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UBC Theses and Dissertations

Spectrum market intervention and the mobile telecommunications market Bouchette, Brenda Janet

Abstract

This thesis investigates the effects of public policy intervention in the market for commercial mobile spectrum. Spectrum is a key input in the provision of commercial mobile telecommunications services (i.e. cellular mobile phone service). In particular, the investigation centres on the regulatory framework of spectrum auctions that introduces set-aside spectrum or otherwise artificially discounted spectrum for entrant companies, for the purpose of increasing competition in the market for mobile telephony services. This investigation is based on the development of a market model for the commercial mobile telephony market, using spectrum as an input. Suppliers, both incumbent and entrant, maximize profits by first choosing the amount of spectrum to purchase and then choosing the level of services afforded by the spectrum they own. We examine the results of the model in scenarios with both non-discounted and discounted spectrum for entrants. We conclude that the successful introduction of entrants will result a lower equilibrium price, but that the extent of this price reduction is heavily dependent on the price elasticity of market demand. If entry is encouraged through discounted spectrum, then investment levels may be reduced in the long term.

Item Citations and Data

Rights

Attribution-NoDerivs 2.5 Canada