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The impact of license duration on tangible investments of mobile operators

Author

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  • Jeanjean, Francois
  • Lebourges, Marc
  • Liang, Julienne

Abstract

Using data from the WCIS (World Cellular Information Service) and the Telecoms Market Matrix of Analysis Mason, we were able to build a database relating the level of investment per capita to license duration for 14 countries over a 10-year period. An empirical analysis of the data shows a positive correlation between the tangible investment per capita and the license duration (the average of all active licenses or the latest license). More precisely, we observe an increase of €1.5 in the average investment per capita per year for each additional year of license duration. We also find no significant negative impact of license duration on mobile market competition. The competition outcomes are measured using the Lerner index at the operator level. Some robustness checks are performed at the country level by using the HHI (Herfindahl-Hirschman index) and the number of active mobile operators as measures of the level of competition, and we obtain additional results indicating once more that the competition is not negatively impacted by license duration.

Suggested Citation

  • Jeanjean, Francois & Lebourges, Marc & Liang, Julienne, 2019. "The impact of license duration on tangible investments of mobile operators," Telecommunications Policy, Elsevier, vol. 43(9).
    • Handle: RePEc:eee:telpol:v:43:y:2019:i:9:s0308596118303872
    DOI: 10.1016/j.telpol.2019.101835
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    References listed on IDEAS

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    More about this item

    Keywords

    Mobile license duration; Investment; Competition;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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