The licensing of mobile operators in European markets and the consequences of new entry for competition

Abstract

Purpose – This paper aims to investigate whether new entry via mobile licensing in Europe has had any longer-term consequences for competition. Design/methodology/approach – A database is presented covering certain recent periods and the issue of licences for the provision of 2G, 3G and 4G mobile services. Findings – It would appear that new entry has had very little overall effect on competition, although Hutchison Whampoa has, almost uniquely, forced a response from incumbents via a strategy of low prices, albeit without gaining significant market share at their expense. Research limitations/implications – Interpretation of databases cannot by its very nature be entirely free from ambiguity. Practical implications – In practice, given that very few 4G (long-term evolution) licence regulations have reserved spectrum for new entrants, it may be presumed that most regulators in European countries have already observed that such new entry as is likely to be attracted will take the form of poorly funded comp...