Discussion Papers

Jörn Kruse

Mobilfunk in Deutschland: Ordnungspolitik und Marktstrukturen
Nr. 94 / September 1992


Is there any economic rationale for governmental regulation or licencing requirements in mobile communication ? It basically boils down to spectrum allocation, which should be organized by auction procedures.

Significant scale economies are relevant in GSM telephone systems because of spectrum efficiency and infrastructure requirements. But they do not justify any regulation or licencing.

The German minister for post and telecommunications has introduced a GSM dyopoly in 1989, which includes a significant chance for collusion. The D1 licence grant to German Telekom provokes critical comments.

For PCN which ist expected to be an intermodal competitor for GSM in Germany, there will only be one licence in the beginning, because technical and institutional innovation is expected for the next years. Another reason is to support the E1 network in entering the mobile telephone market in Germany. This is going to make it even more difficult later-on to have more PCN competitors for economic as well as for political reasons.

Regional coverage regulation for GSM ist neither necessary nor harmful since high coverage will be a relevant parameter for the networks in competition. This is different for PCN for reasons of demand as well as because of the higher incremental costs for covering rural areas. Imposing high coverage obligations on PCN-networks would not be justified for economic reasons.

Only German language version available.

To top  |  Print