The paper discusses the impact of scarcity of frequency spectrum on the performance of the mobile telecommunications industry. An oligopoly model with endogenous sunk costs illustrates the trade off between ex ante extraction of oligopoly rents and market entry of firms. The determination of the...

Telecom spectrum is a scarce natural resource whose misallocation is likely to have adverse impact on an economy. It is therefore crucial for a country to ensure efficient allocation of telecom spectrum. Although there are different methods of allocating spectrum, auction as a method of spectrum...