The potential for raising revenue through spectrum auctions was highlighted by the Indian government setting revenue-raising as an explicit objective for the award of 3G and BWA spectrum by auction. These auctions took place in 2010 and together raised US$22.7 billion.

While the revenue-raising objective would appear to be in contrast to the efficient allocation of licences, both objectives are equivalent provided that downstream competition is safeguarded. Our report explains how winners of the auction would be encouraged to innovate to fund the price of the licence and ensure profitability, bringing long-term benefits for users. Sufficient revenue generation should come as a by-product of the efficient allocation of licences in a spectrum auction, whilst large deviations from standard auction methodologies in order to raise additional revenues could have unintended consequences that may in fact reduce auction revenues. The slides presenting a summary of the report can be downloaded here.

In the early days of mobile phones, its interaction with fixed phones was uncertain. The introduction of mobile saw an increase in the use of fixed phones, with mobile users facing higher fixed phone bills compared with non mobile users. This trend was taken by some analysts and OFTEL as evidence that there were complementarities between fixed and mobile phones, and thus that mobile did not compete with fixed telephony.

We analysed consumers views and attitudes towards fixed and mobile phone use, using large-scale market surveys. Our analysis took into account the general increase of phone usage across different consumer segments, identifying that user access to a mobile phone was associated with lower expected fixed phone bills, due to some use being shifted to mobile.

Over time we prepared a short series of three reports, which were submitted to OFTEL’s Price Control Reviews. Our second and third reports are available for download.