the impact of spectrum management policy on the penetration of 3g technology
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The Impact of Spectrum Management Policy on the Penetration of 3G Technology Moinul I Zaber, Marvin Sirbu { miz , sirbu}@cmu.edu Department of Engineering and Public Policy Carnegie Mellon University, Pittsburgh, PA, USA The 6 th Communications Policy Research south (CPRsouth6) - PowerPoint PPT PresentationTRANSCRIPT
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The Impact of Spectrum Management Policy on the Penetration of 3G
Technology
Moinul I Zaber, Marvin Sirbu{miz, sirbu}@cmu.edu
Department of Engineering and Public PolicyCarnegie Mellon University, Pittsburgh, PA, USA
The 6th Communications Policy Research south (CPRsouth6)
December 9-10, 2011
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Overview
Regulators take policy decisions on whether they should be Mandating a single mobile technology Mandating a specific band of spectrum for specific technology Auctioning the spectrum as an award process
Do these policies affect generation take up of mobile telephony? We try to answer this question in light of 3G take up across the
world
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Mandating a single technology standard Pro
Economies of scale in equipment Avoid excess inertia while consumers wait to see which technology
will dominate ( HD-DVD vs Blu-ray) Global roaming
Con Avoid premature adoption of inferior technology By adopting GSM, EU missed benefits of cdmaOne Technological competition can lead to lower prices, faster innovation
Fig 1. 3G per 100 pop world wide (Single standard vs Multiple standard)
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Mandating specific spectrum band Pro
Economies of scale in equipment Global roaming
Con Forces the operators to go through the spectrum award process to
introduce new technology even though they might be capable of reusing their existing spectrum
Fig 2. Average 3G per 100 pop world wide (Bandmandate vs non bandmandate)
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Spectrum Award ProcessAuction, Hearing or Re farming? Regulators favor Auction
Speed (comparative hearings or lotteries might take months or years!) Transparency Money for the treasury
Market Players (mostly incumbents) do not like it High spectrum cost reduces capital available for plant investment New entrants lead to higher auction price
Fig 3. Average 3G per 100 pop world wide (Auction vs non auction)
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Methodology
Logistic model of technology diffusion to ascertain the effects of spectrum management policies on 3G adoption
Regression analysis on a cross-national panel dataset compiled from various data sources
The dependent variable for the regression model was the logarithm of the ratio of 3G adopters and the potential adopters
To ascertain the effect of the policy variables country income and mobile industry variables such as 2G penetration, Internet adoption, and various other variables were controlled
The model estimates 71% of the variation on 3G penetration
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Data and Variables
The dataset is composed of variables from National income and mobile industry (from ITU2010 database ) Award process ( from DotEcon2010 database ) Different technology standards and band (from CDG and GSMA
websites) The dataset has information for 127 countries where
wireless broadband has been rolled out [2001-2009] Though some high-income countries started to roll out 3G
from 2001, most of the countries rolled out 3G from late 2004. On average the dataset has four years of data regarding 3G user-base
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Result of the econometric Analysis Presence of multiple standards delays countries from reaching
the peak adoption rate
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Result of the econometric Analysis Limiting 3G to a single frequency band promotes faster roll out,
but in the long run can slow down the growth
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Result of the econometric Analysis Using auctions rather than other methods to allocate spectrum
helps countries to reach peak adoption rate faster Countries which conducted 3G auction were the first to reach
the inflection point
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Result of the econometric Analysis
Other interesting results High GDP per capita is associated with earlier attainment of the 50%
adoption rate Higher the number of Internet users per capita, the earlier 3G
diffusion reaches the peak adoption rate, though this effect declines at higher levels of Internet penetration
The late comers are catching up !
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Conclusion
Multiple standards is associated with delayed attainment of peak adoption rate
Mandating band might promote faster roll out but can slow the growth of 3G diffusion in the long run
Countries using spectrum auctions reached peak adoption rate sooner
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Questions ?
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Thank You
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Reference
1. Harald Gruber and Frank Verboven, "The evolution of markets under entry and standards regulation- the case of global mobile telecommunications," International journal of industrial organization, vol. 19, pp. 1189-1212, 2001.
2. Sangwon Lee, Sylvia Chan-Olmsted, and Heejung Kim, "The Deployment of Third-Generation Mobile Services: A Multinational Analysis of Contributing Factors," in annual meeting of the Association for Education in Journalism and Mass Communication, The Renaissance, Washington, DC Online, July 2009.
3. ITU2010. (2010, Dec.) http://www.itu.int/ITU-D/ict/publications/world/ world.html.
4. DotEcon2010. (2010, Dec.) http://www.dotecon.com/. 5. GSMA, GSM World. (2010, Dec.) http://www.mobileworldlive.com/maps/ 6. CDG, CDMA development group. (2010, Dec.)
http://www.cdg.org/worldwide/index.asp