A Cross-National Analysis of the Effect of Spectrum Management Policy on the Penetration of 3G Technology

Abstract

Adoption of 3G cellular technology varies widely across countries and regions. Past scholarly works have shown that lower levels of adoption of previous technology and higher levels of income are significant factors in accelerating the take up of new technology in mobile telephony. This apart, spectrum management policy also plays a significant role in shaping 3G diffusion. Regulatory policies regarding spectrum management include standardization of band and technology and decisions to hold spectrum auctions. Our econometric analysis over a multi-country panel dataset shows that these spectrum management policies do have significant influence on the take up of 3G. Findings suggest that presence of multiple technologies for previous generation may delay the rollout. Mandating band can promote faster roll out, but in the long run can slow down the growth. We also find that auctions cause the countries to reach inflection point earlier but do not affect growth significantly. Insights gained from this study of the 2G to 3G transition can provide guidance to regulators now contemplating the transition to the newer generations.