Tuesday, November 21, 2000

Wireless Auction Follies. Here's an interesting article I do not agree with. Although it makes some good points, the economics behind it is faulty. This fall, Sweden will also assign its wireless spectrum to telecom companies eager to offer next-generation (or 3G) wireless services, but instead of emulating Britain's budget-maximizing strategy, it opted for a seemingly wasteful beauty pageant. The article argues that since Swedish telecoms will not be taxed until AFTER the service produces revenues, it will be keener to experiment.

I would argue that the logic is reversed. Swedish companies have been given a gift for free, and can now squander it as they choose. British Telecom, on the other hand will have to think very very hard about how to make its investment as valuable as possible. Now, whether BT comes up with anything clever I don't know, but they every incentive to do so.

PS. I apologise for posts being late, problem with blogger servers


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