Does share of Spectrum Confer Market Power in Mobile Mergers

Merging mobile operators not only combine customers, they also combine spectrum. Does an increase in the share of this natural resource strengthen market power and how should it be treated by competition authorities?

The starting point for assessment of market power, or dominance, is the market share of the firm in a non-merger case, or the merging firms in a merger case. This is normally the market share of revenues or customers.


However, in some markets, where production is limited by a crucial input, firms’ share of that resource may be more informative than market share. Mineral markets are classic example.


In mobile markets, access to spectrum could be equated to a mining firms’ access to some mineral, such as coal. Should competition authorities take into account the amount of spectrum licensed to a Mobile Network Operator (MNO) post-merger as a potential source of market power? If so, what are the important considerations?