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Wireless internet access is so expensive because Germany made an auction for all mobile providers to buy the 3G frequencies needed for operating a 3G network. T

by tpetry 10y ago

Wireless internet access is so expensive because Germany made an auction for all mobile providers to buy the 3G frequencies needed for operating a 3G network. The problem was the providers bid insanely high amounts of money for these frequencies, all together they have been sold for 50.8 billion euros (today this would be 54 billion USD). But the huge cost for 3G did not end with this. Every provider was required to use it's frequencies and deliver 3G to a specified percent of the population. So on top of the high auction prices they had very high costs for actually putting many transceivers. And this is, why wireless is so insanely expensive in Germany. It all started with an auction and companies paying too much...

ajeet_dhaliwal 10y ago
Interesting. It's the government's fault in Canada too but for a different reason (protectionism). I know the right in the US sound crazy to some people but they do seem to have at least half a point about this stuff.
- NetStrikeForce 10y ago
  Well, in the US you have incompatible networks and poor coverage outside cities. I know the US is yuuuge, so that adds to the problem, but from outside it seems they've got a cartel issue...
Someone 10y ago
http://jonasholm.com/3G%20Auctions%20Jonas%20Holm%20061103.pdf http://jonasholm.com/3G%20Auctions%20Jonas%20Holm%20061103.p... has a chart showing the differences across Europe (page 9) Germany and the U.K. got over €600 per capita, several others less than half that. Part of that seems to be that companies are more eager to win in larger markets; part of it also is timing and/or the design of the auctions. One can argue that getting more money out this action is a loss for the governments selling the spectrum licenses, as it made it left the winners with less money to roll out a network that covers the country, and left consumers with higher prices. That's why page 17 judges the NL auction to be a "moderate fiasco (?)"; with, basically, 5 buyers buying 5 licenses that weren't that different, it didn't bring in that much, but it didn't drive up prices later.

by tpetry 10y ago

ajeet_dhaliwal 10y ago

Interesting. It's the government's fault in Canada too but for a different reason (protectionism). I know the right in the US sound crazy to some people but they do seem to have at least half a point about this stuff.

NetStrikeForce 10y ago
Well, in the US you have incompatible networks and poor coverage outside cities. I know the US is yuuuge, so that adds to the problem, but from outside it seems they've got a cartel issue...

Someone 10y ago

http://jonasholm.com/3G%20Auctions%20Jonas%20Holm%20061103.pdf http://jonasholm.com/3G%20Auctions%20Jonas%20Holm%20061103.p... has a chart showing the differences across Europe (page 9) Germany and the U.K. got over €600 per capita, several others less than half that. Part of that seems to be that companies are more eager to win in larger markets; part of it also is timing and/or the design of the auctions. One can argue that getting more money out this action is a loss for the governments selling the spectrum licenses, as it made it left the winners with less money to roll out a network that covers the country, and left consumers with higher prices. That's why page 17 judges the NL auction to be a "moderate fiasco (?)"; with, basically, 5 buyers buying 5 licenses that weren't that different, it didn't bring in that much, but it didn't drive up prices later.