Is spectrum still a constraint for mobile telecommunications?

The paper sets out to reconcile some puzzles observed in the cellular mobile telecommunications industry. European auctions for 3G services led to unprecedented high spectrum licence fees in some countries. Some firms paying such high upfront fees did eventually forfeit rolling out the network or launching services. However, similar events happened in other countries, where the spectrum was assigned free but some licence holders decided not to launch services. The question therefore is why do some firms not pick up business opportunities provided by access to apparently scarce inputs? The paper presents an analytical framework to explore the conditions for such situations to arise.