A Comparison between the Swedish 3G Beauty Contest and the UK 3G Auction

Abstract: This thesis compares the two different version of public franchise bidding for awarding 3G licenses used in Sweden and the UK, respectively a beauty contest and an auction. The fact is that the Swedish beauty contest has failed to tackle many of the problems discussed in connection with public franchise bidding in an effective way. Sweden has first of all had problems with enforcing the ambitious coverage criteria. The UK has on the other hand succeeded in tackling the problems and raised governmental revenue of £22.5bn through the auction. The conclusion is that this thesis confirms the existing literatures’ critique of the Swedish beauty contest. However, this thesis also provides a new perspective to the existing literature. The main conclusion is that the auction has locked the prices at a high level and externalised negative price and investments effects through the international operators’ behaviour onto consumers in other countries.