An investment view of mobile telecommunications in the European Union

The paper illustrates in some detail the key variables that are affecting the mobile telecommunications sector in the European Union. The sector is expanding rapidly in Europe owing to a favourable technological and regulatory environment. The increasingly competitive market structure delivers lower prices and better service quality to consumers. However, for firms the sector risk is increasing. Financial investors, used to high profits in the industry, may react to these trends by potentially reducing the resources to the sector. From the point of view of social welfare, it may be well worth the increased risk given the huge benefits consumers receive as a result of competition. There may be public interest in sustaining the growth of this industry and by taking actions that encourage agents to the long-term view. (C) 1999 Elsevier Science Ltd. All rights reserved.