The release of third-generation (3G) mobile communications licenses signals the beginning of a new telecommunications era and the birth of new players in a potentially enormous market. The 3G licensing mechanism a country selects will impact both the income to the government as well as the competitiveness and profitability of 3G operators. Possible licensing policies include Auction, Beauty Contest, Tender, and Beauty Contest with Fixed License Fee. Inevitably, unknown variables and uncertain factors will affect future 3G markets. This paper hypothesizes three 3G-market-growth scenarios for Taiwan: the optimistic scenario of high growth, the pessimistic scenario of low growth, and the middle-ground scenario of normal growth. Hypothetical licensing fees/bidding prices are estimated by taking averages out of the outcomes from countries that have already awarded 3G licenses. Investment return indicators of Net Present Value (NPV) and Internal Rate of Return (IRR) are calculated from the perspectives of both the government and the 3G operators for each of the four licensing mechanisms. Scenario analysis model is used to study the financial impacts of the licensing fees/bidding prices of alternative 3G licensing policies on government income as well as on the profitability of 3G licensees. The results could serve as references to government regulators in term of setting up reasonable 3G licensing fees/lower bounds of bidding prices. As to 3G license contenders, this model can be used to assess the upper bound of financially feasible bidding prices.