4 ms·
It kinda makes sense for me, it increases the effective margin on services, so it could make an area that would otherwise be not cost effective for service, cos
by Aloha 10y ago
It kinda makes sense for me, it increases the effective margin on services, so it could make an area that would otherwise be not cost effective for service, cost effective. Telcos only make expansions for areas that can generate an effective rate of return, if the density required to make a rate of return drops a wider area can be serviced.
I'm optimistic but not hopeful - we didn't have these kinds of services long enough to see if they would move the needle.. but I strongly suspect that they wouldn't, and would just line the pockets of the incumbent telcos.
For things like utilities I'm a big big big believer in regulated monopolies. It makes no sense from a cost perspective to have duplicated facilities rather than rate of return based financing.. and if you want universal access, you need that cross subsidization that was done before divestiture (high margin services subsidized low margin ones to ensure universal access).
In the end, the only way to have universal service is to have some sort of cross subsidization either from higher margin services the telco also sells, or from an external entity.