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Exactly. Lower income = lower labor cost = lower consumer cost. Who knows if that accounts for all of the difference, but excluding that factor makes the whole
by chrismeller 8y ago
Exactly. Lower income = lower labor cost = lower consumer cost.
Who knows if that accounts for all of the difference, but excluding that factor makes the whole thing useless.
- chewz 8y agoLabor cost is insignificant. More so the cost of building infrastructure - BTS towers.
- chrismeller 8y agoAnd how is building infrastructure not impacted by labor costs?
- chewz 8y agoLease, monitoring, insurance, real estate taxes, site maintenance. From the report [1]: Tower cost in India (40-60k$) due to low land rent cost. Tower in Latin America (120-180k$) Tower in UK - 200-400k£ [2] [1] http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTEwMDI2fENoaWxkSUQ9LTF8VHlwZT0z&t=1 http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9M... [2] https://www.ft.com/content/981f7084-c515-11e5-b3b1-7b2481276e45 https://www.ft.com/content/981f7084-c515-11e5-b3b1-7b2481276...
- chrismeller 8y agoIf anything that is supporting my argument. Yes, all of those costs are less in India. Why would that possibly be?
- chewz 8y agoBecause land lease and related cost are significantly lower in India. Not due to labor costs.
- abbe_k 8y agoAnd labor cost are significant when building the towers. The actual cost for the equipment is much smaller than the tower installation cost.
- mruts 8y agoSee my above comment on why this is a fallacy. PPP isn’t magic, it only affects goods that are difficult to arbitrage. This is why oil is the same price pretty much everywhere in the oil. Because if oil was cheaper (including taxes and transport) in one place, someone would buy it and sell it somewhere else. When everyone is doing this, it equalizes the prices. This is because arbitrage drives up the price of cheaper oil and drives down the price of the expensive
- chrismeller 8y agoDifficult to arbitrage? You just proved the opposite of your own argument. Oil is the same price for many reasons (least of them being OPEC), but largely because of your point - there is a global market. How exactly is the US or UK supposed to export cheap data from India?
- mruts 8y agoThe point is that the cell towers are going to be the same price regardless of location. So PPP isn’t a good justification for why data is cheaper in India. That is all I’m saying.
- monksy 8y agoIt's also a cultural thing. The consumers won't pay a huge amount. They are very used to negotiating for nearly everything and anything.
- Scoundreller 8y agoThey may be used to it, but they also hate it. Consumers would rather go to a big box store where they know they’ll pay an okay price all the time instead of a market where they’re expected to mentally calculate the actual value of every good and negotiate down to a magic number. Even EBay couldn’t keep the auction concept alive. Auctions (effectively what these negotiations are) are great for one thing: unique and expensive objects. It’s a pain to have to spend hours a year negotiating every $50/month that goes out of my pocket. That’s a lot of unproductive hours against a machine with thousands of employees working against me.
- monksy 8y agoWhen you say they, who are you talking about? Western or Indian consumers? Auctions aren't the same as bargaining. Auctions have a lower price that is constantly going up. It just helps to reveal the max that a buyer will pay.
- Scoundreller 8y agoBoth groups. Bargaining is a waste of time if you have alternatives that don’t require it to get a good price. Auctions has buyers that are willing to pay more up until a point. Negotiating at the market has a seller that is willing to pay less up until a point. The same rules largely apply.
- gowld 8y agoIsn't India data cheap because one person who owns one giant telecom decided he wanted data to be cheap in India? Similar to the original Google Fiber philosophy. Ah, per other comments: Jio
- 8y ago