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Mobile telecom prices are just a pure licence to print money. The cost base (infrastructure and regulatory costs) is insignificant and the asking price maxed ou

• mcv 8y ago
  In many countries, mobile bandwidth licenses were auctioned for ridiculous sums, which were probably bid based on what they expected the market to be able to bear. That made the expected profit part of the cost. There was a bit of a scandal back then because of the way the Dutch government handled that auction and tried to squeeze as much money as possible out of the various bidding companies.
  • chewz 8y ago
    True. But it is just the government trying to get a slice of a pie. regulatory cost.
    • jandrese 8y ago
      It makes sense that the government wants to only hand out this extremely limited resource to organizations that will actually use it. And there is some sense that if someone pays a half a trillion dollars for the spectrum that they'll be highly motivated to use it to recover those costs, but in the end it basically guarantees that the service will be expensive because they have to make back that investment. But the only other solution I can see is to have the government just pick a company and hand them the license, and that's effectively guaranteed to be breathtakingly corrupt since the incentives to cheat are overwhelming. At least with the market solution the money goes into the government's general fund instead of into the pockets of the party official in charge of making the decision.
      • iguy 8y ago
        > but in the end it basically guarantees that the service will be expensive because they have to make back that investment Isn't it exactly the other way around? They bid high because they estimate that they will be able to make back the investment. The sole reason for making that investment is to sell it on to customers.
        • jandrese 8y ago
          Either way they're expecting to make that money back in a reasonable timeframe. Eventually the costs need to be passed onto the customers.
        • mcv 8y ago
          It works both ways. They bid high because they expect to be able to made back that investment, but having bid so high, they also need to meet that expectation, or they're in trouble.
      • dzhiurgis 8y ago
        Gov can run the network and make all providers MVNO’s
  • dzhiurgis 8y ago
    Thats why gov’s should run national network and let MVNO’s just issue eSIM’s and purchase peering/international cables. It’s a but like broadband and electricity deregulation in UK or NZ.
• vvanders 8y ago
  I hate mobile companies as much as anyone else but that's like saying that once you're past the hard part of software development the rest is easy. The bread and butter of mobile operators is infrastructure and spectrum licensing. FWIW I think there's a fair amount of competition, at least more than you see in the ISP space. Building towers is usually much more straightforward than trenching fiber/cable.
  • zzzcpan 8y ago
    Towers are connected through fiber. Mobile companies in general don't compete with each other at all and just continuously raise prices until too many customers starts leaving or regulators and politicians start to notice.
    • vvanders 8y ago
      Depends on the company/tower. Quite a few use high gain RF links. My local WISP uses AirFiber[1] for all their backhauls, mobile can be different but nothing is an absolute. [1] https://www.ui.com/products/#airfiber https://www.ui.com/products/#airfiber
      • joecool1029 8y ago
        T-Mobile has some AirFiber deployed in west NJ and PA for connecting towers. There are remote towers that actually have satellite backhaul. You can tell when you're on UMTS/HSPA or LTE and the latency is like 700ms. The companies are trying to eliminate them as they are costly to operate.
• eg5fv4 8y ago
  Infrastructure and regulatory costs are definitely NOT insignificant. Not at all. Planting antennas all over a country and bringing optical fibre to them is EXPENSIVE. Winning an auction on radio spectrum is EXPENSIVE, especially in developed countries.
• iguy 8y ago
  Maybe the expensive part is spectrum -- it's pretty limited, and is usually sold at auction. So the cheap bandwidth (double meaning intended) in India is ultimately a reflection on the average customer not being able to afford much. The customers don't literally participate in the auction, obviously, but the operators bid based on what they think customers will pay. It's like the representative democracy version of an auction.
• ksec 8y ago
  >Mobile telecom prices are just a pure licence to print money.The cost base (infrastructure and regulatory costs) is insignificant and the asking price maxed out - depending on the market. The majority of cost aren't spectrum, ( as a few comment below suggested ) or Infrastructure, ( Payment made to Nokia, Ericsson, Huawei, or ZTE ), but rental agreement for all those Base station. It is not exactly license to print money like Casino, Oil industry. The telecom industry margin are generally quite thin.