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> Russia has much more coverage than Canada, at a literal tenth of the cost. Starting with the obvious point that none of what I'm about to point out excuses C
by adventured 5y ago
> Russia has much more coverage than Canada, at a literal tenth of the cost.
Starting with the obvious point that none of what I'm about to point out excuses Canada's backwardness on telecom -
Poor countries almost always do things at cheaper prices. Canada isn't going to be paying people $1 per hour for their labor. Russia's monthly mininum wage is $169, it's an exceptionally poor country for the bottom 2/3. You need to find what the income adjusted gap actually is, not just go off of the surface difference (which always results in misleading eye-popping differences).
Roads in Ukraine are also built and maintained at lower costs than they are in Switzerland, which tells you very little about whether Switzerland's cost for building and maintaining roads is outrageous or appropriate for their incomes / economic development.
Russia has approximately 1/5 to 1/4 the income level of Canada. That means when they build telecom services, they can't reasonably charge $60 per month for plans and expect to get many customers, and when they build infrastructure they're able to build it at a cheaper cost than Canada can. Cheap labor is one of the few advantages poor nations often possess over affluent nations.
A ten fold cost difference between Canada and Russia, is more like 2x or 3x when you make the proper income adjustments.
- sudosysgen 5y agoSure, but we're not talking about roads, we're talking about cell infrastructure. This means that the biggest cost is, by far, CAPEX, not labour. If you don't believe me, we can look at the financial statements for Bell : https://www.bce.ca/investors/AR-2020/2020-bce-annual-report.pdf https://www.bce.ca/investors/AR-2020/2020-bce-annual-report.... [PDF Warning]. Labour is only 33%, and a lot of that labour is in wired connection installations which require disproportionately more labour than wireless installations. I don't see why these costs would be any lower in Russia. Indeed, if you try to get data for Wireless only, you'll find that the Wireless section has an EBITDA of 3.7 billion, with a revenue of 8.7 billion. That's an insane EBITDA margin of 42%. and that's in a pandemic year. Now the issue with these figures is that this takes into account contract phones, as revenue. In reality the profit margin of just providing the wireless network is simply through the roof. So even if you were to remove the 20% or so that goes to labour in the wireless segment completely, Canadian telecoms are still 5x+ more expensive than they should be.