Cell Phones

We just got a "memo" as to why prices are high

  • Last Updated:
  • Oct 31st, 2019 2:54 am
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes

We just got a "memo" as to why prices are high

Here are the reasons they gave us
"according to CTWA, over the last 40 years, Canada's network providers have invested more than $70B in building Canada's wireless networks in $50B invested in capital expenditure while the remainder was invested in Spectrum acquisition and license fees
A contributing factor to high network costs in Canada is that most network equipment and handsets are bought outside of Canada and are denominated is US dollars, resulting in Canadian network providers paying 32% more as a result of the exchange rate between USD & CAD"

"Canadian operators pay an avg of $340 USD for Spectrum per subscriber, https://bit.ly/2JzyR4O, significantly higher than that of high income countries countries like USA $200 USD / person, Germany $140 USD/person and Japan $30 USD/person"


since we have a lot of people that are knowledgeable about the pricing in Canada and why it's so expensive I'd like to know if this memo is BS and I'm genuinely curious. Btw if you don't want to click that bit.ly link there is a pdf by gmsa that shows the prices for Spectrum per sub and prices pr MHz just look up "effective Spectrum prices GMSA"
16 replies
Deal Addict
Aug 15, 2010
1968 posts
390 upvotes
Who is we?
How can an ant carry twenty times its body weight, but root beer floats are still delicious?
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes
mobifree wrote: Who sent you this message?
Wasn't a private message, open to anyone in the company to read but it's not like publicly available, at least yet.
Deal Addict
Mar 3, 2018
2067 posts
2086 upvotes
GTA
It is BS. Australia has a similar spread out population and land area to Canada. Yet their mobile rates are a fraction of Canada’s. Like 30 gb for $45 AUD. About $40 CDN. See example link.

https://www.vodafone.com.au/plans
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes
DaveTheDude wrote: It is BS. Australia has a similar spread out population and land area to Canada. Yet their mobile rates are a fraction of Canada’s. Like 30 gb for $45 AUD. About $40 CDN. See example link.

https://www.vodafone.com.au/plans
Did you read my post? I didn't mention land area
Deal Addict
Mar 3, 2018
2067 posts
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GTA
Thorium1 wrote: Did you read my post? I didn't mention land area
Where do you think Australia gets its network equipment. The same place as Canada in USD. Just trying to give you a relevant example but apparently your mind is closed to other information.
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes
DaveTheDude wrote: Where do you think Australia gets its network equipment. The same place as Canada in USD. Just trying to give you a relevant example but apparently your mind is closed to other information.
I'm asking for people that know the industry, cost of infrastructure, cost of Spectrum acquisition and etc to comment. I can't ask for more info from my company, because then it looks like I'm not drinking enough of that Kool aid, but now that those prices are released I can see how they'd want to get profit due to the costs related.

I genuinely want someone with knowledge in those fields to comment and not just someone saying "BuT tHe LaNdMasS oF AuStralia n CanAdA is tHe SaMe!"
Sr. Member
User avatar
Apr 26, 2003
942 posts
80 upvotes
Vancouver
I thought spectrum gets auctioned off? Doesn't that mean they get market rate and not inflated?

It makes zero sense to blame currency exchange for equipment. It's not like people are comparing monthly bills in different currencies.
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes
AnimeEd wrote: I thought spectrum gets auctioned off? Doesn't that mean they get market rate and not inflated?

It makes zero sense to blame currency exchange for equipment. It's not like people are comparing monthly bills in different currencies.
Could it be that its just the avg price for spectrum is at 340 USD/person?
Deal Addict
Mar 3, 2018
2067 posts
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GTA
Thorium1 wrote: I genuinely want someone with knowledge in those fields to comment and not just someone saying "BuT tHe LaNdMasS oF AuStralia n CanAdA is tHe SaMe!"
Why would anyone comment now after seeing hoW yOu reSPond to people offering information you decide is not relevant. RFD is not reddit where being rude is normal.
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes
DaveTheDude wrote: Why would anyone comment now after seeing hoW yOu reSPond to people offering information you decide is not relevant. RFD is not reddit where being rude is normal.
You offered the same information the majority of people give which is "but Australia is the same size as Canada" instead of something related to cost of infrastructure or cost of Spectrum like the other guy did that raised a good point, if Spectrum is auctioned off it should be cheaper.
Deal Fanatic
Jan 18, 2010
7625 posts
5135 upvotes
Canada
Thorium1 wrote: I'm asking for people that know the industry, cost of infrastructure, cost of Spectrum acquisition and etc to comment. I can't ask for more info from my company, because then it looks like I'm not drinking enough of that Kool aid, but now that those prices are released I can see how they'd want to get profit due to the costs related.

I genuinely want someone with knowledge in those fields to comment and not just someone saying "BuT tHe LaNdMasS oF AuStralia n CanAdA is tHe SaMe!"
Big 3 in Canada like to hoard spectrum. The avg cost/person for spectrum may well be higher than other countries (haven't checked), but big 3 also have a ton of spectrum on hand. Much more than they would normally need. If they bought only what they really needed (like most other operators in other countries), they wouldn't have had to spend this much. For them, it was insurance against any potential competition. Big3 and shareholders know the costs can easily be passed onto the consumer so they don't mind gobbling up spectrum.

The govt kind of understood this, so now they try to set aside spectrum for smaller players. But that's not enough.
There needs to be a Use it or Lose it policy for spectrum in Canada like some other countries.
[OP]
Newbie
Jun 13, 2019
82 posts
49 upvotes
RFDQ1016 wrote: Big 3 in Canada like to hoard spectrum. The avg cost/person for spectrum may well be higher than other countries (haven't checked), but big 3 also have a ton of spectrum on hand. Much more than they would normally need. If they bought only what they really needed (like most other operators in other countries), they wouldn't have had to spend this much. For them, it was insurance against any potential competition. Big3 and shareholders know the costs can easily be passed onto the consumer so they don't mind gobbling up spectrum.

The govt kind of understood this, so now they try to set aside spectrum for smaller players. But that's not enough.
There needs to be a Use it or Lose it policy for spectrum in Canada like some other countries.
I really like your answer, thanks! This whole spectrum thing is quite confusing because I had never heard about this until the memo this morning.
Deal Addict
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Jul 16, 2012
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Vancouver, BC Canada
Sounds like typical union brainwashing to me?

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