OT - Cellphone billing

[Christopher Browne]

On Thu, Feb 28, 2008 at 10:28 PM, James Knott <james.knott-bJEeYj9oJeDQT0dZR+AlfA at public.gmane.org> wrote:
> Lennart Sorensen wrote:
>  > On Thu, Feb 28, 2008 at 10:37:43AM -0500, William Muriithi wrote:
>  >
>  >> This is what I have found in any other country I have visited beside N
>  >> America.  Communication cost can get really low as just paying the
>  >> minimum fee to retain the number active. And as long as you have some
>  >> money on the phone, the numer is your for an year.
>  >>
>  >
>  > Here it can cost $5 per month to have voice mail service.  There it is
>  > included free in your anual minimum use cost.  Of course voicemail
>  > really costs the company nothing if they already have the equipment so
>  > the $5 per month is pure profit.
>
>  Why would they already have that equipment?  A company buys equipment
>  with the idea of generating revenue with it and that same equipment has
>  to be amortized over several years.  Where does the money to amortize it
>  come from?

A peculiar thing happened in the US over the last few years:  A whole
bunch of companies went aggressively after cellular market dominance.
And a bunch FAILED.  That's part of why Nortel has gone through near
death throes - they sold equipment to these companies, and geared up
for expansion based on that, only to see the companies die.  Cisco is
suffering from the same thing, albeit to a lesser degree.

At any rate, what happened after the business failures was that a
whole pile of cellular infrastructure leaped onto the US market at
fire sale prices.  A side-effect of this is that successors could buy
up "world class" infrastructure for a song, and thereby have near-zero
cost for this sort of thing.

Canada did not see anything like the same sort of
cut-throat-to-the-point-of-bleeding-out competition, so the cellular
sellers, here, actually paid for the equipment that they are using.
Mind you, eventually the cost is amortized, and some of the fees that
they charge do become lies.

But it is not irrational that some services wind up being near-free in
the US, when the cost model for equipment wound up different due to
bankruptcies...
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