OT - Cellphone billing

[Christopher Browne]

On Thu, Feb 28, 2008 at 11:12 PM, James Knott <james.knott-bJEeYj9oJeDQT0dZR+AlfA at public.gmane.org> wrote:
>
> Christopher Browne wrote:
>  > 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.
>  >
>
>  Once that equipment is paid for & depreciated, it becomes a tax
>  liability to keep it in service.  At least, that's what I recall from
>  when I was planning equipment installs for Unitel.  Also, these days
>  equipment depreciates fast!  Take Rogers, for example.  They originally
>  started out with analog gear, then the old "TDMA" and now GSM (also
>  TDMA) and they've already started  moving to the next generation.  On
>  the other side, the carrier gear is quickly moving from TDM or ATM to IP
>  switching.  So, that's 3 or 4 network builds in the about 20 years
>  they've been in the cell phone business.

No, it's NOT a "tax liability to keep it in service."  No more than it
would be a "tax liability" to keep a car in service for a couple more
years.

The phone companies tend to be *so* profitable that their perspective
on things tends to deviate from what many would consider rational.

If there is a cost, it would be in terms of service and maintenance
fees.  Cisco, I expect, tries this road, where they'd try to hike up
maintenance fees on old hardware to the point of making new hardware
look mighty attractive.  But note that this would be a fee that Cisco
would charge; it's not some magical "tax liability."

For a Linux "fit," you can consider that Linux often plays well on
hardware that's a couple years old.  My work PC was pretty spiffy when
it was new, but it's certainly *way* inferior to what's being sold
now, and would certainly be wildly inadequate to run Windows Vista.
In a telco context, they would be quite likely to try to force pushing
the old machine off my desk, not because it "needs to go," but because
of some "renewal policy" that amounts mostly to them not caring what
things cost.
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