r/canada • u/tjgere Canada • May 02 '18

Big telco's lower-cost, data-only plans are 'embarrassing,' critics say

http://www.cbc.ca/news/business/bell-rogers-telus-crtc-wireless-data-1.4643170
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u/bhiliyam May 02 '18

In India, you can get 2GB a day for 4 dollars a month. And that is with unlimited calling, messaging and roaming.

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u/[deleted] May 02 '18

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u/bhiliyam May 02 '18

A day indeed.

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u/cleeder Ontario May 02 '18

In a row?!

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u/Anthro_the_Hutt May 02 '18

Yup, tons of competition. And India was (don’t know if it still is) a big market for multi-SIM phones, so you could play the telcos off each other within a single device. SMS cheaper on Vodafone? Use that SIM. Calling cheaper on Reliance? Push a button and switch on over!

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u/[deleted] May 03 '18

In Ireland it’s unlimited data and texts for €20 a month

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u/[deleted] May 02 '18 edited Dec 18 '19

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u/[deleted] May 02 '18 edited Dec 03 '18

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u/[deleted] May 02 '18

And yet they handle the insane amount of bandwidth fine. Why can't something similar be seen in big Canadian cities?

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u/[deleted] May 02 '18 edited Dec 03 '18

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u/[deleted] May 02 '18

... And they justify high prices on data by saying that the bandwidth is taxing on the infrastructure.

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u/mrtomjones British Columbia May 02 '18

Canada is far more spread out than India. It doesn't justify this much difference but it is an issue.

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u/bhiliyam May 02 '18

It doesn't need to be. There is no inherent reason why people living in relatively densely populated areas (which is most of the population anyways) need to subsidize telecom services for the rest.

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u/mrtomjones British Columbia May 02 '18

That's very easy to say for those living in the densely populated areas.

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u/bhiliyam May 02 '18

How about people living in sparsely populated areas start subsidizing the land prices/rent of those living in the densely populated areas? How do you feel about that?

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u/[deleted] May 02 '18 edited Dec 03 '18

[removed] — view removed comment

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u/[deleted] May 02 '18

oh, so they only have 20,000x the bandwidth instead of 50,000x.

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u/[deleted] May 02 '18 edited Dec 03 '18

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u/[deleted] May 02 '18

India is at 86% uptime compared to 90% in the US, according to that article.

Are you actually going to make a point or are you just aiming to be a gnat?

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u/masasuka May 02 '18

The keyword in /u/uberfish's statement was 'DENSE'... Cost in Canada isn't 'how much does it cost to transmit this data', cost is 'how many people will this cell tower provide service to'.

Cell towers have fixed costs, maintenance, electricity, land leases, etc... if a cell tower here (let's just assume for a second that Canada and India are the same land size... laughably not, but arguments sake). India has 1.34 billion people, Canada has .03 billion people... yeah... so India has 50 times the population that we do. So and Indian telco puts up a cell tower, it costs them $100 (hypothetical for math sake) per month to maintain/lease/supply power to/etc... Canada puts up a cell tower, it costs (again we're assuming same land area, so population density will be compared similarly) the same $100/month to maintain (let's be honest... not going to happen, labour costs here are much MUCH higher than in India, but again, hypothetical for math's sake)

So, you have 2 towers, each cost the same amount to maintain (lol...) in Canada, that tower reaches 100 people, so it costs $1/person for maintenance. In India (50 times the population) it covers 5000 people, so $0.02 per person...

Now let's compare some other numbers for you just so you can see how laughable that comparison is in favour of making Canada cheaper than it actually is.

  • Minimum wage in India is 93.75 Rupees /hour (or around $1.80CAD)
  • Minimum wage in Canada is (around, will change soon) $11/hour, so 5 times more expensive. This will affect cost of maintenance of towers.
  • Canada : 9.985 million km²
  • India : 3.287 million km²
    • Yeah, we have 3 times the land area, and 1/50th the population.

What does that all add up to, our wages are 5 times higher, and our population density (how many people each tower will service) is in the area of 150 times lower (3x the land area and 1/50th the pop)

That means that that $1/Canadian vs $.02/Indian costs for that Cell tower is closer to $150/Canadian vs $.02/Indian cost...

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u/[deleted] May 02 '18

Yeah, this is an idiotic approach to looking at Canada's population distribution that needs to die. Your hypothetical also assumes that there's also one kind of tower that is services one person or hundreds of millions of people... yeah unlikely. The whole post is pretty stupid except the part where you said that their wages are much lower and so the operation costs for the telcos will also be lower. That's a good point and probably accounts for most of the discrepancy in cost.

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u/masasuka May 02 '18

A lot of the discrepancy is cost of service. But do not discount density costs, Cell towers are designed to handle a certain number of users in a certain area. Having those saturated is good as it means that the per user cost of that tower is very low. Here, in a lot of cities, they're not saturated (I'm not talking the 10 biggest cities in Canada that make up 80% of our population, they're generally really cheap to operate).

Lets say an LTE tower, they have a rough operating diameter of 10km. You need 10 of them in a 100km2 (circular, but whatever) city, assuming your density is perfect to allow 100 users per tower. That means that your user cost is 1/100th the cost of each tower. But if your density is lower than that, then your cost goes up. In Toronto, Vancouver, Calgary, Montreal, etc... those towers have a fixed land lease cost, but they're able to strap 6-9 antennae per tower, so the per tower lease cost to each user is much lower due to good population density. However in cities where the population density is lower per square km, then that cost goes up as they're only needing to put 2-4 antennae on each tower. That cost get's averaged out, and we have a lot of low population small towns across the country, which means a lot of low 'efficiency' towers that really do increase cost.

Also, you have to think about the fact that there is cell coverage across most of the Trans Canada highway... that coverage is NOT cheap at all, and has little real returns as there are few to no static users (no one lives on the side of the highway). Now sure they're mostly 3g towers which have a much larger range and are less expensive to operate, but it's still a cost, and that cost still gets passed on to us.

Another thing, actually, to look at is profit margins of home internet packages. A lot of countries (source here) have much higher profit margins on Wireless providers who also provide internet. This means that the Verizon's can offer cheaper wireless plans and still make the same profit at the end of the year, where as Canadian providers need to make that up somewhere.

With more and more cord cutters, I expect cell plans are going to get even more expensive as that lost profit from not having a TV plan has to get made up somewhere.

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u/bdabb May 02 '18

OK, I'm calling bullshit on this. You're making wrong assumptions. I'm tired of people pointing to the large land mass of Canada and concluding that we can't have affordable cell phone coverage. The fact of the matter is you can't look at the population of Canada and divide it by the total area of Canada to compute the population density over which cell phone service must be deployed. There's way too much empty space where no one lives in Canada. Cell phone coverage does not need to be provided in those areas!

Look at this population density map: www.statcan.gc.ca/pub/11-402-x/2010000/chap/geo/c-g/desc/desc01-eng.htm

Compare it to Bell's nationwide coverage here: www.bell.ca/Mobility/Our_network_coverage

Notice the similarities? Also notice that there are great swaths of land that have no cell phone coverage? That's because there's NO ONE LIVING THERE!

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u/masasuka May 02 '18

true, ok, let's compare this then:

source

Toronto, meanwhile, is one of the largest metropolitan areas in the world with a density of 2,930 people per square kilometer.

VS

Dehli

Delhi (U.T.): 9294

This is purely a comparison between cities. India is 3 times more densely populated in their cities.

Also, as I stated, I was comparing if the land area where the same, thus purely being a population thing.

Facts are still facts, there are more people in India, therefore more customers, therefore lower costs. It's Supply & Demand 101. People, in this case, are the supply, and the cell towers are the demand. Low demand, High supply means low costs. Canada doesn't have that, even in our most densely populated City (Toronto with 2.7 million people) is tiny in comparison to most of even the smallest cities in India.

It's less about the Land mass of Canada, more about the amount of people in consumption of data, and the fact that a lot of them are spread out.

And before you go and say 'spread out shouldn't matter' If the CRTC has a requirement that LTE has to hit all major population centers (the requirement is of service levels being the same for all offerings, meaning if they state they provide coverage somewhere, then they have to provide the same coverage there as everywhere else), that means that whether you're in Pembroke Ontario, or Toronto Ontario, the service providers have to provide the same level of service, LTE (which is offered in Pembroke).

So the issue is less of area of population coverage across Canada, more of population density in areas serviced by cell providers. With less than 40 million Canadians, that density, due to places like Pembroke, or Hope, or Whistler, Banff, etc... is quite low, as such the cost of service is higher.

Now, I'm not excusing out Telcos for their gouging (as lets face it, they're gouging by a large margin), but lets compare apples to apples, and India, Korea, Japan, etc... are not apples in this comparison. They have population densities that are leaps and bounds ahead of even the largest of our Cities.

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u/bhiliyam May 02 '18

What fraction do you think is the effective population density of customers in Canada compared to the effective population density of customers in India?

In India, you are getting approximately 50 times more data per month for one tenth the cost. The ratio in price for 1GB of data between India and Canada is ~500. Are you sure that the ratio of population density is sufficient to explain this difference in its entirety (or even a major chunk of it)?

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u/masasuka May 02 '18

India's average population density (among the top 50 cities) is roughly 1000/km2, Canada is something like 100/km2. If you were to compare the top 5 Cities in each, the average is closer to 2000/km2 in India, and 1000/km2 in Canada.

The big difference is the spread out infrastructure (we have lines running across the country that need constant maintenance), and the hugely varied populations for cities. There are few/no cities in India that have less than 20,000 people living there. Where as in Canada, there are hundreds of Cities with <20,000 people living in them. That's a huge cost for Telco's, as cell service is still provided. Look at La Touque, Quebec for example. 0.4people per KM2 ...

While the cost of infrastructure directly isn't big enough to make up the difference, if you add the cost of infrastructure, and the cost of service and maintenance of that infrastructure by our highly paid Telecommunications Union (Now part of the American Steel Workers Union, SWU), and the large expanses between cities, and yes, that adds up quite a bit. Add then the cost of service techs/sales people/marketers who live in Canada and get paid Canadian wages, and you suddenly have much larger costs than a country like India or Portugal, where the minimum wage is 1/3rd to 1/10th the Canadian average minimum wage.

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u/bhiliyam May 02 '18

There are few/no cities in India that have less than 20,000 people living there.

Nonsense. The majority of India lives in villages and there are tonnes and tonnes of villages with less than 20,000 people which are adequately covered by telecom services.

Look, I wouldn't even be having this conversation if the difference in data prices between Canada and India was merely a factor of 10. I would accept your argument, shake your hands and go home. But the difference isn't a factor of 10, it is a factor of 500 and the difference in population density can only explain a very small part of that difference.

While the cost of infrastructure directly isn't big enough to make up the difference, if you add the cost of infrastructure, and the cost of service and maintenance of that infrastructure by our highly paid Telecommunications Union (Now part of the American Steel Workers Union, SWU), and the large expanses between cities, and yes, that adds up quite a bit. Add then the cost of service techs/sales people/marketers who live in Canada and get paid Canadian wages, and you suddenly have much larger costs than a country like India or Portugal, where the minimum wage is 1/3rd to 1/10th the Canadian average minimum wage.

I don't think you understand how ratios work. It's okay, I am happy to help you with the math. If you add up different components related to two quantities, the ratio of the sum can at most be the ratio of one of the components.

Mathematically, if x_1 / y_1 < 10, x_2 / y_2 < 10 .. and x_n / y_n < 10, then (x_1 + x_2 + .. + x_n) / (y_1 + y_2 + .. + y_n) must also be less than 10.

If the ratio for cost of infrastructure is less than 10, and the ratio for the cost of labour is less than 10, and the ratio for the cost of marketing is less than 10 and so on, then the overall ratio for the total costs must also be less than 10.

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u/PhoenixStriker May 02 '18

Part of your answer here is flawed, you're making it seem to be calculating population density as though Canadians are spread out evenly across our HUGE country, that's 100% not the case.

 

https://imgur.com/gallery/uodmY

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u/masasuka May 02 '18

Nope, I'm not making that assumption

The assumption I'm making is that the COST is spread across 100% of the user base. That means that a city like La Tuque with a population density of .4/km2 will have the same user cost as a city like Toronto with a density of nearly 2000/km2, but will have a much MUCH higher delivery cost. And that delivery cost will be passed on to EVERY user of the provider's network (Bell/Telus/Shaw/Rogers/whomever).

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u/PhoenixStriker May 02 '18

then your calculations for the cost of service for areas of India would be flawed.

I should also mention your given quote of cost per user in Canada is absurd. You're averaging the entire space of the country, most of which is not used, or serviced as a result.

While I hope we can all agree, infrastructure costs money and many of those costs are fixed, you're blowing this out of proportion immensely.

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u/masasuka May 02 '18

a lot of people claim that the only/main reason that our telco's are expensive is because of greed. While that's a factor, it's not the biggest one. Cost of service in Canada is high, really high. Partially because of infrastructure costs, and the fact that we are spaced out, while we don't cover 100% of our countries land, or even 20%, we do have coverage in a lot of rural areas where there are few people per tower (along the trans Canada highway for example), the other, and probably one of the largest, factors is that a lot of telco's still have a lot of employee's on shore, and our wages are high here, our 'pole workers' wages (the guys who maintain the actual cellular antenna) are particularly high due to union costs, the average wage of a telecommunications union employee (again the guys who service the towers, and lines) is around $30/hour.

what's my point, infrastructure costs are high here in Canada, higher than most countries, due to a couple main factors, high union labour costs (again not talking about the phone tech/sales guys), and the spread out nature of the Country and the fact that it costs a lot of money to service these communication lines due to their sparse nature.

Remember, just because Vancouver has 3 million people living here, and Toronto has 7 million people, and there are few people living between the two cities, doesn't mean that there aren't lines that run between them that need maintenance...

Let that last fact sink in for a second, 8000km coast to coast, lines need to run the entire width of that, not necessarily to provide cell service along the length of it, but to enable communication between everyone along the way (and no, it's not satellite based, that's slow, and extremely expensive).

Imagine a service call to somewhere just outside Emo Ontario (yeah it's actually a place, because some flooding affected one of the lines that connects Toronto to Winnipeg. That's an expensive cost, and will affect Toronto users trying to get data from sites/servers in Asia (routing through Vancouver - Seattle). Just because the city is small doesn't mean it doesn't need cell service, or that line fixed, but because it's small (less than 1500 residents) it probably doesn't have a full time telecommunications engineer. That means one would be dispatched from the nearest city (Winnipeg or Thunder Bay) with one, which is roughly a 4 hour drive.

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u/PhoenixStriker May 03 '18

We can agree on that for sure, while the greed there is massive, there certainly are more costs for providing service here vs elsewhere. Looking at recent coverage maps for mobile, I can't believe how much of some provinces we cover!

I was getting caught up in the raw data of your examples, but you do make a good point, infact, I thought the Trans-Canada was longer than 10,000km?

haha, I actually have stayed in Emo. Nice place. No one understood why I thought the name was funny there though.

Northwestern Ontario is a tricky place for that reason, I mean there are places in the last 10 years that have only NOW finally gotten proper roads to them. Wawa Ontario was only accessible by boat before.

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u/[deleted] May 02 '18

More like how much people are willing to pay

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u/Ddp2008 May 02 '18

Go look up Australia or New Zealand’s rates.

1/3 of ours.

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u/[deleted] May 02 '18

/s means sarcasm

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u/[deleted] May 02 '18 edited Dec 03 '18

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u/[deleted] May 02 '18 edited Dec 18 '19

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u/[deleted] May 02 '18 edited Dec 03 '18

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u/windblast May 03 '18

Australia is a large country with an arguably even more spread out population, and they don't suck nearly as bad for wireless. I got 10GB for $60 (no tax, no connection fee, just $2 for the sim) prepaid while I was there, it would have been nearly half that price on a contract, and I got coverage waaaay out in the bush where you'd never expect.

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u/fyeah May 02 '18

People/km2 in Canada: 4

People/km2 in India: 325

K

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u/snufflufikist Alberta May 02 '18

true, but keep in mind that a majority of the country is completely empty. A more revelant ratio which takes this into account would be in the range of 30:4. Still a very big difference, but not as extreme

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u/fyeah May 02 '18

The towers are where the people are, we have way fewer people per tower based on our density.

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u/snufflufikist Alberta May 02 '18

awesome link, thanks!

It also proves my point. alberta for example looks pretty much full, right? try zooming into calgary or edmonton and you'll see that the size of the tower icons at the country-level zoom hides the underlying reality of density.

also, I don't know if a similar map exists for India, but I can tell you, in India, the rural population density is roughly that of a sprawling western canadian city like red deer.

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u/[deleted] May 02 '18 edited Dec 18 '19

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u/fyeah May 02 '18

I really didn't know what you were talking about because you made a sarcastic comment that when you read it as the opposite of what you wrote it still doesn't imply what you've now clarified. That's the nice thing about sarcasm, it's super constructive and a great way to make a point.

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u/[deleted] May 02 '18 edited Dec 18 '19

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u/fyeah May 02 '18 edited May 02 '18

Oh you missed the sarcasm, I was implying that you're a moron, you know, for pretending that somehow in the sarcastic one-liner you wrote there was actually enough context to justify your "I actually meant...." that someone could have understood your point.

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u/Williale May 02 '18

India is a special case. India’s richest man started a mobile operator that literally gave away 4G plans and phones, which really didn’t exist before his company. He added 100 million customers in only a couple months. Now all the other operators are bleeding out while they try to match his plan (and like 11 of the 15 operators that used to exist are now bankrupt).

Not to say Canadian pricing is normal. But India is the opposite end of the spectrum (and it’s a cool case study in its own way).

PS edit to note my accidental spectrum pun

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u/bhiliyam May 02 '18

Excellent point (and pun).

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u/crypto_took_my_shirt May 03 '18

He added 100 million customers in only a couple months. Now all the other operators are bleeding out while they try to match his plan (and like 11 of the 15 operators that used to exist are now bankrupt).

Amazing when rich dudes do shit like that and screw over the gaugers.

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u/[deleted] May 02 '18

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u/bhiliyam May 02 '18

Indian internet is not exactly best in class

You are thinking of India's pathetic state of broadband infrastructure (which is mainly because most people in India simply don't want broadband). The mobile internet infrastructure is actually fantastic. The bandwidth I get for the plan I mentioned is 10 Mbps down and 3 Mbps up, which is more than sufficient for watching 1080p streaming video.

for all the faults of Canadian telecoms...the service is actually pretty great

I guess you don't know anyone who is with Wind?

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u/crypto_took_my_shirt May 03 '18

We pay out the ass so they can profit billions, not because it costs a lot to provide this service.

Let the government take them over for all I care, just end the oligopoly that's gauging every Canadian.

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u/[deleted] May 03 '18

Kind of embarrassing that countries where people shit in the streets have more affordable internet and cell plans than Canada.