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Where your monthly cell bill actually goes

In Canada, we pay big bucks every month for our mobile phones: system access fees, data plans, bundle plans, minutes, texting etc… where does all the monthly we pay our beloved carriers actually go? Wireless North has compiled a nice pie chart to understand where our hard earned dough ends up… how much profit do they make and how much it actually costs to run a wireless network.

“Lets use the nation’s largest carrier Rogers for an example. All figures drawn from Rogers Communications Inc. wireless division Q2 2008 published results.Rogers average revenue per user is $75 this quarter. So, for your $75 you spend on your Rogers bill here’s were it goes:

General overhead, shiny offices, salaries etc: $30
Cost of sales (Direct costs, electricity bill for those towers etc.): $7.69
Marketing (You might have seen some): $7.44
Depreciation (Infrastructure cost of the network): $6.06
Debt (interest on loans for past spectrum auctions and investments): $3.55
Profit (before taxes): $27.89

All said and done, nearly 90% gross margins before all those fixed costs come in to play is quite a business to be in.”

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  • Discussion

    2 comments for “Where your monthly cell bill actually goes”

    1. [...] North via MobileSyrup) Permalink Post Comment Posted by Simon Sage in News, Wireless Industry [...]

      Posted by What goes into a Rogers bill | BlackBerry Cool | August 27, 2008, 10:16 am
    2. Sure gross margin is HUGE – there is no incremental cost to adding subs…the business is almost entirely fixed costs, nothing earth shattering here…

      roughly same cost to run the business whether there are 1M subs or 5 million…

      Reply

      Posted by John | August 27, 2008, 3:50 pm

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