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.”