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Proposed Budget Includes New Spectrum Fees

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This will send ripples threw the entire industry.

stevelvl

Feb 26, 2009, 3:47 PM
The profit margin is so low in the industry in the best of times. This will defiantly mean a huge change in the industry. Lets say a carrier like ATT has 60 million customers(I am not sure what the exact number is). Currently the average customer pays 83 cents for there share of the license fee. That will now jump to $9.17. That is a huge jump.
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www.bpvwebdesigns.com

Feb 26, 2009, 4:30 PM
Its highly unlikely that a customer will be hit up for that amount at one time. If you divide your theoretical number by 12 months you get a figure about 77 cents. This will probably be rolled into something else, or at worst tacked into the FUSF.

The wireless industry is not slim on profits by any means. True they are cutting their levels of margins on voice, but the data is helping make its own cash cow. Do you know what the carriers cost to deliver a text message is, or process data over the network? Data takes up much less space on the cell channels on the tower, and therefore cost less to process. At the moment data is being priced more than voice calls in many instances. IIRC the cost 2 the carrier to process a text was less than a ...
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asLeepLessman

Feb 26, 2009, 4:34 PM
Thanks....Good info here.....
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Menno

Feb 27, 2009, 9:15 AM
only half of it though.
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mosherkl

Feb 26, 2009, 7:52 PM
The cost to process A text may be cheap, but the method for delivering said text is ancient in this industry and hasn't changed. In this particular case, the users aren't paying for the data, but the "privilege" of using the transport method.

Look at it this way. A since CDMA channel being transmitted on a site can theoretically process on the order of 100-110 calls simultaneously. This will vary depending on noise and interference and averages more about 50-60, but doesn't hurt my point. This same CDMA carrier can simultaneously process around 5 text messages. Again, simply due to the method of transfer which hasn't changed since CDMA was deployed (there have been some additions to allow multiple text messages...IIRC the original CDMA sp...
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Menno

Feb 27, 2009, 9:14 AM
Data costs less, but the towers and network coverage required to provide it is signifigantly more expensive.

If texting was just a thing people did every now and then, they could get away with using normal towers, but people want to surf online, they want picture messaging, and thousands of people in a given area are sending hundreds of texts a month. Yes, it is less than a voice call but that doesn't mean there isn't a volume issue. And that is disregarding mobile "instant messaging" and high end features like mobile video, mobile tv, etc.

Data is more profitable than voice, but it's nowhere near pure profit.
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stevelvl

Feb 27, 2009, 9:52 AM
You really have no idea how the industry works at all. If a customer never sets foot inside a store, never calls customer care, never has any issues wit there phone on average it costs a wireless company 36$ a month to maintain that customer. This is due to the cost of network infrastructure, back hall, regulatory fees, taxes and so on. For the majority of a wireless carrier they loose money on a customer and customers who are on family plans are the worst. In addition 7 out of ever $10 spent by a wireless company go to network operations costs. You mentioned carriers are making money off text messages, well yes they use the profit from the text messaging to off set the loses on the voice service side. The big three wireless companies Sprint...
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Ghosthendrikson

Feb 28, 2009, 12:03 PM
I agree that the cellphone companies will do their best to pass the new costs onto the consumers, that is just life.


However, I think your extropalting the effects a little too far. I have hard time believing that you would see anywhere near 6 million people scrutinize their bill hard enough to detect a .77 cent increase in their bill.

I don't see this getting a whole lot of public attention, unless Chris Hanson gets his hands on it.
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Jayshmay

Mar 1, 2009, 12:59 AM
Who is Chris Hanson? And how sure are you guys that this will only result in a .77 cent per month increase?
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mycool

Mar 2, 2009, 9:58 AM
stevelvl said:
You really have no idea how the industry works at all. If a customer never sets foot inside a store, never calls customer care, never has any issues wit there phone on average it costs a wireless company 36$ a month to maintain that customer. This is due to the cost of network infrastructure, back hall, regulatory fees, taxes and so on.


https://www.phonescoop.com/carriers/forum.php?fm=m&f ... »

$36 is a bit high. If I remember correctly customers on average were costing $27/month to maintain. Has it really gone up $9/month on average since last year!?

stevelvl said:
For the majority of a wireless carrier they loose money on a customer and customers who are
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