In Business Model, Internet Access, Mobile

Mobile networks always have been lower cost platforms, in terms of capital investment, compared to either telco or cable TV hybrid fiber coax networks. Just how big a difference is illustrated by new data issued by the Canadian CRTC.

Capital investment by Canadian mobile operators is about nine percent of revenues, says the CRTC. By way of comparison,  Canadian telcos tend to invest about 40 percent of revenues on their networks, while cable operators tend to invest about 45 percent of revenue, CRTC notes.

Cable networks have historically been less capital intensive than telecom networks. But cable operators also are energetically investing in gigabit internet access, while most telcos are more measured in their spending. In part, that is because of the high cost of upgrading copper to fiber access facilities.

But telcos likely also are measured in their assessment of revenue upside from fiber upgrades. In other words, they might rationally conclude that there is no business case for rapid fiber upgrades, especially given revenue declines and a cable TV advantage in internet access and video services.

source: CRTC

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