First check out this density map: http://maps.howstuffworks.com/north-america-population-density-map.htm.

Looking at the map, it seems reasonable to conclude the respective 3G networks in both countries will focus roughly on the orange areas. Agree? But even with Canadian's living close to the border, the population density is still very low compared to America. Just look at all those really profitable dark orange areas in America!

To me, it looks like regardless of where Roger's plunks down a cell phone tower, each tower is going to (on average) serve far less people than each AT&T tower that gets plunked down in America. Thus the cost of the network in America is a lot more profitable, and prices for subscriptions can go down a lot. To me this is so trivially obvious!

So, I think Canadian's should be thankful that Roger's invested in a 3G network at all. It must have been very expensive for them to build, and my if they were to match AT&T's rates, they would go bankrupt.

Furthermore, this also explains why cities like Hong Kong get such great rates compared to Americans... 7 million people in a single city state. Very dense network that is extremely profitable from a "per tower" perspective.

If you buy and Ipod then you deserve to be ripped off.

Problem with both maps is that there are density dots that show you an idea of what the populations areas are so it really comes down to opinion. If you really want to get into some actual numbers, try looking at the biggest cities in both countries. These only list the true city populations, that don't include the outlying areas. For example, Los Angeles has 13 million people, but the downtown is 4 million. Vancouver lists 1.8 million, but the region is over 4 million.

http://www.citymayors.com/gratis/uscities_100.html

http://www.citymayors.com/gratis/canadian_cities.html

If you use these numbers and sum up the top 30 cities in both countries, you'll find that the biggest 30 cities in America have a population of 36.9 million (core populations), while Canada's top 30 cities have a combined population of 14.3 million. According to this, American top 30 cities are 2.57 times bigger than Canadian's top 30 cities.

It is scary to know that little Abbotsford is Canada's 26th biggest city (in 2003) with a population of 136,000. Grand Prairie Texas also has a similar population, but is ranked US's 166th biggest city.

Again, this proves that there are far more opportunities for profitable cell phone towers in far more cities. Both Rogers and AT&T have to build 3G networks that encompass a broad area, not just the biggest cities. But America has 166 cities that are all bigger than Abbotsford and the profits from the networks of those cities offset the losses incurred by smaller cities and rural areas in the network. Like I said before, Canada doesn't have enough major profitable network cities to offset the cost of the unprofitable lower density areas in their network, where America has far more profitable areas to carry that weight.

The differences are huge! But the price difference between Roger's plan and AT&T's plan isn't nearly as drastic. AT&T is guaranteed to be making far more profit than Roger's is, who is lucky to be breaking even.