How Much Does Northwestel Markup Data?

A piece in the Globe and Mail, “What is a fair price for Internet service?” by Hugh Thompson, revealed a truly interesting tidbit that Northwestel has been somewhat resistant to discuss: how much it costs to transmit 1 GB of data.

Here’s the relevant paragraph on this question from Thompson’s article:

To find out what is a fair price, I contacted several industry insiders. They informed me that approximately four years ago, the cost for a certain large Telco to transmit one gigabyte of data was around 12 cents. That’s after all of its operational and fixed costs were accounted for. Thanks to improved technology and more powerful machines, that number dropped to around 6 cents two years ago and is about 3 cents per gigabyte today.

3¢ per GB? That’s a chilling number, when you consider  that Northwestel resells it to internet customers for $10. In a nutshell, that means that Northwestel marks up the cost of the data that it doesn’t even provide, but merely transmits, at a rate of 33,233%.

6 thoughts on “How Much Does Northwestel Markup Data?

  1. Pingback: The Cost of Bandwidth: Yukon Versus the World (update) « Geek Life

  2. Thanks for this Andrew. It is frustrating to have information like this but be completely helpless to change anything. The caps Northwestel places on us are also arbitrary and appear designed to dissuade the arrival of technologies that compete with their other interests.

    I keep hearing how each company is a “separate entity” but my belief is that the parent company is watching and controlling the bottom line for all of them.

    Thanks again.

  3. Is that comment from the article talking directly about the cost for telcoms in GENERAL, or NWTel specifically?

    I lived in Rankin Inlet, NU for two years, and don’t get me wrong, I loved to hate on the cost and speed of internet when I was there.

    However, much of Nunavut is served by Qiniq, the exception being Iqaluit. And Qiniq sends all its data by sattelite, which as I’m sure you can imagine is IMMENSELY more expensive.

    Maybe the NWT/Yukon has cable laid down, so you guys are running on fibre optic (or whichever) instead of sattelite, but I remember doing a story (I’m a reporter) on the finances of Qiniq — and they were running themselves into the red because the cost of transmitting data via sattelite was so much higher than their profits.

    Just a thought 🙂

    • The G&M story refers to a specific large Canadian telecommunications carrier, most likely Bell. It’s worth remembering that Northwestel is a wholly-owned subsidiary that delivers significant profits to Bell.

      In the Yukon we do have a full fibre connection to the South that was completed just over a year ago.

  4. Pingback: Northwestel Complaints

Comments are closed.