the economics of land lines vs. cell phones

Three quarters of the world’s population now has access to cell phone service.

Which brings me to this question: Starting with a city that has no phone service whatsoever, what is the per-user cost of installing a landline phone system to service all the residents, and how does that compare to the costs of installing cell phone service instead?

It would be cheaper to install cell phone service for one main reason: The heavily populated areas already have phone service. If there really was a large city without any phone service, the phone company would probably install cell phone service because some customers would want both cell phones and land-lines.

Otherwise, it depends on density. Let’s say that a cell phone has a range of 8km. If your nearest neighbor is 9km away, it would be cheaper to build a land-line to your house. OTOH, they could install a mini-tower at your house just to serve you and transmit your signal to another tower 20 miles away. Conversely, if the cell tower could service a sparsely populated town of 500 houses, the one cell tower is cheaper than 500 land lines.

I have heard of a case where a person wants a land-line (and internet) installed but his land-line only goes as far as the nearest cell tower. From there it’s a digital signal to the rest of the world.

I don’t have cites for costs or anything, but for a fully built city with no service of either type, cell service costs are going to be the costs of building the tower, running the wires to the tower back to the main switch location, and the cost of the over-the-air frequencies that are usually auctioned off by the government.

Land lines require wires to be run to every single building in the city. I’d be surprised if that was really cheaper, particularly if you’re trying to do it after the city is already built.