Popluation density doesn't completely explain it. For instance here in Sweden we also have 100Mbps Internet-connection for about $20-$30/month and flat-rate 3g data-plans and we aren't exactly densily populated (#192 in the world according to Wikipedia http://en.wikipedia.org/wiki/List_of_countries_by_population...). Here I think it has a lot to do with the fact that government has been pushing a lot for better IT-infrastructure.

I'm personally I strong believer in the free market, however sometimes the market is too short-sighted to make investments that will benefit society in the long run. Infrastructure and education are good examples of that. It's hard for private investors to get good ROI on things like roads, IT-networks and schools because it takes many years to get any return and it's hard to charge people as much as it actually benefits the public.

I saw and interview with Bill Gates where he basically said that this was his rationale behind the Bill and Melinda Gates Foundation. The market simply doesn't maximize the amount of lives saved per dollar and you need non-profit organizations to do that.