One, anything telecom related tends to be much more expensive here than almost anywhere else in the world. For example the best home connection I can get right now is 1Mb/s down 128Kb/s up with a 12GB/mo data cap for ~35$/mo. And that's DSL, for 3G(whose coverage is spotty at best) it's a 100MB/mo cap for 10$/mo(above and beyond the 20$/mo just to have a cell phone line). My cell phone bill regularly ends up in the 80-100$ range and I don't talk that much on the phone, people who do end up closer to 150$.
Two, and this flows from one and the fact that salaries here are about 1/3rd of US ones with comparable cost of living; any talented people that have options will just say "fuck this"(possibly turn over a table as they get up) and just leave. I regularly half-joke with foreigners I meet that our main export is engineers. Through college I met about 5 people who I'd consider co-founding something with. Of those 5, one is now in new york, another is at Intel, a 3rd is in france doing graduate studies and the other two left but I've lost touch with them. This even extends no non-computer fields and basically anything that requires high skill-level(so any engineering field, business consulting, finance, etc...).
The startup I'm working at now is actually based in the states. The founder is Lebanese-American and a mutual friend introduced us. We're trying to start something here(we're currently only 2 guys). My hope is that people eventually realize that programming can be done from anywhere and they don't have to go to SV and we might have a viable startup culture at some point. We're still very far from that point though.