UPDATED: 3.30PM Wednesday 19 October
Couple of quick answers to questions we’ve had recently about this analysis. This has been picked up in a lot of places so that’s great to see, but this is a look at step 1 of an NBN price plan rollout for consumers.
What is Per Gigabyte Pricing?
There’s been a lot of comments on different articles about this. Many people quoting their own broadband plans and their price and usage.
What we did is look at the current ADSL 2+ plans (bundle prices) and Naked DSL in tiers. If it was a 0-50GB plan, it went in the 0-50GB tier.
Here’s a great example of how this works.
Spintel and Dodo both have $0 Broadband offers on our site for ADSL 2+ (sorry to single you out!). So, how can anything be cheaper than that?
Well, to get both these plans you need to move your home phone line rental over to them.
So, the SpinTel line rental (mandatory) on this offer is $39.95.
The plan has 20GB of data and this means 20GB costs you $39.95 per month. This works out to a per GB price of ($39.95 / 20) $1.99 per GB. That’s the way the ACCC wants it understood as well.
The contrasting example is Exetel’s NBN entry level plan which is 20GB for $34.50 with no line rental required on the NBN, therefore is $1.72 per GB.
There are set up costs too on a contract. We threw them in as well to get the per GB price on the contract.
Then we threw all the prices into three usage tiers for comparison against the NBN (it obviously gets cheaper the more GBs in your plan…20GB might cost $40 ($2 per GB) per month and 200GB might cost $80 ($0.40) so you can see that the per GB price comes down the more you spend and the more data that is put in your plan).
What About My Broadband Plan?
This analysis only looks at the 4 providers who’ve announced their prices for the NBN and what they charge for bundles and Naked DSL vs. the prices of their NBN plans. The quoted per GB prices for ADSL2+ are from those 4 only and not an average of 200 ISPs out there so it is likely your ISP is not in there yet.
PLEASE NOTE – This is a moveable feast, when a new provider announces NBN plans, we’ll add both the NBN plans AND their original ADSL2+ bundle prices and Naked plans to the mix.
Why Bundles?
The core infrastructure of the NBN is fibre meaning no copper phone lines required whereas you need a bundle or Naked DSL to get ADSL 2+ today – that’s what we compared – the rolled up cost you pay today vs NBN plans
Is this Political?
Ahh…we’re a price and service comparison site and we look at the data available from a consumer point of view. We are not commenting on the politics of this, just what has been put in front of consumers. The choice of households for the rollout is already being called political, but this is just about the prices for the reality that now is the NBN.
Why?
There are 485,100 premises to get the NBN in the next 12 months. We’d say it is time to start looking at the prices for consumers. We’re adding them to our comparison technology also right now.
Wireless Vs. Fibre.
At the end of an ABC interview yesterday, I was asked an off-hand question about wireless vs fibre.
The whole interview and analysis had been about the ‘tiers’ on the NBN price plans for consumers (12Mbps, 25Mpbs, 50Mpbs and 100Mbps) and their relative price points today. The top ‘tier’ fibre I referred to was the ‘price tier’ of 100Mbps as we tiered them in our analysis.
We’ve seen mobile data speeds of 3.6Mpbs when we first started showing mobile broadband plans on our site to now up to 42Mbps in just 3 years.
Therefore by the end of the NBN rollout (10 years) and with the top of the 4 published tiers on the NBN of 100Mbps, I’d stand by the comments that yes, within 10 years, it’d be strange if the innovation slowed down and wireless was not faster than the ‘advertised top price tier of 100Mbps in today’s fibre plans’
This refers to the price and speed tiering and not theoretical speed limits of fibre and wireless technologies.
I would imagine that on their own, the words ‘top tier’ would give connotations of the ‘best ever’ fibre connection as in ‘top tier scotch’ is the best money can buy. I was referring to the top tier shown in the price plans on the NBN of 100Mbps.
Yes, I think wireless in 10 years could challenge that 100Mbps given the speed increases we’ve seen in just three short years (check our Vivid Wireless for example), but wireless is a different type of connection to fibre. On today’s products, I’d take fibre in my home without hesitation.
Conversely, it would be nuts if the NBN fibre connection was not running faster than 100Mbps in ten years time. I’m sure it’ll be upgraded for faster speed offers, perhaps many times. That seems natural from a pricing / innovation trend perspective. Top tier right now is top tier plan of 100Mbps and even that seems strange given promises of 1Gbps in the election.
Yes, to those who rightly pointed out I had compared increasingly wireless innovation and speeds and had not mentioned that the NBN could also increase in speed. Completely agreed…It’d be a waste of money if doesn’t get faster too. Top tier referred to the today’s top tier only.
The University of Melbourne has been in touch about a paper on the merits of wireless vs fibre and you can find that paper here. If you’ve come to WhistleOut for a debate about wireless vs. fibre, you’re at the wrong place. We compare the prices for consumers for broadband and we’re not debating network theory.
UPDATED 2PM Tuesday 18 October: This analysis has been published on news.com.au and is getting lots of comments. Thanks to those people who commented about one of the price points as it was not the figure we supplied and we’ve asked for an update.
With a minimum data speed of 12Mbps, users that reach their download capacity of 50 gigabytes will pay approximately $100.50 on ADSL2+ plans offered by Exetel, Internode, iiNet and iPrimus
The correct figure is $59.14 as an average of ADSL2+ Bundles and Naked DSL (inc. line rental and set up costs average across contract length) on Exetel, Internode, iiNet and iPrimus and average of $48.46 on the NBN plans for 12Mbps.
ORIGINAL POST
We’ve had a good look at the consumer prices already published for the NBN and compared this to the prices people already pay for their ADSL 2+ plans and Naked DSL (we combined these prices to get an average of what we pay now per ISP).
There are a lot of intersecting points with this analysis and we’ve laid out what we’ve analysed below.
Our analysis only covers consumer price plans for the NBN and ADSL 2+ and does not provide any analysis on infrastructure costs or underlying cost differences between what is charged by Telstra for wholesale access today and what will be charged by the NBN Co.
We currently compare consumer broadband plans only and we’ve compared this to the NBN prices that have been published by 4 ISPs (iiNet, Internode, iPrimus and Exetel).
Yes, these prices will change…they’ve already changed once before the NBN even commercially launched, and they’ll change again. Therefore, the results we’ve found today will change as more ISPs release their NBN pricing and we will release multiple updates.
Levelling the Playing Field
1) What People Pay Now
The majority of Australians already pay line rental on a monthly basis for a ‘bundled broadband plan’. A typical consumer might pay $50 for Broadband and then also pay $29.95 for Line Rental for the copper line on which their broadband is received and may get 50GB per month of usage.
For 50GB of broadband access you’re paying a total of $79.95 per month. If you’re on Naked you might pay $69.95 for 50GB from that ISP. We rolled all of these plans (Naked and Bundles) together to get a ‘what you pay now per GB‘ for each of the NBN ready ISPS.
From a consumer’s point of view, what we all already pay right now for broadband includes line rental for the majority of Australians. For example, TPG’s Unlimited ADSL 2+ plan was advertised at $29.95 per month on the back of the Sydney’s buses and on radio / TV, but ran afoul of the ACCC as the price for the unlimited ADSL is actually the full price of $59.99 as line rental must be included if it is required for that broadband access. On this basis, we’ve included line rental in our analysis where it is applicable as it is what people pay on their broadband bill.
2) Naked DSL is Not Entirely Naked
Many people already pay only for Naked DSL broadband in which the monthly price is lower, but there is still a copper line rental cost to the ISP and therefore to the customer. This can be seen in the fact that Naked DSL plans are usually only $10 per month cheaper than a bundled phone line plan, not $25-$30 cheaper.
We analysed the aggregate costs per GB of usage for existing ADSL 2+ Bundles AND Naked broadband from iiNet, Internode, Exetel and iPrimus to get a cost per GB and run this against the NBN plans which have no line rental cost as the fibre connection provided by the NBN is the ‘phone line’ of the future.
The future NBN environment will be more closely matched to Naked DSL where there is no line rental charged to the customer and that will mean most people move from today’s bundle plans to broadband and voice access from the NBN with no additional line rental costs as copper lines are being made redundant with the new fibre infrastructure. Millions of households will face the switch from copper to fibre and dropping their line rental costs for good.
3) Prices Will Change!
Prices will always be moving around and will probably come down. Prices have been moving non stop with ADSL 2+ and have come down considerably in the past 3 years (especially as the big 3-5 jostled for position and market share). We’ve made in-numberable changes to ADSL plans and prices on our site.
The NBN
There’s a lot of things about the NBN that provide context to this analysis. Depending on who is in government, the NBN may never be completed or may be reduced in scope and this may reduce the cost to build and cost to access for ISPs and consumers.
- The NBN sets out to be the core telecommunications infrastructure for Australia’s immediate future. This replaces the existing PSTN copper line to your home.
- The NBN Co. provides the access and then an ISP like Telstra, iiNet, and many more will resell this access. The speed and quality of access will be relatively universal so the quality of access should be entirely commodotised. The network and traffic management done by an ISP may affect the speed and quality of the connection for a consumer but this is yet to be seen in reality.
- Marketing, customer service, content bundling, VOIP plans and other elements will be the key choices for customers as the broadband access will be common across ISPs.
- The prices charged by NBN Co. to ISPs for access would be far cheaper if it only had to cover metro areas and not provide national coverage as there is significant cost in connecting 93% of the population to fibre across this huge and sparsely populated country. If it was metro only, a new broadband network would be cheaper to build and cheaper to access for consumers.
- However, the NBN is national and the NBN Co. Business Case shows that the price for the entry level plan (12Mbps) will be the same in the metro areas as it will be for satellite access in the most remote areas. This may be seen as admirable and democratising or may be seen as the metro areas subsidising the regional areas.
