Why does ADSL cost more than ADSL2+?

It’s not an illogical question to ask, and we at Compare Broadband hear it all the time. If ADSL2+ is much faster than all four ADSL1 speeds, then why is ADSL2+ cheaper?

It is a strange phenomenon. Usually in life when you compare the better version of a product with its inferior counterpart, you’ll reasonably expect the higher quality version to have a more expensive associated price.

A Ferrari will always cost much more than a Toyota, but ADSL2+, which runs at speeds of up to 24,000kbps, is cheaper than ADSL1, which delivers broadband at speeds of 256kbps, 512kbps, 1500kbps, or 8000kbps.

The answer for this situation is relatively simple. ADSL2+ is basically located in densely populated areas, like metropolitan cities, where there are many people desiring the service, as well as much more competition between broadband providers. When there is both strong demand and a large supply, it is often the case in economics competitors will slash their prices in order to attract buyers.

For this reason ADSL2+ providers have been reducing monthly fees and increasing data limits at an exponential rate in order to achieve greater customer numbers.

For example, TPG now has a home phone bundle for $29.95 a month with a truly unlimited data quota when combined with a $30 TPG landline phone rental. If this plan is available in your location, you can get the fastest ADSL speed possible, yet never have to fear about it being slowed down, or receiving excess usage charges. Call Compare Broadband on 1300 106 571 to find out more about this TPG plan.

This plan is amazingly cheap, and as wholesale costs are often higher than these discounted prices, the main way TPG makes a profit is by attracting a large amount of customers. If a customer cannot get ADSL2+, they will probably sign up to a more expensive TPG ADSL1 plan, and if people do sign up to a phone bundle, TPG hopes they will make some profit via phone call costs.

ADSL1 is the fallback option for those of us in Australia who currently don’t have access to an ADSL2+ connection. If you are in an outer suburb, live in a regional or rural area, or have an infrastructure problem on your copper phone line cabling (E.G. You are on a pair gain, sub-exchange, RIM, or live quite far away from the phone exchange), an ADSL1 connection is what you should connect to for broadband.

As these locations usually have less people per square kilometre, there is much lower demand for broadband, as well as less competition between providers for customers. Therefore, the slower speeds cost more than the super-fast ADSL2+ alternative.
Most people who can only get ADSL1 go for a 1500kbps speed connection, as it’s still pretty fast, and not too exorbitantly priced. If you can afford a premium priced service, you can ask about an ADSL8000 speed. This latter connection is as close to ADSL2+ as you can get for people in marginalised situations.

Before signing up to an ADSL256 or ADSL512 plan because of its cheaper price, you should note the further you are from the phone exchange, the less of the total speed will reach your home. If you plan on using VoIP (making phone calls over the internet), or want to watch YouTube videos, you wouldn’t want anything slower than a 1500kbps connection.

iiNet
(1300 106 571) has a good ADSL1500 bundle for $49.95 a month with 100GB of data (split 50GB in peak and off-peak). This is bundled with either a $29.95 phone line for 20 cent local phone calls, or a $31.95 landline with 17 cent calls. iiNet also has great deals on unlimited local and national calls if you add its $9.95 monthly Netphone VoIP service to your bundle.

When you cannot get ADSL2+ in your location, ADSL1 is a much better alternative than mobile wireless broadband. ADSL1 is more stable (less drop-outs), you get more download data, it’s faster, and it’s relatively cheaper.

You should only turn to mobile wireless if you travel away from home a lot, or if ADSL1 isn’t a viable option in your vicinity. However, this could change in the future with the development of so-called 4G wireless technologies like WiMax and LTE, which purport to be more stable and much quicker than current mobile wireless connections.