Will the NBN be more expensive?

  • Top speeds 8x ADSL average
  • Same price for better value
  • NBN not yet widely available

There’s been a lot of chatter lately, especially in political circles, about the value of the National Broadband Network (NBN). In a nutshell, the coalition opposition would like to take a smaller approach, using much of the infrastructure in place, and allowing the market (ie. Telstra, Optus and everyone else) to work out the best deals amongst themselves.

The Labour government, however, has pledged some $39bn to install a complete replacement to the current infrastructure, to remain in government hands for 30 years, and to only provide the backbone- with no retail front end that competes in the market. The Labour government has been careful to point out that this is investment in infrastructure, not strictly a commercial investment, though they do expect to recoup costs before the network is eventually privatized.

Putting aside questions of politics, the real question – will this benefit the consumer? One of the arguments to date has been that current speeds are good enough, and relatively cheap. The NBN plans would be prohibitively expensive. Let’s see if this holds water. We’re going to compare big, high-data plans on the NBN and ADSL, with a few providers who have released their initial pricing:

Optus

ADSL - $109/month. 500GB (250 peak/250 off peak), including line rental, free modem, all phone calls, 24 month contract. Top speed available = 24Mbps. Average speed is probably 12 Mbps. (ADSL speeds are reliant on distance from the telephone exchange, and can be cut in half about every 1000 metres). Many customers are well beyond 2000m from their exchange, experiencing real line speeds of 5-10 Mbps.

NBN - $109/month. 500GB (250 peak/250 off peak), free modem, all phone calls, 24 month contract. Speed = 12Mbps. Upgrading by $5 gets you bumped up to a steady 25Mbps speed, and upgrading by $10 brings you up to a healthy 50Mbps. $20 gets you the top speed 100Mbps. These are essentially guaranteed speeds, as fibre-optic connections are capable of maintaining their top speed over several hundred kilometers. Speeds are more likely to be affected by traffic, but not to the same extent as ADSL speeds, which can also be affected by traffic.

Internode

ADSL $99/month, 300GB data (any time), line rental included, calls at standard rates. speed available = 24Mbps. Average speed is probably 12 Mbps. A wide range of modem hardware to choose from. Connection starts from $39 for no contract, free for 24 month contract.

NBN- $115/month, 600GB data (any time), phone service with standard call rates included. Speed = 100Mbps. Blazing! Modem is $50 for a standard Wi-Fi, and $149 for a Fritz Box, a full router with phone built in and lots of other features. Connection is $99 for no contract, free for a 24 month contract.

As we can see, the NBN prices compare very favourably with current ADSL connections- but with up to 8 times the normal speed of an ADSL connection. Prices are presumed to stay more stable than ADSL has in recent years. These two companies account for nearly a third of the current ADSL market, so these are good bellweathers – the big player in the more budget end of the market, TPG, has yet to weigh in with their NBN prices. But if these prices are any indication, the NBN can’t come fast enough for all Australians.

NBN-based connections are not yet widely available. For those who want to take advantage of great value plans with short or no contracts, we recommend;

TPG’s Unlimited $60 ADSL2+ Bundle (6 month contract) – Call 1300 106 571;

Club Telco has an unlimited phone and internet connection for $70/$90 (depending on location) with no contract- Call 1300 138 155;

Internode has a 200GB Easy Bundle for $80 with no contract, call on 1300 106 571.