I'm sick of Telstra - any Naked broadband plans available?

Hi Dave,

I understand where you're coming from. It can be frustrating to search for a product and keep coming back to the same company over and over, with seemingly no choice! That said, you're not alone, and it's not just Telstra - individual customers can have one bad experience with any provider, and find themselves looking elsewhere.

I have some good news for you - you might have some options, depending on how far away you are from central Kalgoorlie.

Problem #1 - Naked Broadband is not what you think it is

Click here for our recommended Naked Broadband plans, or call us for info on Internode Easy Naked plans on 1300 106 571!

Naked Broadband, or Naked DSL, is a connection to the internet made over a typical copper telephone line, using copper that has been effectively 'purchased' from Telstra and is now owned by the Internet Service Provider (ISP) of your choice. These ISP will then make the line 'Naked' by providing only a broadband link, and not a telephone voice service, over that copper line.

So in other words - it's not Broadband without a phone line. It's Broadband without a phone service. And despite advertising that suggests that Naked Broadband will eliminate line rental charges, what they fail to mention is that this won't make it any cheaper. It's very, very complex.

Let's break it down with Internode, which my records indicate is an ISP that operates at the Kalgoorlie exchange and who do Naked DSL:

Internode Easy Broadband 30GB Plan - $50/month

Telstra line rental (paid through Internode in a 'bundle') - $30/month

Internode Bundling Discount - -$20

Total price - $60/month

Complicated, yeah? Ok, let's see what the same plan costs as a 'Naked' plan:

Internode Naked DSL 30GB - $60/month.

So in the end, it IS easier in some cases to get Naked DSL (if it's available, which is another big issue), but it's not necessarily cheaper. Still, it's cheaper than the $88 per month you've given me!

Regional Areas

Kalgoorlie customers are lucky, because both Internode and iiNet (who are now actually merged as one company) both saw fit to drag their network lines to the area and set up a connection point at the Kalgoorlie Exchange. That's not surprising - iiNet started as a WA champion and challenger to Telstra; Internode had the same profile but for South Australia. Between the two of them (and smaller companies like Westnet and Adam Internet), customers outside of the Brisbane-Melbourne-Sydney metro areas can get decent connections. TPG also has a large network extending to bustling regional exchanges, to offer competition to Telstra.

But many areas are just far too remote for private companies, like the ones listed above, to afford to service. The issue here is that each telephone exchange was built to service about 30-40,000 homes each, with a low-frequency telephone signal.

A telephone voice signal can propogate over several hundred kilometres of copper, so we can start to do some math. In remote areas of Australia, you can plant a telephone exchange and loop a copper line in a radius of 200km, before you pass by 30,000 homes. Some exchanges in central Australia would have to cover 1000km to cover that many homes!

But ADSL, the technology that allows those same copper lines to be used for connections to the internet, operates on a much higher frequency electrical signal. This signal will only propogate over a maximum of 4.5km before the signal gets lost.

For an exchange in metro Melbourne or Sydney, there may be 40,000 premises(including units, flats, offices, shops) in a 2km radius. So there's no problem with providing ADSL to each and every customer - meaning it's cheaper for competitors like TPG and Internode to set up shop, because they can count on so much business to fight over.

But for one of those remote regional exchanges, there may only be 200 homes within 4.5km of the exchange building. It costs too much money to connect to a remote area for these competitors, especially with so small a customer base to fight over.

Telstra

Which is where Telstra comes in. Telstra worked out a deal with the Howard Government to wire up a network connection point to every exchange, regardless of how unprofitable it was to do so. Of course, this meant the government paid for costs involved. It made sense to go with Telstra, because they owned the conduits and tunnels underground, the exchange buildings, and even most of the interstate transit networks. Part of the deal was that Telstra also had to provide wholesale access to their competitors at these exchanges.

Which is why many regional customers feel locked into a Telstra 'monopoly'. That's not strictly speaking an incorrect conclusion. You're not locked into a BigPond monopoly, which is what people confuse it for. You're locked into a Telstra Wholesale monopoly. The two companies are both obviously part of Telstra, which gives an advantage to the technologically confused - if Telstra's the only provider, why not go with BigPond? Don't I have to go with BigPond?

No, you don't. Other providers will gladly sell you a plan on Telstra's Wholesale network, even if they're big Telstra rivals. TPG, iiNet and Internode all sell Off-Net' or 'Reach' plans.

What customers quickly discover is that these plans are the same price as BigPond plans. That's because Telstra Wholesale's pricing sheet looks a lot like BigPond's.

Telstra Wholesale will sell a full connection to the internet at two price points - $50 for about 10 GB (incl. line rental), and $90 for 200GB.

BigPond will sell retail customers plans at about the same price (actually, their latest bundles are even more expensive than this).

BigPond has to do that because as a Vertically Integrated company (ie. both a wholesaler and a retailer), their retail price can't exceed their wholesale price. But it also means they have an incentive to keep their wholesale price high. It forces their competitors to be expensive as well.

But there are some competitors who use a variety of tricks and configurations to squeeze more value out of that Telstra Wholesale price.

Dodo (1300 136 793) will offer Unlimited Data for $70 a month in a Telstra Wholesale only area, and then $30 for line rental. So you get an Unlimited plan for about $100.

Club Telco (1300 106 571) do the same, but at $60 for the internet plan. With $30 line rental, the total is about $90 a month. 

As you can see, these prices come out to about the same as Dave's $88 figure. Which means he's probably been calling competitors, and getting that same figure over and over. He might not have tried Internode or iiNet yet, who are the only low-cost competitors in Kalgoorlie - or he might be too far away to be connected to the central Kalgoorlie exchange, and is in fact connected to an exchange in the area where Telstra is the only wholesaler.

Which is why it's good to call Compare Broadband first - we'll focus on just what's best for your address and needs!

Thanks,

Adam at CompareBroadband

1300 106 571