- Available options in the market when looking for a broadband connection.
- Dodo offers the same Unlimited Data with their standard speed for the same price
- Each ISP, though, may have their own way of limiting their cost exposure.
There are so many available options in the market when looking for a broadband connection. And always, you can find a good bundle or deal that suits your needs, from affordable plans that offer huge data allocation, to the pricier ones which throw in a bundle of extra services. The huge price gap between the high and low-end market seems to come as a surprise to many, and quite puzzling because the product being offered is the same - internet connection.
People love great deals and we are often drawn to products or services that offer great packages at the cheapest possible cost. Because of this, some companies offer “too good to be true” deals just so they can lure more customers into buying or subscribing to them. And so, we often wonder why some companies can dive their prices and still offer great deals while some are still priced extravagantly.
To understand this, let us compare the 3 popular plans we have in the market today: TPG, Dodo and Telstra. At $59.99 per month, TPG offers their Standard Plan with Unlimited Data and no lock-in contract.
Dodo offers the same Unlimited Data with their standard speed for the same price of $59.99 per month. Telstra, on the other hand, starts off their bundles at $90 per month for just 500GB of data and as much as $140 per month for Unlimited Data. Interestingly, Telstra offers the same amount of data allocation at a price that actually doubles to what TPG and Dodo has been offering.
The reason is this – every telecommunications company has their own checklist of expenses that they spend for. These can simply be broken down into different sectors: Wholesale Access Price to Infrastructure, Customer Service Payroll, Technical Support, Credit Management, Engineering Staff and Back Office Support Team. Plus, these companies also allocate a huge amount of money for costs on Advertising and Marketing.
Each ISP, though, may have their own way of limiting their cost exposure. They can have their own infrastructure instead of leasing from another firm. They can also outsource their customer service and technical support offshore to middle-income companies such as the Philippines and India, as they are charged cheaper compared to maintaining their own office and hiring their own employees to do the job. They can also offer automated Direct Debit only, and also to bill in advance instead of in arrears, hence, eliminating the need to go after customers for unpaid bills and fees.
Outsourcing engineering and contractors instead of keeping them in-house is a great way to cut down on costs. Some ISP companies also minimise spending on advertising and marketing, and instead use these savings to offer cheaper deals to their customers.
Now, taking all these costs into consideration, you will realise why there are huge price gaps offered by different companies. Telstra is a huge company who spends a lot of funds into advertising, technical support, credit management and marketing, so you can see why they charge higher prices on their NBN connections compared to TPG and Dodo.
But then again, at the end of the day, it’s up to you to decide, which deal suits you and your budget best, which company you think can rely on and provide you with the services that you are looking for, and so on. If you are the practical type who can forgo extra perks and privileges and would rather go for simple and basic NBN connections, then you may opt to go for an ISP service that can give you ample services at a lower cost.
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