NBN is Driving Down Internet Costs?

(First published in Western Sydney Business Access in October 2010)

How many businesses are still on an older ADSL2 plan?

We find many companies paying $250 per month for an equivalent service that costs less than $80 elsewhere today. Folks are still on old plans that are very limited and very pricey and paying huge premiums when they exceed their monthly data limit. (Some providers seem to count on you exceeding your data limit each month.) This is one area that Telstra does not provide good value for money and shopping elsewhere is smart on the pocket book.

In 2004, $450/month would buy 80GB data with 6M down/0.6M up. $500/month today gets you 5M down/up and 300 GB data. Even today, you still get quotes for more than $1,000 per month (for 5M/5M service) if you do not know how to shop around.

How does all this tie into the $40Billion NBN (National Broadband Network) that the Aussie government is planning?

This article discusses internet prices and encourages you to relook at your IT costs in this area.

How Australia ranks

First, let’s put Australia in context globally when it comes to internet.

According to Speed Test, Australia ranks 59 in the world in terms of average upload speeds and 40 in average download speeds. (We typically have 1.29 Mbps in upload speed and it is really sad to see us behind places like Ghana, Ukraine and Mongolia! As a comparison, Korea has approximately 20 Mbps upload which is a more than 10 times greater.)

We seem to be falling behind even our largest third world trading partner.   China is often mentioned in some on-line ISP forums (see Whirlpool) as having superior value for money in terms of broadband speeds. These sentiments (and a fear of falling behind as the “clever country”) is driving us to push for a national fiber network (called NBN) with our without the monopoly of Telstra on-board.

Some of the major ISP players other than Telstra and Optus include iiNET, Internode, TPG and Exetel. Some of the folks in Tassie are now paying only $70/month for 25M down/2M up with 200 GB of data under the “NBN trial”.

There is a heap of unused fibre (called “dark fibre”) already throughout Australia. There is also already a large copper network that reaches most of Australia. Other than leasing/buying this off Telstra, the expensive bit is to deliver the “last mile” to the office/home. Most major CBD’s in Australia have options for fibre, but regional area and homes have only copper, satellite or (sometimes) wireless/cable.

Some Types of business grade offerings

  • Business Grade ADSL
  • Ethernet over Copper
  • Bonded DSL
  • Extreme SHDSL
  • Fibre/NBN

Key things to look at that impact time or costs

  • Upload
  • Contention Ratio
  • Data allowance – and fee for exceeding

Upload speed is usually much lower than download, but it causes the most grief when you have more than one office. The contention ratio is how many other businesses/homes are sharing the same connection. Think of it as multiple cars sharing the road. The more cars you have, the more congestion occurs. The best contention ratio for business is 1:1 which means 100% of the speed is dedicated to you – kinda like owning your own motorway.

Despite prices falling over the last few months, they are still more than triple what the NBN folks are paying for equivalent services in Tassie. This is one of the reasons folks are so excited about NBN. If you focus your decision criteria on above, you’ll find that Ethernet over copper (where available) is a bargain when compared to other services.

Sample Prices

Some sample prices, with availability often dependent on distance to exchange:

DownSpeed UpSpeed

 

Data Allowance

 

Price

Business Grade SHDSL(Exetel)

4M

4M

200 GB

$750

Extreme SHDL(Internode)

5M

5M

25 GB

$700

Ethernet over Copper(Exetel)

10M

8M

4M

10M

8M

4M

500 GB

400 GB

300 GB

$600

$550

$450

Business Grade ADSL (Exetel)

4M

0.5M

40 GB

$300

Bonded DSL(iiNet)

10M

2M

100 GB

$280

NBN – Fibre(Internode)

50M

4M

200 GB

$120

NBN – Fibre(iiNet)

25M

2M

200 GB

$70

Exetel is often less expensive for similar or better technology to others, so they are a good reference point. There are some consumer grade options available; however, you are usually sharing the highway with 16 or more other places (called contention ratio) which limits your actual speeds somewhat.

What to do…

  • Check your Plan – is it value for money when compared to above
  • Check your actual costs – what are fees for exceeding data allowance
  • Ask your users – is the internet slow?
  • Do a check with iinet on if you are in a serviceable area.
  • Shop around:  Go to Whirpool for a good listing of all ISPs available in Australia.

Once you get answers to above questions, compare to the pricing available.   Be sure to check the contention ratio offered on the plan, otherwise you could end up with an internet connection similar to peak hour traffic.

To find out more about Internet solutions, contact Empower IT Solutions.

Reference:

1)    NBN 101: Is Australia’s NBN world class?

A look at how the NBN compares to the rest of the world

James Hutchinson (Computerworld) 17 May, 2010