By Professor Thas Nirmalathas, Director – Melbourne Networked Society Institute
Currently there are large number of broadband plans from 69 registered internet service providers (ISPs) along with a number of re-sellers for consideration.
With so many players, and recent additions such as MyRepublic from Singapore, picking the right deal can be exhausting and confusing.
Your choice has to be made based on matching a plan to your needs, desired speed of internet connection, cost of contract, quality of service and customer satisfaction ratings of your short-listed service providers.
Unlike countries such as the UK, where industry regulator Ofcom checks the offerings by ISPs, in Australia we do not have a good mechanism to keep ISPs honest about the data speeds and quality of experience customers can expect.
Your journey into selecting a broadband plan has to start with knowing your internet consumption and associated data requirements.
The demographics of who lives in your household and the differences in their usage patterns will affect the data and bandwidth requirements.
Crunching the latest data from the Australian Bureau of Statistics, Australians aged 45-65+ spend on average about 32 hours per month online, while for 25-44 year olds it is 40 hours and 70 hours for 15-24 year olds.
How does internet usage translate to data requirements? Data requirements can vary hugely depending on the type of internet usage. So let’s look at some categories of internet users based on how they use the internet.
While many classifications categorise users by generation, here we group people based on how they use the internet, as this is more relevant to determining your data needs.
Web Surfer – if you just use the internet to access emails, surf the web and make voice calls, and possibly low levels of social media access or the occasional YouTube video, you will consume about 150-300MB per hour.
Online Gamer – Games typically require around 40MB per hour, but this could increase with the rise of virtual reality games. In fact, most gaming data usage comes from downloading new games or large updates. When you factor this, you will need about 100-200GB per person for a month, but that could vary widely.
Social Networker – in addition to casual use, you might be a heavy user of social networking, both posting and downloading images and videos. Your social network use could consume about 120MB per hour, with video adding another 3.5GB per hour. If you’re in this category, you would consume around 1.8GB per hour.
Video Frenzy – if you stream a lot of video and audio via services like Netflix, Presto, Stan or YouTube, then depending on the quality, you could use around 3.5GB per hour on average.
If you consider a household of one casual Web Surfer (32 hours on internet per month), one Social Networker (40 hours/month) and one Video Frenzy (60 hours/month), the household would need up to 320GB/month data package .
Speed and latency
NBN plans are structured around a five tiers of connectivity offered by nbn co, with a range of download/upload speeds:
As a rough guide, Tier 1 may be sufficient if you’re a Web Surfer, while Tiers 2 and 3 may be well suited for households with multiple Social Networkers.
When using bandwidth-intensive applications, such as video streaming, and interactive applications, such as online gaming, your experience will largely depend on the speed of the connection and how much delay or latency there is in the network.
Tier 4 connectivity would be ideal if you’re a Video Frenzy user and possibly for an Online Gamer, depending on the games you play.
A household with serious Online Gamers and multiple Video Frenzy users might be better off going for a Tier 5 service. Similarly, business users with video conferencing facilities might be better off with a Tier 4 or 5 service.
The speed of access might depend on many other factors: number of users, type and location of services you access and how they are configured and your dominant usage time in the day (peak hours or not for example).
One metric – speed of connection during peak hours – has become an important measure. This has been published by OFCOM, the telecommunications regulator in the United Kingdom to gauge the quality of service offering from ISPs.
Australians can only hope this could be tackled by the Australian Competition and Consumer Commission’s broadband monitoring proposals with data made public for consumers to educate themselves about better ways to differentiate between broadband services.
At this point, broadband speed testing and customer reviews can only provide a rough guide for you in this selection.
Pricing of NBN services
NBN broadband plans on offer have various cost elements such as monthly fee, upfront cost, minimum contract period and associated minimum costs (with contract terms varying from one month to 24 months), and variable cost for the remaining subscription period.
Even for a base level Tier 1 service, the median monthly fee is around A$50, with a range of prices between A$29 and A$60 depending on the data allowance and other factors. The minimum contract period can vary from one month to 24 months and the upfront cost can be anywhere from nothing to A$230.
The best way to compare plans would be to determine the total cost for a 24 month subscription. Total contract price for a Tier 1 service now vary from A$940 to A$2,190 with a median contract price of A$1,355.
Similarly, a comparison of available offerings under various Tier 5 plans can be scanned via Whistleout. Packages can start at a monthly fee of around A$60 and a contract price of A$1,444. The monthly fee can be as high as A$100 and 24 month subscriptions can be as high as A$2,500.
It may be that you start on a lower plan will find yourself needing to upgrade to higher Tier services. The market, is starting to extract more value and getting people onto higher tier services.
You should consider what will be the cost implications and contract condition limitations of upgrading your package. A higher Tier service right from the start might be a better option if you anticipate your usage is likely to be different within the contract period.
Customer satisfaction of ISPs
ISP performance is the biggest factor to consider when selecting a broadband plan, yet in Australia there is not enough transparency or reporting requirements on ISPs to publish their performance data.
While you may subscribe to a particular speed of connection, ISP performance might vary, and at peak times connection speeds could plummet affecting your experience.
Australia is seriously lacking a systematic reporting of ISP performance and needs a better performance reporting framework to educate broadband users, to drive effective competition and proper service differentiation.
As the NBN deployment accelerates, there is an urgent need to improve the performance of broadband service and service differentiation as well as delivering a better quality of experience.
The ISP industry, nbn Co as well as competition watchdogs such as the ACCC need to develop a better performance reporting framework if we are to reap the better experience from the public investment in building the national broadband network.
Adam Lodders, executive officer of the Melbourne Networked Society Institute, co-authored this article.