[LINK] Fwd: How expensive are Australian NBN services?

stephen at melbpc.org.au stephen at melbpc.org.au
Tue Aug 16 01:48:48 AEST 2011


How expensive are Australian NBN services?
(Depends on how you measure it)

By Richard Chirgwin.  (Article found via main page, Google News)

<http://www.theregister.co.uk/2011/08/15/nbn_service_prices>
Posted in Telecoms, 15th August 2011 01:00 GMT

Get more from this author:
<http://search.theregister.co.uk/?author=Richard%20Chirgwin>


One of the things people like to toss into the broadband debate is to 
grab a price that’s cheaper than what Australia’s National Broadband 
Network seems to offer, and complain about it.

Usually, that involves grabbing a price in a currency other than our own, 
grabbing today’s exchange rate, and converting the foreign price. And 
there’s always something wrong with this: it ignores factors external to 
the exchange rate.

To pick a nearby example: while we can easily convert Australian dollars 
to American – so long as our calculator runs faster than current 
fluctuations in the exchange rate! – that conversion ignores the 
different average wage (about $AU1,300 here, $US800 there). Twenty 
dollars makes a bigger hole in the American than the Australian pocket, 
right now.

So I’m going to compare a few fibre broadband offerings in different 
countries based on a more complex measure, that of “purchasing power 
parity” (PPP). A table of broadband prices adjudged this way is below...

(SNIP)

Australia is paying over the median price for a 100 Mbps broadband 
service (recalling that to put us at the greatest possible disadvantage, 
I have picked a premium service provider). There are seven services 
offered cheaper than Internode; only three are more expensive.

But is it really so bad? Here are a few points.

1. All of the countries offering lower prices than Australia for a 100 
Mbps service are much smaller than Australia, with consequent geographic 
advantages.

2. Two services more expensive than Internode’s are not 100 Mbps, but 50 
Mbps, because that’s what the carriers offer.

3. The Slovak Republic gets 100 Mbps services (upload speeds not 
mentioned), but for more than double the Australian price.

4. Internode is explicitly a premium provider. I selected its price 
because I don’t know who rates as premium providers in other countries – 
I didn’t want to compare the cheapest price from Australia with the most 
expensive overseas. The cheapest NBN-delivered offering today is from 
Exetel which, at $AU49.50, is below the international median by any 
measure.

And finally, I don’t remember anybody ever promising that Australia would 
get the cheapest broadband in the world. Such a promise would be 
completely incompatible with at least three characteristics that are 
specific to Australia:

1. Our size and population density. If we want to get even close to 
equitable access to broadband, a city-country subsidy is inevitable.

2. Unlike non-English-speaking countries, most of the content we consume 
comes from overseas, so our network builds in a premium for international 
links.

3. We’re charged heavily for US Internet transit.

All things considered, the prices don’t compare too badly on an 
international basis.

Methodological notes (SNIP)

So yes: our fibre broadband (at the top of the market) is “more than 
triple the cost” of South Korea’s. Our wages are also higher, our country 
bigger, our houses bigger, and we don’t have a nervous, paranoid, 
starving, unstable, dangerous neighbour within artillery distance of our 
border.
--

Cheers Richard
Stephen Loosley



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