NBN Prices: Why Is Everyone Already Freaking Out?

So Internode previewed its proposed NBN prices yesterday, and as I said then, it's a possible view at how the competitive landscape may unfold. But Internode is just one medium ISP — and a premium priced one at that. So the ensuing cries of "NBN fail!" from Malcolm Turnbull and some quarters of the media are entirely way too premature.

UPDATE: Exetel’s 100Mbps NBN Starts At $50: Enter The Budget ISPs

I'm not naively looking at the situation with twinkling optic fibre stars in my eyes. I'll be the first to cover it if NBN pricing proves to be pear-shaped. I'm simply saying let's wait for all the information shall we? We haven't heard from all the ISPs, so let's take politics out of the equation and focus on the task at hand.

Here's what we know. Internode recently adjusted its current ADSL2+ pricing plans. This included downgrading the $60 per month Easy Naked S plan from 150GB to 30GB for new customers. ADSL2+ has a theoretical maximum of 20-24Mbps a second, and depending on all sorts of variables, the actual line speed you receive is usually around 8-15Mbps.

A few days later, Internode unveiled those possible NBN prices. Its 12Mbps NBN plan with a 30GB limit costs $60 per month. That's pretty much the same value as its ADSL2+ plan. Internode also said its 12Mbps/1TB data plan will cost $150 — the same as its current Easy Naked 1000 plan. All of Internode's NBN plans also include a phone line and $10 of calls.

But what if you're lucky enough to have a current ADSL2+ line speed of, say, 15Mbps — you'd potentially be losing speed with these plans, right? Internode's 25Mbps/30GB NBN plan is $70. And unlike ADSL, the ACCC has come out and said that claimed NBN speeds have to be what the customer actually gets (despite the fact that Internode's pricing table says that speeds are not necessarily indicative). So 25Mbps would be double the speed of most current ADSL2+ connections.

Internode's 100Mbps NBN plans start at $100 per month for 30GB. At those speeds, it won't take long for some users to go over quota, so there are high quota plans, too: the 100Mbps/300GB and 1TB plans will cost $140 and $190 a month, respectively. And as The Australian points out, Telstra's current premium 100Mbps/500MB cable broadband costs $148 per month.

But before we all freak out, let's step back and take a look. As it has done with currently ADSL2+ plans, Internode has basically taken out the mid-range option. There's no huge surprise here. Nor am I surprised that Internode MD Simon Hackett is suggesting his planned prices could increase.

On his website, Malcolm Turnbull has responded to Internode's pricing by writing that:

a) The NBN estimated a 12 mb/s plan would cost between $53-$58 a month with a 50GB bitcap. Internode has said their 12 mb/s plan will cost $59.95 with a 30GB bitcap.

b) The NBN estimated a 25 mb/s plan would cost between $62 and $68 with a 200 GB bitcap. Internode has said their 25 mb/s plan will cost $89.95 with a 200 GB bitcap – so 32 per cent higher than the high end of the NBN’s scale.

The maths are correct, but the spin isn't. Internode's pricing — one ISP — does not equal the entire competitive landscape of eventual NBN costs.

ITWire's Alex Zaharov-Reutt also forgets this point. He argues that "The latest pricing coming out showing the NBN will have a “starting” price of $60 is a joke, an absolute disgrace and a monumental rip-off. Why? Well, we only need to look at TPG’s unlimited plan, offering unlimited data for $59.95 per month, as fast as your ADSL2+ line can go, inclusive of $30 of line rental. "

Dear Alex: Internode ≠ NBN. But your comparison of TPG is a good one. Let's wait for it to announce pricing! TPG's $60/Unlimited ADSL2+ plan already bests Internode's current offerings. It's entirely possible that its NBN plans will, too! TPG has more subscribers than Internode, and TPG has a penchant for Filipino tech support. That's why TPG got 80% in a recent consumer satisfaction survey, compared to Internode's industry leading 92%. Internode is a premium service ISP.

As I've said before, the NBN will be home to cheap ISPs favouring low-monthly fees over Australian-based customer service; it’ll cater to premium providers guaranteeing bandwidth and local support; and big-name telcos will compete by bundling several services (like VoIP or pay TV) over the NBN.

Let's keep that in mind. And let's have all the pricing on the table before we freak out.


Comments

    ...$100 per month for 30GB. At those speeds, it won’t take long for some users to go over quota

    About 40 minutes.

      You do understand that you only use data when using the connection.

      Then you only use the amount of data that the connections needs, so downloading a 10meg file is only 10 meg the speed of doesn't mean you suddenly use up way more data.

        You do understand how jokes work, right?

          You know some people, like the propaganda artists that get paid by Daddykins, are serious!!!

    I am staying with TPG unlimited... Thank you Labor Party, for wasting my money.

      Thanks @Jetty - I had no idea you were paying the entire NBN deal! ;) But in all seriousness, poppycock! The NBN is an investment in the future, and it is one that paid a large part in keeping us out of the GFC. The reality is we will have to wait and see what the eventual result is, as far as what it will cost but I agree with Danny Allen completely - it is far too early to tell and Internode is a top tier provider. They are a superb ISP but have never been cheap!

        The NBN may be good and deliver long term economic benefits, but keeping us out of the GFC? Seriously, it will deliver a lot of things, but claims like that can't be substantiated in any way shape or form.

        1. Timeline doesn't fit.
        2. Not a 'proper' stimulus as a lot of the money spent on overseas equipment etc.
        3. BHP/Rio Tinto/Xstrata/Fortescue/miners generally.

          @Luke
          I agree, we will see. It is hard to see new prices after D/L of ~2TB a month and paying ~60AUD.
          And my D/L's are iso distros, naturally...

            @Jetty
            You could get (most) the distro's quota-free from http://mirror.internode.on.net/pub/ if you had to go one of those node plans

            @ the plan pricing
            Nodes usenet service running at NBN speeds is going to be so worth the price premium (assuming its still included)

        You think the NBN kept us out of the GFC? For a start, we were affected by the GFC aswell, just not as bad as the states. Also the amount of money that has actually been spent on the NBN so far is only a fraction of the total cost of the project, which will eventually weigh us down. And the thing that kept us out of the GFC is the resources sector which is continuing to bring billions of dollars into the economy every year.

      Everything Jaxa said + I'm pretty we (urban) end up subsiding internet prices in rural areas, which is i guess an okay thing considering the agricultural sector is a pretty large part of the Australian economy, so don'be be so selfish Jetty. :)

        @Stefan
        Not selfish am I. My first broadband connection was a Telstra Cable trial at 300 AUD a month.
        I am living at place where satellite dish is not working, so have to download Russian TV feeds for my mum, she is 75 and it seems that NBN will hit my pocket hard, for no good reason.
        You see, not all people are downloading large amount of data fo piracy reasons.

      Nice comment Jetty and the whole lot..., NBN price before 30 june is 99$ for 1 TB 100/40 mbs. Sadly now and will say good buy to NBN ("Nation" Broad Network).
      @: 100mbs >= 10mbs, 100 second = 1GB, 3000 second = 30GB. Means less then 1 hour download blah blah blah.

    thank god for that article, exactly what I was thinking. Good to clear the air but unfortunately I would imagine much of the general public's mind has been tainted.

    Also +1 for Internode, never had a single problem with my connection.

      Thanks for stopping by, and yeah, I'm with Internode, too.

    I agree. Lets wait and see. Meanwhile I'm on am Internode FTTH plan and am hanging out for the Platium 1Tb plan. A great deal in my eyes...

    Aren't NBN prices inclusive of land line phone as well?

      Yes, the phone line is included.

    Try the exercise with satelite where prices and speeds have been avaible since 1st July 2011 they are ABSOLUTLY scandelous. BUT we will only represent 7% of Australians at last rekoning 1,400,000.Australians

      Chances are that these NBN prices will be available across the board, including NBN satellite once the interim service is replaced by the proper NBN satellites.

      But, even now, how can you say the NBN interim sat prices are high? They are lower than the old sat service, despite being 6x faster and with more data than they were under the old system.

      Looking at Harborsat for example, they used to charge $140/mon for 10GB at 1Mbps. Under the NBN interim sat system, they charge $100/mon for 20GB at 6Mbps.

      6x speed, 2x data for $40 LESS per month! You think that's scandalous???

    Not to mention that the doomsayers about Internode's indicative pricing say nothing at all about the increase in competition in the overall telecommunications market which will be achieved by the structural separation of Telstra. Nor do they consider the possibility that Internode is engaging in a PR campaign in order to attempt to pressure NBN Co. to charge smaller ISPs on a different basis for access to the network.

      Well, EXACTLY! I mean, I have respect for Simon Hackett and all - but he is clearly using his "first mover" pulpit to lobby for changes that would benefit him (and other smaller ISPs).

      And why shouldn't he? He's perfectly entitled to do so. But his voice shouldn't be heard as the first, last and only one on the subject. I will be interested to hear if he gets support from other ISPs for his views. I mean, it's perfectly feasible for the prices and settings to be tweaked over time, and we can expect to see this happen over the coming years, subject to ACCC input, ISP lobbying, pricing trends, etc.

    I pay $25 a month and will stay that way. You can stick your NBN up yer arse

      And chances are you'll be able to. Again, Internode does not equal every single ISP on the NBN. It's just the first pricing, from a premium provider.

      Hahaha have fun doing that when they rip out your copper cable. There goes your phone and ADSL. I look forward to the NBN and all its glory. You can look forward to being a douche.

    100/40Mbs. 1TB of data. All for under $200 per month. At current prices, a connection such as this would set me back, oh, around $3k per month.

      ?

        I think he means that the costs of arranging a FTTP connection now, through Telstra or another big provider, would be many times higher than the top Internode product - in the absence of the NBN rollout and economies of scale that will bring.

        But you won't be hearing too much about this, because Telstra has no wish to advertise how much it has been ripping people off until now.

    Why is everyone freaking out? Because of the way it is being spun by the Libs and a significant section of the Australian media who have stopped reporting unbiased news and are pushing a political agenda.

    My max speed is 2Mbps and I live only 20km from the city centre.

    My ADSL2+ plan from IInet in Perth is 1TB peak & 1TB off peak of which I'm using an average 1TB/month total for which I pay $50/month for data and $30/month for the phone line.

    So I MAY have to pay a bit more for an NBN plan but at least I wont have to wait for 24 hours for my Itunes movie purchase to download so I'll end up saving money by jacking in my Foxtel subscription.

    So if a large proportion of Foxtel subscribers follow suit, Foxtel is in trouble. Who owns Foxtel? Telstra and News Limited, who bags out the NBN the most Telstra and News limited... Ahh

    Never had a problem with Internode....Telstra on the other hand.....LOL!!!!

    80% vs 92%, not that much really.

      It would be interesting to include the average sync speed there.

      TPG is fairly horrible from what i've heard from ex-customers

    The fact that this important ISP have released prices shows that they expect them to be competitive. It is naive of the columnist not this. We are going to pay. And pay.

      your comment would be correct except for the fact that Internode do not compete with other ISP's on price. They charge a premium amount for a premium service with industry leading support. Its is like comparing the cost of a Rolex to a Rolex

      The cost accessing the nbn infrastructure is about the same as what telstra charge for the ULL (NBN 12/1Mbps). The cost of basic packages are going to cost the same as what adsl2+ customers are paying for currently with 2 distinct differences.

      1. users will get the speed they pay for. 12Mbps means 12Mbps to the ISP, not up to or average, but exactly.

      2. ISP's will be able to offer better double and triple play services which means that if you want a phone or a subscription tv service the ISP will be able to bundle in this service cheaper because they dont have to pay for a separate pipe for that service. So overall, if you want the net, a phone and movies on demand you will be paying less per month than a phone service, adsl and satellite tv service.

      By the way, the government is only building the network, they are not forcing you to buy the fastest service available. I certainly will (I need the upload speed) but you can buy what you want with who you want, which for many broadband users in Australia is a new and novel idea

    I for one will definitely go for the $189 package. 100Mb speed and 1Tb per month - Can't wait...

    Absolute bargain compared to my current plan of over $100 for 50Gb bandwidth per month at about 4Mb speed on ADSL2+ from Telstra!

      Hey, enrico, I think the silver spooners would love(NOT!) you to share what your upload speed is on that 50 gig download deal too....

    Who would actually get the 100Mb plan of 30GB for $99.95 when you could get 200GB for $20 more. Seems like they haven't thought about it very well and are just after some free publicity.

    I pay $78 per month for 200/120 Gb per month with a consistent d/l speed of 16 MBPS. Mostly I cannot receive data from the other end at anywhere near that speed.I cannot see any thing changing with NBN. Another lie from Ju-Liar

      Well, firstly you mean 16Mbps (or Megabits per second). 16MBPS (Megabytes per second) or 128Mbps (Megabits per second) is a speed only currently available on fibre or dedicated Ethernet Connections. Not even cable broadband offers offers end users 128Mbps in Australia. Not that im trying to be nit picky, its just one of my pet peeves that I have to deal with every day where I work

      But anyway, you are assuming that even the most basic user is only ever downloading one thing at a time from one computer which is simply not the case. Most broadband homes, actually have more than one computer, and even the most humble of facebook users will be downloading data from a multitude of sources all at once.

      That being said, the cost of hosting at a data center has dropped significantly in the last few years (Thank goodness). That and the investment in to greater international links (not to mention the deployment of IPv6 in the coming years) means that these transmission rates will increate, and at a rate that only the NBN will be able to keep up with.

    I am an aged Pensioner and pay $20 per month and will not pay any more.I will be staying where I am as I cannot afford anymore. If the internet costs more , I will have to cancel it completely.

      Janine,

      Thos Internode NBN prices include a phone line and $10 in calls for the $60 price. This means it's probably the same as what you're paying now, give or take. ie you would be paying $30 for a phoneline plus $20 for internet, for a $50 per month total. Assuming you make at least $10 worth of calls each month, the NBN won't cost you any more than you pay now.

      No one is forcing you down this path, and also remember this is once again a premium providers proposed pricing....no need to start making outlandish comments of how you are going to have to cancel your internet because you will be unable to afford it.....I am sure the ISP you are on atm will release pricing similar to what you already have. Also if you are only paying $20 per month I imagine you do not use alot of data.....why have you not moved to a wireless prepaid option......$150 recharge at telstra gets ya 12 gig and lasts you a year.....I imagine that would be far better suited to your needs

    Internode can give you their cheapish prices at the moment because they have been bottom feeding off accc regulated nanny capitalism. NBN levels the playing field and does not force one ISP who actually invests to cross sub everybody elses profit. There is an idea that telstra gouges some how - bullshit, it just prices at sustainable levels and not bullshit rape and pillage pseudo competition levels. Trust me, the accc are nongs far worse than either party, roll on NBN. Happy to discuss over a beer how I know this, I could not talk about it for years but now I am free to say what I like.

      Are you honestly saying that Telstra's current ADSL plans are even remotely 'competitive'?

      Such a laughable idea.

        ISP costing is pretty simple. There are 4 main components : peering cost (access to the USA), Base customer connection cost (either own of Telstra wholesale), backhaul cost for POP and overheads (call center, marketing, fat exec salaries). To that telstra adds "ACCC nonsence cost".
        Most ISP make most of thier money off Telstra connections, which are regulated via arbitrary blackmagic to below long term actual cost by economists who know zip about running a real business. The costing for most ISP is simple compared to Telstra, because it is "easy money" - even a tiny/dodgy company can be this kind of ISP, which tells you something - just shove a margin over the nanny cost. The Bigger ISPs other than Telstra deploy thier own infrastructure when that saves them money - see why telstra will always be more expensive now? Has the penny dropped? Telstra can NEVER be competitive when there is a regulated price that is below its averaged cost base, and I can tell you the regulated access price is well below the cost of a competently run wholesale network that actually is decent to its employees and is not "run down" over time. Oh hang on, hard working telstra techs "deserve to be punished" because they are "poor workers" right? Crap. The ACCC is one of the worst things to ever happen to Australian workers who give a shit, because thier only concern is "cheap = good" not "fair work for fair pay" and "infrastucture build and maintenence".
        The NBN pricing is higher because it is based on a business plan with real long terms costs, not some wonky economist pulling shit out of broken econometric models based on dodgy assumptions and an implicit belief that competition is best served by killing wholesalers.

        Get over it - the golden age of stealing cash from Telstra and forcing it to cut service quality (why did the call centers get sent overseas? have a think about it ...) and forcing it to offer subsidised wholesale is over, and the ACCC can shove its "competition".

      The problem wasn't with Telstra gauging service providers for access to their network. The problem was that Telstra then started to sell services that way undercut the price of their so called best price resale service.

    It is good to note that when comparing Internode to TPG for ADSL2+ they are running from very different cost bases also. Majority of TPG ADSL2+ is connected via LSS infrastructure costing them $1.80/mth where Internode run on ULL now costing $16.21/mth. With NBN both TPG and Internode will buy a 12/1 service for $24/mth. I doubt we will see $60 unlimited from TPG when they have to pay these prices and still try to make money!

    Guys don't forget this is on top of the 40b we have to paid to set this up. 40b of our tax money! Naturally, you can double that when this is finally in because they always do.

      Sean, how much did the silver spooners waste on political advertising? (THANKS FOR COMING BTW!!!)

      So you're saying that the Government should not recoup any of the money that it spends on the NBN? That it should be free forever? Interesting.

      This, of course is beside the fact that it's not being funded by taxation but by the sale of government bonds which need to be repaid and is why the money cannot be diverted to other things (Health reform, Tax cuts, etc) that absolutely will not repay the debt.

      Bottom line is, you are incorrectly informed. This could be one of Australia's most important infrastructure projects of recent years. Please, please, please make an effort to learn about it. Read something other than Murdoch press articles and Liberal party press releases. Learn about who's actually building it (i.e. NOT the government) and where the money is coming from.

    The main reason I wouldn't want to be on an NBN is I don't trust the government to start intercepting my private emails, photos and internet activity. Unfortunately Australian privacy laws do not protect the people like Sweden. While the cables are owned by Telstra I am offered some elementary level of protection.

      This is a bizarre statement. Aside from the fact that the "cables" (wires, whatever) were all owned by the government not too many years ago, the actual ownership is of no relevance whatsoever.

      If law enforcement authorities - or any government agency - want to monitor or intercept any network, private or public, they can do so at will, under existing provisions (or Parliament could pass a bill enabling this, if it so chose). I don't know what "elementary level of protection" you think Telstra affords you by being a private company, but it really isn't much, you know.

    I'm with Internode on a 24 month plan. Do you think the NBN plans will be included in their free upgrade deals?

    it is ridiculous that any sane person is crying about the first price announcement.

    All this announcement represents is a toe in the water. The very idea of the NBN is about creating a level playing field FOR COMPETITION amongst ISPs. One ISP's pricing announcement means nothing. Wait until other ISPs start announcing their prices before you make a judgement on the NBN itself. Only when we have an average price from a handful of ISPs will we be able to judge the value.

    I'm in a building with 500 units in the CBD and if our building wants foxtel iq we have to pay telstra for a new connection (i.e. old foxtel works fine and we also have a fibre backbone). However if I live a few streets away in a house telstra will connect or upgrade for free. (Worse, the foxtel iq box will technically work in my building until telstra notice and disable it).

    Now this rant is not about internet connections but it is about competition. I just want a level playing field and hope that the NBN delivers on ubiquitous access. For $40B of our money I expect nothing less.

    p.s. co-incidentally a regional business-oriented ISP is renting our building's rooftop for microwave transceivers and provides us with 20gb/month for free. Ironically the NBN may actually stifle competition from smaller, agile ISPs that fill in the niches that the larger players wilfully ignore.

    To all the naysayers, FUD.

    You can't give NBN due to this pricing. What happened when adsl2 just came out while everyone just had the average adsl. The pricing for it was completely different to each other, ADSL 2 was priced at alot higher. What has happened now? Normal ADSL pricing has dropped dramatically along side with ADSL 2 and you used to get less data back then. ISP compitition will for sure drive the prices down.

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