It's data, not speed that carries the NBN

It's data, not speed that carries the NBN

Summary: The key to the National Broadband Network (NBN) having an edge over wireless technologies is data quotas, not speeds.

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The key to the National Broadband Network (NBN) having an edge over wireless technologies is data quotas, not speeds.

There's no doubt that prices and speeds for mobile broadband are getting better. A report from the Australian Competition and Consumer Commission (ACCC) released on Friday found that overall 3G mobile users were paying less now for their plans, and the data on those plans. You only have to look at the announcement of new prices from Telstra this week to know that Australians are, overall, paying a lot less for mobile data than they used to.

Yet, Australians are still sticking to fixed lines for the majority of their downloads. According to the ACCC figures, between December 2008 and December 2010, 91 per cent of the total 155,503 terabytes downloaded were through fixed-line services.

While one could arrive at the conclusion that much of this is due to the lower speeds available on wireless, with most broadband customers on connections with download speeds between 1 megabits per second (Mbps) and 24Mbps, I wager a good portion of these figures has to do with the still relatively high prices associated with mobile data quotas compared to fixed line.

At Optus' recent announcement of its long-term evolution (LTE) network, a question was put to Optus executives on when they thought mobile data plans would be in line with that offered on fixed-line networks today. The answer was: it will get better soon, but there won't be parity for quite a while.

No doubt LTE pricing will be the one to watch, with leaked pricing from Telstra suggesting that its "4G" will be priced on similar levels to its current Next G mobile broadband pricing. In other words: you'll get much better speeds at the same price, which is higher than fixed line.

Optus, on the other hand, has indicated that it may look to charge a premium for its LTE product. Huawei last week demonstrated that it can now enable telcos to offer tiered speeds and services to customers over LTE. This would allow an operator to push a premium on higher speed LTE services, if it so desires.

Meanwhile, the three biggest mobile operators — Telstra, Optus and Vodafone — seem very committed to getting customers onto the NBN, and both Optus and Telstra have financial incentives to do so. I can't see a situation where their mobile offerings would undercut the cost of services on the NBN. Even if they considered going down this path, there are questions about whether their networks would be able to cope with the volume of downloads on fixed-line services.

One interesting fact out of last week's NBN pricing announcement by iiNet was that essentially the company was going to end up charging customers the same amount for 100Mbps connections that it currently charges for bundled ADSL2+ services today. While this was criticised by coalition MP Paul Fletcher as proof that no one would be willing to pay more money for higher speeds, maybe offering more downloads for less money at higher speeds is the differential that NBN needs to prove it has a big advantage over wireless technologies.

Topics: NBN, Broadband, Networking, Telcos, Optus, Telstra

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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15 comments
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  • No it won't. Wireless can't hope to get those speeds in the real world due to contention rates, attenuation and a lack of available spectrum to cope with the bandwidth!
    Jimmy-c92c8
  • Everyone keeps talking about “more money for higher speed” but I think that's totally missing the point. I think the focus should be more about consistent speeds not faster speeds.

    But then some people are just terry tight arse idiots and aren't willing to pay what something is worth, and don't realise that while they MIGHT pay more they will be getting more, i.e. they will get a guaranteed speed not speeds “up to”.

    Right now we pay $X for speeds “up to” either 8Mbps for ADSL or 24Mbps for ADSL 2+ but the actual speed you get will vary. So for example 2 people pay the same amount for the same plan but they most likely get different speeds. With the NBN the same two people can pay for the same plan and get the same speed.

    I'd be willing to pay extra for more consistent and faster speeds, because I realise that you get what you pay for. If you pay peanuts you get peanuts or something that resembles peanuts.
    Jingles-8366c
    • Excellent point. Imagine if you had a business selling apples by the box - and each box, when delivered, could contain "up to" 24 apples.

      The problem is that the boxes keep spilling their apples - the further they have to go, the more apples roll out and are spoiled.

      So some people get 22, because they live near the fruit market, and not too many have fallen out; those further away get 12-14, and some who live down especially windy, bumpy roads have barely 2 or 3 left in the box.

      But the company you buy them from can't control any of this. They are locked in to a single company that transports the goods, and there is no feasible alternative.

      How would YOU feel operating according to this business model? Locked in to providing lousy service, and no control of the end level of provision that the customer receives? Your customers ring up and complain, but what can you do? Nothing. It's all the luck of the draw.
      Gwyntaglaw
      • This analogy is flawed. In the Australian ISP market plans are sold based on data allowance, not speed - your apples equate to GB, not Mbps. All residential services are provided on best efforts regarding speed and uptime (check your contract). Speeds are provided as a guide only and you will find most terms of service specify best efforts. So you buy a data allowance (box of apples) and can consume them over a month - after which time they spoil.

        If you really want to take it further, speed could equate to the delivery service, which delivers apples on demand. You start your computer and decide you want an apple - so the delivery truck packs the apple and leaves the depot. Depending on traffic, route, distance from depot etc, the truck could arrive as quickly as 24mins, or it could take 3 hours (eg if there is an accident on the motorway or lots of people decide they want their apples at the same time).

        If immediate delivery is that important to you - pay the extra for airfreight or a helicopter charter with an SLA.
        orangeaid
        • The reason it's flawed as an analogy, is that it is not intended to be a complete analogy. I never called it such. If it were supposed to be a working analogy, then yes, you could think of ways to circumvent the delivery regime.

          The point I was trying to make is to compare this to the business model ISPs are trapped in - in effect, not in cause. Where all customers might pay the same, but some will get 20+ apples and some will only get 2, and there isn't anything you can do about it.
          Gwyntaglaw
          • Not only was the working analogy flawed but it was self suited and long winded. With no disrespect to Orangeaid, your solution Gwyn. is to plant your own orchard at a nasty little cost of $27.5 billion + $11 billion, only to find that when you've finished spending all that, people don't eat your apples at all. That's really good.
            sachmodog
          • Accept that the "at all" ending was a just a tiny tad over brewed
            sachmodog
        • Actually, they are sold on both, which is why (for example) Bigpond includes the line "ADSL / Cable Eliteup to: 20/1Mbps3 ADSL, 30Mbps/1Mbps3 Cable" and then lists how much per Gb a plan will cost you.

          This is also why the ACCC can nab ISP's that claim a plan is "broadband" if it doesn't actually achieve a certain minimum speed ( http://www.accc.gov.au/content/index.phtml/itemId/779405 )
          Tinman_au
  • Given that the trend in the NBN world will be towards bundling, I would really like to see a bundle with one quota, and it doesnt matter if it is used over fixed or wireless. Its annoying to have separate broadband plans and to track usage of 2 different plans when they essentially server the same purpose. Its time for RSPs on the NBN to think outside the box and start offering this type of service.
    The other thing that I see constraining downloads on mobile devices is storage. The memory on many of these devices, like phones, arent big, and so limits the potential. Wireless connections are too patchy to stream movies and the storage on the device is often too small to store many movies - not to mention it could take a very long time to download one to a mobile device.
    CommonSense-e9dea
  • (Fixed) wireless connections can be too patchy to support VOIP too.
    Listohan
    • That's a possibility - but it remains to be seen. It won't be too long (next year?) when the first fixed wireless site is switched on, and I will be very interested to see what results can be achieved when the connection gets a real workout.

      Since the technology is essentially the same as today's much-vaunted Telstra 4G service, except optimised for fixed users, there may be some pleasant surprises about what it will be able to accomplish. Some of the NBN Co engineers have hinted that the overall service will better than many people have guessed (or feared).
      Gwyntaglaw
  • Right now - download quota is important. Soon, it won't be.

    The key difference for the NBN is that it's fibre - effectively unlimited bandwidth. That's going to become more important when you start streaming a HDTV channel to 1 room, some of the kids are watching another HDTV channel in another room, someone else is browsing the web or streaming YouTube, while your grandmother is on a VoIP call, and one of the kids is playing an FPS game which requires low latency and plenty of leftover bandwidth.

    All the download quota in the world won't help you in this scenario, which will become the norm within the next decade. Only "speed" i.e. capacity matters - and only fibre delivers.
    niallyoung
  • Just waiting for the NBN wireless data stats to arrive. Keen to see how their wireless plans compare to cabled options when they are released. Given that I will never be offered a cabled solution, I am keen to get away from the retarded 6Gb/month allowance I currently have. No HDTV options me me.
    Uncle_Fester
    • Just goes to show how selfish people are - $27.5 billion+$11 Billion expenditure so some can have FTTP 100+mbps - HDTV channel to 1 room, kids watching another HDTV channel in another room, someone else browsing the web/streaming YouTube, grandma on a VoIP call, + kid playing an FPS game, when others will get so little by comparison.
      sachmodog
  • *G is RF technology whilst more spectrum is currently being expanded by many networks once again the real speeds seen by those connected would be closer to wimax but no way known fibre speeds.

    The one thing people forget with GSM/UMTS ect is IT'S BURST TRAFFIC.

    Will this change ? No to my understanding whatever G we talk about.

    Why? because people want better battery life and countless other things and the cell sites are slaves to all these demands.

    Hence due to the technologies involved there can be no comparison at least not a proper one.

    Example goto your favourite website with say a chat window or something that updates regularly.

    Even with auto refresh on it is normal for your connection to just idle out and drop the connection.
    Well phones do dongles might be different but i doubt it.

    Consequently unless *G becomes an always on connection your comparing apples with bananas.
    337