NBN kills 4G on cost for the data-hungry

Many people have taken Tuesday morning's announcement from Telstra to downplay the need for the National Broadband Network, but they're ignoring Australia's growing hunger for data.
Written by Josh Taylor, Contributor

Many people have taken Tuesday morning's announcement from Telstra to downplay the need for the National Broadband Network, but they're ignoring Australia's growing hunger for data.

There's no doubt that Australians do love their mobile broadband. According to information released by the Australian Bureau of Statistics (ABS) in September last year, Australians are flocking to mobile broadband in droves, with mobile broadband accounting for approximately 36 per cent of all internet connections in Australia.

Even the government-commissioned report on the NBN Co corporate plan said the government needed to pay attention to the rise of mobile broadband and the possible effect this might have on NBN Co's bottom line.

The timing of Telstra's announcement of its 4G network upgrade only fuelled the ongoing fixed versus wireless debate, with Shadow Communications Minister Malcolm Turnbull pouncing on the announcement, saying it decreased the viability of the whole NBN project.

Mobile broadband is certainly rising. But you can't just measure how we connect to the internet — but also what we do once we're connected.

The ABS statistics also revealed that in the period between April and June 2010, Australians downloaded a whopping 151.8 petabytes (PB) of data, an increase of 21.5 per cent on the previous six months. Conversely, mobile broadband downloads suffered a decline, dropping 6 per cent from 13.9PB to 13PB.

So why the decline, if mobile broadband is all the rage?

My guess would be the price.

For example, a person using Telstra wireless broadband today can expect to pay $69.95 for 12GB per month of downloads. This might have been acceptable in the late '90s but it's 2011. For an extra $30, that person could get 1 terabyte of downloads per month with a fixed-line plan from iiNet.

Why would mobility matter if, in addition to paying for content you want to download in iTunes, a user also has to suffer paying outrageous prices for a small amount of download quota?

Telstra isn't claiming that its new 4G network will be an alternative to the NBN; however, if that's what people want it to be, mobile broadband prices are going to have to drop significantly before the end of this year.

Interestingly, the ABS excluded smartphones in its account of mobile broadband connections, but we know that's already a huge market for mobile internet. We Gen Y love our smartphones. Telstra added nearly 700,000 smartphone users to its network in the last six months alone. I've certainly written enough on here about how attached I am to my iPhone. But are we downloading anything more that way? I can't speak for everyone but all I'm really doing is checking email, news sites and the usual Facebook, or Twitter. I personally rarely use my iPhone to download anything other than a few megabytes.

And why is that? I get 700MB per month of downloads on my iPhone plan. A paltry offering compared to the hundreds of gigabytes at my fingertips on my fixed-line connection at home. Given the exorbitant prices telecommunications companies charge if you exceed this cap, I'm constantly concerned about exceeding it and paying the price.

To me, NBN and wireless are not an either-or situation. Sure, a select minority of people may choose to just get by relying on mobile broadband as their only means of being connected, but while I do love having internet available to me wherever I may go, with terrible download quotas for mobile broadband plans, I still call my fixed-line connection home.

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