According to this thread on the Whirlpool Forums, you can get 45Mbps down stream and 3Mbps up stream ADSL with no traffic quota and cheap VoIP phone for around ¥4,138 per month, which is just a bit more than AUD$50 today. At the same time, I am paying AUD$55 per month for Swiftel‘s 512kbps/128kbps plan with 4GB download quota. So I am getting one Macca’s small value meal less every month (not that I need it) for 1/90 of download speed and 1/24 of upload speed – with a data cap at 4 gigabyte of quota every month that I need to watch for (that is 4,000 megabytes, according to the conversion rate every ISP has agreed upon). No wonder people are making comments about how behind Australia is in terms of broadband telecommunication.
But Australia is not Japan. There are reasons behind the high price of broadband Internet in Australia. Here are my analysis of this issue.
First of all, there are geographical reasons that makes Australia different from the other countries.
- According to Wikipedia, Australia has land size of 7,686,850 km2. Large land area certainly makes telecommunication infrastructure building expensive. Especially when you started to lay copper/fibre for subscriber lines, every square metre costs. That brings Australians in big disadvantage in comparison with those in Japan, South Korea or Hong Kong.
- It is around 11,935 km (7,416 miles) from Sydney to San Francisco, the data hub for Australia and United States. There’s Pacific Ocean in between, and laying cable in the sea would probably be much more expensive than laying on the dry land. Guess how much money Australian Internet users would have to pay to utilise the Southern Cross Cable (SXC)? In comparison, Canada pays minimal to exchange data with the states.
But why is the United States so important? Because they have the content we want. Here’s some demographical reasons behind it.
- The majority of Australians speak and read English. So whenever an Aussie logged onto the web, he/she will most likely download content from a server that provides English content. That means majority of people will exchange packets with an overseas server (most likely in US) over one of few expensive pipes across the Pacific Ocean. That would again drive up the price when these pipes need to be constantly upgraded to cope with ever-increasing traffic. That is why countries in the Eastern Asia are not that worried about their links with the states, because people’s Internet usage are generally localised, be that Chinese, Japanese or Korean. I have actually used my parents’ ADSL connection to access US contents when I was in Taiwan last year, and the speed was quite disappointing. But not many people over there care.
- Australia also has a relatively small population (just a bit over 20 million) for its land size. At the end, telecommunication companies pay a high premium to set up the infrastructure on this big piece of land, but they cannot reap the same amount of reward due to a small population which produces small demand.
- Some people argued that Australia is relatively urbanised – majority of people are living in the major metro cities – therefore the infrastructural cost might not be that huge due to concentrated population. However, it does not mean that there is no one living in the rural side of the state. What would these people say if Telstra decided not to enable their phone exchange with DSL support? Those regional infrastructural building will continue to cost more than reap, but on the other hand they are still necessary.
Talking about the economical reasons, supply and demand – which one usually comes first? Should there be good supply if there isn’t enough demand?
- Broadband in Australia are still considered as an item of luxury than commodity. Most people I know (which are mostly university students) don’t have broadband Internet at home. They simply find no need for it. A dial up is enough for them to do emailing, Internet banking and weather checking. Most people certainly won’t download more than a gigabyte of data in a month, and there is just no demand for a fatter pipe for them. Price stays high when the demand stays low…
- But is broadband that expensive? Considering AUD$39/month 256kbps/64kbps 1GB plan is not that much more expensive than a $20/month “unlimited” dial up account when you factor in call costs (at 17-25 cents per call), blocking the line while dialling in, better speed, etc. After all, $39 pm is what people paid for those “unlimited” dial ups 4-5 years ago anyway. However, the set up cost is another matter. It is something costs virtually nil on dial up plans that would set you back hundreds of dollars on ADSL. You need to pay at least $150 initial cost to get your line connected + a budget DSL modem. That is just one reason why some people I know get scared off ADSL broadband.
There got to be some other reasons – what about the market monopoly? What about the government?
- Yes. Telstra still owns most of the phone exchanges across Australia, and it is the Telstra Wholesale that sets the pricing for down stream ISPs. They are in the monopoly situation – but funny that the “competition” cannot give us more competitive pricing to break down the monopoly. Optus Cable? DSLAM roll out by Internode and iiNet? Other DSL providers like XYZed? Maybe the infrastructural cost is really that high.
- Wouldn’t government stands up and grants telecommunication companies some “fund” to improve the infrastructure? Would you do it if you are John Howard? Would you vote for the party that slams tax payers’ money to telecoms infrastructure? Who would it benefit, from an average tax payer’s point of view, other than enabling his 13 year old son to download the warez at 10x the speed? There are other areas that need funding – health system and education just to name two. Considering our Johnny boy might attempt to lower the income tax rate for the up-coming election. Spending money on telecoms infrastructure? Maybe not.
But at the end, is broadband in Australia really that expensive? Well, yes it is relatively expensive. Affordable? Affirmative – it is still affordable by the general public I think. We do need the public to be aware of the benefit and actually subscribe to it, so hopefully the price will come down gradually when the demand picks up.
Moreover, many broadband ISP in Australia offers extra features to compensate lack of bandwidth, like virus/spam filtering, static IP address, and users are free to host servers/P2P services on their boxes, which I think might be rare on the other side of Pacific.
At the end of day, I would like my broadband access to be cheaper, faster and more reliable. But I do already enjoy what I have got at the moment, and hopefully the future is going to be better.
Update 11 Jan 2004: Slashdot ran a interesting story on broadband pricing across the world, and people in different countries reported how much they have paid for their DSL/Cable access. I reckoned Australia is okay regarding to the cost of access, but expensive comparatively in traffic cost, as most overseas ISPs provide a flatrate pricing.
DSL Pricing is even worse here in NZ. We pay NZ$30/month on our phone providers bill + another $30 goes to the actual ISP. Thats only for 128kbs both ways (no data cap)
256k 1GB data cap is about the same price.
Things are actually looking up for australia as aarnet has just (with government funding) a purchased dual 10gbs links to the US.
PRESS RELEASE : http://www.aarnet.edu.au/news/sxtransport.html
This is a great move by the Ausie Government. If they start giving this kind of money to support regular internet users net experience it would be even better!
hello
adsl is a rip off
Be thankful you’re not after ADSL over here. Two years ago, we were supposed to have a SECOND national phone company, nevermind a third or fourth. We’re still stuck with one!
ADSL is controlled by the monopoly, and it costs about A$200, with a 3 gig limit. I’d love to pay $A55, and so would most South Africans. Very few have dial up internet access (nevermind broadband), 3 million out of a population of over 45m. By the way, in case you were wondering, 10,000 people have ADSL here. 10,000 out of a population of 45 million!
Count yourselves lucky, Aussies! $55 is a bargain.
I couldn’t agree more with you,I’m currently paying $99.95 a month for 1536/256 adsl with free uploads and a backup dial up account with Netspace and the price is very high and should be cheaper but due to the conditions of australia’s population land size in km2 etc I’ll just have to wait a few hundred years lol.
Holly cow, and I use to complain that Verizon Fios fiber optic to the house w/ 5 Mbps down and 2 Mbps up, and it costs 34.95 USD/mo. No more complaints from this side of the Pacific (Palm Springs, California). Thanks for the info though. I wanted to better understand why prices were higher. Now I know.
I have just arrived from the UK and its expensive here in Oz. I paid 25GBP (around AUD $60) per month for 2GB download/ 256 Up and no limit. This included all local and national landline phone calls and line rental. You’re looking at a lot more here even in well populated areas like Sydney.
Well I’ve spent most of my life in Australia since I was a primary school kid,
and whenever I heard about all this fiber optical cable internet crap across the Pacific, but did not give a sh*t.
However I’ve visited my mother country famous with ultra fast internet, South Korea for about a year and half(2006) and when I came back, I’ve realised that I already have crossed the line… the taste of forbidden optical cable with 100MB per second speed…
damn.. it was good not only I actually witnessed the download window showing 16.7MB per second, but everything related to internet was advanced over there.
Scott, my friend.. you said that there are not much credit for having broadband apart from 13 years old boy downloading stuff from the net superfast right?
Well.. I must say you were wrong… Internet related businesses and services are the future!!! people in Korea do everything with their magnificant network system. They fully utilize their infustructure and everything was ever covenient.
I love Australia its my country therefore I would hate to see Australia to get behind other countries(developed countries i mean) in IT sector, because I believe that future of 21st century truly lies there.
Oops correction..
100mbp per second…not 100MB per second :)
and by the way it is of course unlimited download and it was 33000 won a month which is around AU$ 41.25
wake up australia
AUSTRALIAN MUST PAY MORE becuse this is australia simply no rolls
i was living in canada for 5 years ,
what i use to pay 35$ in canada for adsl 100 kbs unlimited download
now here i pay for extera 25 GB 310$ to optus koz i had 5 GB plan
each phone call from public phone only cost 30 c in canada an is almost unlimited to mobile call
but here each min cost 50c to mobil phone if you use public phone
also mobile plan in north america and europe are 30 percent cheaper than here
i think goverment had deal with company like telestra and make advantaje of us
why they dont let north american or europian company take part in out
internet and mobile phone services
I lived in Australia for over 12 years and I understand you pain in terms of the price and cost of broadband connection or even dial up connection. I am living in HK now and the cost of my 10M cable broadband connection is about HKG$109 per month dollars with unlimited access as well as including residential phone and cable television connection, a whole thing as a package. In aussie term, it is darn cheap at about AUS$20 dollars.
For ADSL connection, it is vary from HKG$99 dollars for 1.5M to HKG$169 for 6M line and all are unlimited access.
Though both are cheap, the upload speed is always fixed at around 80K to 250K.
There are new type of connection nowadays allowing 100M to 1000M upload and download both way, including pay television and phone package which cost about $200 – $450 per month.
This is really sad.
I want to move to Australia — originally from Canada. My business is IT, and here in Canada, I pay just $40 / month for 500GB download / month (yes, 500GB!). And the speed is phenomenally fast – around 16Mbps!
When i was in Australia last year, I was paying $50/month for something like 3GB / month before it became “shaped”.
It’s just so backward and still so in the dark ages. Even phone usage sucks there — I pay $20/month for a land line here.
We don’t even think about how long we’ve been talking on the phone or how much we’ve downloaded on the internet. It’s so nice.
I can’t imagine constantly thinking, “How many youtube videos should I watch. How much more bandwidth do I have. How long should I talk to my friend on the phone.” :-(
I hope things change — and change quickly. Canada is now mostly Asian immigrants and I love that Australia still has a strong culture and heritage. I want to move! :)
Telstra should report the setup costs and the amount of profits generated from the internet business. I guess the turnover ratio would be more than 10,000 to 1 and still increasing rapidly.
By the way, they are charging higher price in rural areas too. And the price is high enough to have satellite internet (check out MyBlueDish.com for example) Are the satellite setup costs more for telstra because of the “LARGE” coverage area?
This is BS. There should be no cap or limit on internet. Canadians pay a simple flat rate for their unlimited data use. I don’t think Australia deserves to be called a developed country if it does. Simply too bad.
Its shock horror prices ausies are forsed to pay 4x the amount i pay for my 10meg £29..virgin uk my brother paid 4x this just for his bb i get my tv mobile and landline all in one pack..the Ausie Gov needs to spend more yes and allow it to be more affordable ..my bro moved to aus 4 yrs ago i just found out as well i am about to be an uncle again in january next year..im never gonna get to see my nephews or nieces due to the high cost of everyday living ..but this day and age we have the good old camcorder and camera…untill ausie gov makes bb cheaper
I have been in the us for 12 years but I pay for my son’s internet back in Adelaide, I pay about $140 a month for 10mg, and it’s adsl and has issues like back in the 90′s here. Then he told me his landline bill was $500 I almost fainted. What the hell? I asked if he’s talking long distance he said no, all local calls. I can’t believe it, I don’t remember it being that expensive. Why is a landline so much???? And I bought him a playstation 3 when I went back about a year and a half ago it was $800 aud. Here theyre about $200 haha
I understand the high costs of Internet, because of the use of the SXC network overseas, etc. Perhaps the ISPs can un-meter the use of Australian websites?? When I go into Netbank or smh.com.au, the data is staying in Australia… there shouldn’t be any extra cost for those types of site access.
I recently a modem stick from Optus. I’ve got only 4GB and I spent for AUD$70 and expire for 3 months. Moreover, the sever is not really good, i have to find an area to make it faster. 4GB, I cannot download anything!!!!