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(first published in Parramatta Business Access)

By Dexter Duncan

One of the critical elements that needs to be in place for Cloud Computing adoption is a cost effective broadband connection.   Having a dedicated link is often too expensive, especially if you are only using the cloud or connection for a short while.      Since many of the global players tend to locate the computer where power is cheap, the cost of the bandwidth relies on your internet connection.     In short, as long as it is cheaper to send a courier (to the data center) than to upload your data, the hosted solution will not be popular.

This article focuses on broadband in Australia, including the relative cost of getting a big pipe and the cost of data.    Outside of some private networks, much of the country of Australia has been based around a relative small number of players, with the largest being Telstra.     The government of Australia has acknowledged that Telstra does not provide good value for money and this is one of the reasons the National Broadband Network (NBN) was conceived.

In 2004, $450/month would buy 80GB data with 6M down/0.6M up.     $500/month today gets you 5M down/up and 300 GB data.    Even today, you still get quotes for more than $1,000 per month (for 5M/5M service) if you do not know how to shop around.

How does all this tie into the $40Billion NBN (National Broadband Network) that the Aussie government is planning?  This article discusses internet prices and encourages you to relook at your IT costs in this area.

First, let’s put Australia in context globally when it comes to internet.

According to a popular site that tracks world internet speeds, Australia ranks 59 in the world in terms of average upload speeds and 40 in average download speeds.   (We typically have 1.29 Mbps in upload speed and it is really sad to see us behind places like Ghana,Ukraine and Mongolia! As a comparison, Korea has approximately 20 Mbps upload which is a more than 10 times greater.)

We seem to be falling behind even our largest third world trading partner.   China is often mentioned in some on-line ISP forums as having superior value for money in terms of broadband speeds.    These sentiments (and a fear of falling behind as the “clever country”) is driving us to push for a national fiber network (called NBN) with our without the monopoly of Telstra on-board.

Some of the major ISP players other than Telstra and Optus include iiNET, Internode, TPG and Exetel.       Some of the folks in Tassie are now paying only $70/month for 25M down / 2M up with 200 GB of data under the “NBN trial”.

There is a heap of unused fibre (called “dark fibre”) already throughout Australia.   There is also already a large copper network that reaches most of Australia.   Other than leasing/buying this off Telstra, the expensive bit is to deliver the “last mile” to the office/home.    Most major CBD’s in Australia have options for fibre, but regional area and homes have only copper, satellite or (sometimes) wireless/cable.

Some Types of business grade offerings*:

  • Business Grade ADSL
  • Ethernet over Copper
  • Bonded DSL
  • Extreme SHDSL
  • Fibre/NBN

The multitude of options is mindboggling.  Key things to look at that impact time or costs:

  • Upload
  • Contention Ratio
  • Data allowance – and fee for exceeding

Upload speed is usually much lower than download, but it causes the most grief when you have more than one office.   The contention ratio is how many other businesses/homes are sharing the same connection.    Think of it as multiple cars sharing the road.  The more cars you have, the more congestion occurs.    The best contention ratio for business is 1:1 which means 100% of the speed is dedicated to you – kinda like owning your own motorway.

Despite prices falling over the last few months, they are still more than triple what the NBN folks are paying for equivalent services in Tassie.   This is one of the reasons folks are so excited about NBN. If you focus your decision criteria on above, you’ll find that Ethernet over copper (where available) is a bargain when compared to other services.

Some sample prices, with availability often dependent on distance to exchange:

DownSpeed UpSpeed Data Allowance Price
Business Grade SHDSL(Exetel) 4M 4M 200 GB $750
Extreme SHDL(Internode) 5M 5M 25 GB $700
Ethernet over Copper(Exetel) 10M8M4M 10M8M4M 500 GB400 GB300 GB $600$550$450
Business Grade ADSL (Exetel) 4M 0.5M 40 GB $300
Bonded DSL(iiNet) 10M 2M 100 GB $280
NBN – Fibre(Internode) 50M 4M 200 GB $120
NBN – Fibre(iiNet) 25M 2M 200 GB $70

*Note:  if you have a budget more than $1500/month with multiple sites, you can also consider a managed service Wide Area Network (WAN) which will give you high speed, secure and highly reliable connections without having to worry about maintaining hardware yourselves.

Exetel is often less expensive for similar or better technology to others, so they are a good reference point.    There are some consumer grade options available; however, you are usually sharing the highway with16 or more other places (called contention ratio) which limits your actual speeds somewhat.

What to do:

  • Do a speedtest.   This site is easiest to use.   Speedtest site
  • Check your Plan – is it value for money when compared to above?
  • Check your actual costs – what are fees for exceeding data allowance
  • Ask your users – is the internet slow?
  • Do a check on if you are in a serviceable area.  Use iiNET for this.  More detailed searches are available on whirlpool site.
  • Shop around:  Go to www.whirlpool.net for a good listing of all ISPs available in Australia.

Once you get answers to above questions, compare to the pricing available.   Be sure to check the contention ratio offered on the plan, otherwise you could end up with an internet connection similar to peak hour traffic.  To find out more about Internet solutions, contact your local technology partner.

See our website or contact us for more information:

www.EmpowerIT.com.au

About the author: Dexter Duncan provides marketing advice and heads marketing and business development at Empower IT Solutions. Contact Dexter at dd@empowerit.com.au

Some References:

1) NBN 101: Is Australia’s NBN world class?

A look at how the NBN compares to the rest of the world James Hutchinson (Computerworld) 17 May, 2010 http://www.computerworld.com.au/article/346738/nbn_101_australia_nbn_world_class_/?

2) For Global comparisons of Internet Speeds, see:  http://www.speedtest.net/global.php#0

3) For ISP choices and good information on what is available:  www.whirlpool.net.au

4) To run a speed test on your existing Internet: http://www.speedtest.net

5) Both iiNET and Whirlpool websites can give you information on what Internet service is available in your area.   iiNET site is a very quick check. http://www.iinet.net.au/broadband/plans.html

A more thorough check can occur on Whirlpool site, however, you may still need to “sign-up for a service” before you know for sure. http://bc.whirlpool.net.au/bc/?action=search

2 thoughts on “Is NBN in Australia Driving down internet prices?

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