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Australian Wireless Broadband Pricing Study
Telsyte, Oct 2004, Pages: 117
In recent times, Wireless Broadband Services have experienced a rapid increase throughout Australia, with continued explosive growth targeted for at least another 5-years. Wireless Broadband’s characteristic of easy, quick and cheap implementation, make it a very strong contender for users unable to connect to higher speed data services via a conventional DSL or cable connection. Wireless Broadband technology offers the same great features as those offered by other broadband connections available today. The incredibly fast speeds and 'always on' features are the same as those offered by cable or ADSL broadband technologies. Wireless Broadband technologies also offer the additional functionality of access to telecommunications services while on the move.
This report analyses Industry pricing trends for Wireless Broadband Internet services in Australia. Although there are several wireless access methods available in the market, for this report, we have analysed WiFi ('hotspot') and Wireless Local Loop (WLL) services only.
Pricing plans for the Residential and Business markets have been segmented, and are analysed separately where applicable.
We have further segmented our analysis into Metro and Regional area pricing for the Residential and SME markets.
For the analysis of WLL Wireless Broadband services we have divided the analysis into two parts, lowest cost plan and best-fit plan, to reflect the cost for both an uninformed and an informed service user.
The Lowest-cost plan analysis considers the lowest-cost monthly plans of each service provider, regardless of the monthly downloads included, applying additional fees once the user has exceeded their monthly MB allowance. One of the greatest challenges for wireless access users is the need to know their monthly usage in order to sign up for the correct plan. Subscribers, particularly in the residential market, rarely know what their usage patterns are, and as a result often end up paying for the additional MB and hours used. The Lowest-cost plan analysis was undertaken in order to investigate the pricing for a subscriber unaware of their monthly usage pattern, as they will tend to opt for the Least-cost plan.
For the Lowest-Cost Plan analysis, price modelling is based on monthly usage patterns of 500 MB, 1,000 MB and 3,000 MB per month for the Residential Market, and 500 MB, 2,500 MB and 5,000 MB per month download usage for the Business Market. Some plans also incur charges for uploads but only download charges have been included in this analysis. The monthly fees for any given service provider's plan have been adjusted according to the excess download fees and hourly usage fees that would be applicable for the 500 MB, 1,000 MB and 3,000 MB (or 500 MB, 2,500 MB and 5,000 MB) monthly downloads.
The Best Fit Plan analysis looks at the most suitable plan with respect to a user's monthly download usage pattern, applying additional fees once the user has exceeded their monthly MB allowance. This study was undertaken to investigate the pricing of Wireless Broadband services for an informed user, one who is aware of their monthly usage pattern and thus chooses the most appropriate plan. The best-fit plan of a service provider was assumed to be the plan equal to or just above the modelled MB download that a service provider is able to provide.
For the Best-Fit Plan analysis, price modelling is based on monthly usage patterns of 500 MB, 1,000 MB, 3,000 MB, 5,000 MB, 10,000 MB, 20,000 MB and 30,000 MB per month for the Residential Market, and 500 MB, 2,500 MB, 5,000 MB, 7,500 MB, 10,000 MB, 20,000 MB, 35,000 MB and 50,000 MB per month download usage for the Business Market. Some plans also incur charges for uploads but only download charges have been included in this analysis. The monthly fees for any given service provider's plan have been adjusted according to the excess download fees and hourly usage fees that would be applicable for the respective monthly downloads.
For the Hotspot service analysis, price modelling is based on monthly usage patterns of 40 hours, 80 hours and 240 hours per month for the Residential Market, and 40 hours, 200 hours and 400 hours per month download usage for the Business Market. The monthly fees for any given service provider's plan have been adjusted according to the excess hourly usage fees that would be applicable for the 40 hour, 80 hour and 240 hour (or 40 hour, 200 hour or 400 hour) monthly downloads.
For WLL Wireless Broadband access (Metro Areas) the following access speeds were covered:
256 Kbps Download / Various Upload
512 Kbps Download / Various Upload
1,024 Kbps Download / Various Upload
For WLL Wireless Broadband access (Regional Areas) the following access speeds were covered:
256 Kbps Download / 64 Kbps Upload
256 Kbps Download / 256 Kbps Upload
512 Kbps Download / 128 Kbps Upload
512 Kbps Download / 512 Kbps Upload
1,024 Kbps Download / Various Upload
1,500 Kbps Download / 256 Kbps Upload
Hotspot (Wi-Fi) Wireless Broadband access speeds are usually uncapped with speeds up to 54 Mbps, dependant on the technology used, distance from the antenna and the number of simultaneous users.
The pricing presented in this benchmark report represents market rates for Wireless Broadband services provided by a range of Australian ISPs. In order for any figure to be listed in this report, we require a minimum of 10 samples from a minimum of three carriers/service providers. We do note, however, that most Wireless Broadband prices measured in this report contain 100 or more pricing samples from over 60 service providers.
Benchmark findings are expressed as:
Industry Low;
Industry Median;
Industry Average (arithmetic Mean of the sample values);
Industry Trim Mean (excluding the top and bottom 10% of industry samples); and
Industry High prices.
Data users looking for mobility are an easy target, it seems, with wireless broadband prices varying by huge multiples according to the Australian Wireless Broadband Pricing Study
While the canny customer can pick up a 512 Kbps residential wireless connection with a comfortable 3 GB monthly download limit for $60, the same speed with the same monthly capacity can cost more than ten times as much. The Australian peak price for a 512 Kbps, 3 GB service is close to $500 per month.
Heavy users also need to be careful: while some services don't impose excess download charges, the price can be as high as 45c per megabyte - three times the excess price charged by Australia's largest ADSL service providers.
The Australian Wireless Broadband Pricing Study finds 'road warriors' can burn bigger holes in their pockets, with the most expensive hotspot services costing nearly eight times as much as the best deals. For 40 hours per month of hotspot access, the best price the study found was $79.95, while the highest price was $600.
Those in regional Australia with access to wireless services fare somewhat better than city-dwellers. The industry low for a 512 Kbps, 3 GB service, at $60, is identical to that offered to metropolitan users, but the highest prices ($466 for the same speed and quantity) is slightly lower.
The Australian Wireless Broadband Pricing Study also finds a surprising consistency nationwide, with regional and metropolitan users experiencing very little difference in Median and Average prices for residential wireless services.
About the Australian Wireless Broadband Pricing Study:
This report analyses Industry pricing trends for Wireless Broadband Internet services in Australia, with a focus on 'hotspot' and WLL services. For the analysis of WLL Wireless Broadband services, the analysis was divided into two parts, Lowest-Cost plan and Best-Fit plan, to reflect the cost to both an uninformed and an informed service user.
Key Findings in this study:
October 2004 prices for Wireless Broadband services varied quite considerably across the industry. For Residential Wireless Broadband services, the difference between Industry Low and High price points under the Lowest-Cost Plan analysis varied by up to 1653% (Observed for Metro Area Residential Market Wireless Broadband 256 Kbps Downlink / Various Uplink Speeds), indicating the extent of variation in market prices.
The lowest-cost plan available to the consumer in both the Regional and Metro area Residential markets was priced at $19.90 per month which included 500 MB of downloads per month at speeds of 256 Kbps Download / 64 Kbps Upload.
The lowest-cost plan available to the consumer in both the Regional and Metro area Business markets was priced at $29.95 per month which included 500 MB of downloads per month at speeds of 256 Kbps Download / 64 Kbps Upload.
Both residential and business customers can realise huge savings by staying aware of their download behaviour.
Residential users can cut their excess fees by four-fifths with a careful choice of service provider and plan, while business users can halve their excess download charges.
Hotspot Service prices varied quite considerably across the industry also. For example, for Residential Metro area Hotspot services, the difference between Industry Low and High price points varied by up to 650% ($520) for 40 hours of usage.
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