You need to be careful when choosing a broadband connection
The ongoing spat between Telstra and the Federal government is a symptom of the problems Australians face when going online.
To protect their revenues and investment, Telstra had to slow the adoption of the Internet in Australia. To do this they introduced a unique pricing policy with their broadband Internet packages which still affect us today.
Rationing data through punitative excess use charges meant that customers were exposed to big bills. It also meant smaller ISPs using Telstra’s wholesale Internet plans couldn’t offer unlimited plans like their overseas counterparts. Those excess use fees have proved pretty profitable for Telstra.
A few years back Bigpond CEO Justine Milne said that around half his broadband customers upgrade to more expensive plans. This is barely surprising, as the cheaper plans leave all but the lightest user with a big excess use bill. So it’s important to choose the right plan.
The right plan for you depends upon what you are going to use your broadband connection for. If you have teenage kids, you can expect to have massive music and video downloads, if you have have friends and relatives overseas you might find yourself using Voice over IP. The most important deciding factor is how much data you will send and receive, this determines your plan and it’s cost.
Data Allowances
Every time you go on the net, you transfer data. Every connection, every email and every web page involves data moving between your computer and the net. A light Internet user can expect to use around 400Mb a month, a typical user a Gb per month and a heavy user (those teenage kids again) over 5Gb a month.Most broadband Internet plans include a data allowance. If you go over that allowance you will either be capped, which means your connection is slowed or start paying excess fees. Those fees vary dramatically between 0.5 and 20c per Mb.
The cheapest plans generally offer a 200Mb allowance. The Telstra $29.95 plan charges 15c for each additional Mb. The light 400Mb a month user that does little more than check email and read a few web pages would end up with a monthly bill of around sixty dollars. For sixty dollars a month, you can get a much better plan with Telstra and an even better plan with one of their competitors.
Remember these assumptions are based upon a light user. If you have teenagers, or you like listening or watching streaming media your usage will be much higher. To help you figure out how much data you will use, Telstra have a usage calculator, use this to figure how much data you can expect to use then double the amount to be safe.
Capping
One way to avoid huge bills to choose a plan that caps your usage when you go over the monthly limit. Most broadband providers offer these plans. One thing to watch is the speed when you exceed these plans.
While speed caps protect against massive bills, they are frustrating. It’s best to choose a plan with a generous allowance that means you won’t get frustrated. Remember you will use double what you expect.
Speeds
With broadband plans you can choose what upload and download speeds you want. Naturally the faster you choose, the more you pay.This is another area where the unsuspecting consumer needs to be careful. Many of the cheap plans are the slowest available.
The slowest speed is 256/64, which means the download speed is around six times faster than a dial up modem, while the upload speed is only a little faster.When comparing plans, it’s important to make sure plans are of a similar speed. Faster is definitely better.
Pre Selection and Bundling
A lot of the cheap plans are linked to you agreeing to use that company for telephone calls. While they can be good deals the plans are insanely complex. Customers don’t like them and I agree.
Contract Lengths
Many plans try to lock you into a contract, just like a mobile phone. The longer you committ to, the cheaper the price so many cheaper plans have long contracts. With broadband prices are dropping all the time, getting locked into a two year contract may not be a good deal.
Installation
A number of providers are offering free installation. Read the fine print as this offer may only apply if you sign up to a longer contract or more expensive plan. For the average user, we’d recommend getting the ISP to send a tech out to install it for you, even if you have to pay an extra $200.
Free Months
Some providers are offering a number of ‘free” months. Like the “free” installation offers you’ll pay for these over the extended contract length or won’t get the cheaper or more flexible plans. Read the fine print.
Free equipment
Another “freebie” to get you in. All broadband connections require a special modem. For cable connections this is included as part of your plan. ADSL customers can supply their own modems.
Most ADSL providers will sell you a modem as an extra. While they tend to be more expensive than buying your own, we recommend buying their modem as it becomes more difficult for the ISP to play the traditional blame shifting game if anything goes wrong. This usually adds around $200 to the setup cost.
Like the other “free offers” a free modem may cost you more over the length of the contract. Keep reading that fine print.
Comparing providers
Telstra Bigpond is not the only provider. ADSL is a very competitive market and there are a lot of providers offering good deals. Broadband Choice is the site to visit when you want to find who can offer the best broadband deals.
Broadband is the best way to connect to the Internet but the plans are complex and are often designed to catch the unwary. Make sure you understand what you are getting into before you sign a contract. Shop around to find the best deal for you and remember that if it is too good to be true, it may well be.