Internet Industry Association

Something strange is happening in the Australian broadband market.

According to the latest Venture Consulting / IIA Broadband Index, high speed 17Mbps broadband plans are now among the cheapest in the market. In other words, customers on slower plans are paying more for the same amount of data.

[Full copy of the report at http://www.iia.net.au/upsidedown.pdf]

“That’s like finding running a Ferrari is cheaper than a mini,” Justin Jameson, CEO of Venture Consulting commented.

At the same time, wireless data plans have continued to fall in price. The best value 1GB/mnth wireless broadband plan is now one third the price of an equivalent fixed plan – just two years ago it would have cost 33% more.

Figure 14: Historical comparison of 1 Mbps speed fixed and wireless BB services pricing ($/month)

What is going on? Why can Australian customers get less for more? Or put another way, why are many customers paying more for less?

The answer is competition. Prices have fallen fastest in those segments where competition is strongest (wireless and ADSL2+). These markets are characterised by strong, facilities based competition.

"The message for consumers is clear,” said IIA’s chief executive, Peter Coroneos. “Take a close look at the higher speed plans."

In the ADSL1 markets, competition is less and is often based on Telstra resale rather than unbundling. In these markets, prices have been largely stable for the three years of the study.

“We are very pleased that prices are coming down in several broadband service categories, “Coroneos, said.

About the Internet Industry Association

The Internet Industry Association (www.iia.net.au) provides policy input to government and advocacy on a range of business and regulatory issues, to promote laws and initiatives that enhance access, equity, reliability and growth of the Net within Australia.

About Venture Consulting

Established in Australia since 2004 Venture Consulting is Australia’s leading specialist media and telecoms consultancy firm. Venture Consulting has access to global resources across thirteen offices and five continents. It undertakes
assignments for communication operators, service providers, broadcasters, digital media firms, Governments, regulators, vendors and financiers.