Mobile broadband up to 1333 times more expensive than fixed-line broadband: analyst
- 23 May, 2011 11:54
- Comments 7
Pricing comparison table from Market Clarity report.
This is not a typo. On a per gigabyte basis, mobile broadband can be up to 1333 times more expensive than fixed-line broadband, according to analyst firm, Market Clarity.
In a report titled The Cost of Mobility, the company compared the most expensive mobile plan per gigabyte with the cheapest fixed-line broadband plan per gigabyte to get such an alarming figure.
But even by comparing the cheapest post-paid mobile and fixed-line plans, there is still a huge discrepancy between the two types of services; a 27.7 times price difference to be exact.
This price gap has been exacerbated by the release of terabyte and unlimited plans which were all the rage last year.
“There has been a lot of talk about the National Broadband Network [NBN] and why do we need it because we have mobile broadband,” Market Clarity CEO, Shara Evans, said. “Mobile broadband is great but there are some limitations and one of the biggest one is price since usage allowances are really quite small compared to fixed-line.”
The exorbitant price of mobile broadband is not a new phenomenon in the industry. It is widely known that users pay a high price for the convenience of portable data service. But as tablets and smartphones gain popularity, the price imbalance will have a wider impact.
According to Market Clarity, there are more than 2700 DSLAM sites for fixed-line broadband and in excess of 14,000 base station sites for mobile broadband as of September 2010.
Considering each base station requires equipment, backhaul, purchasing of real estate and spectrum acquisition considerations. This sends the cost of deploying a wireless service through the roof.
A fixed-line service is much simpler and comparatively cheaper to rollout since it requires less sites.
All this coupled with complex engineering requirements means mobile broadband will always have a premium attached to it, according to Evans. But that doesn’t mean there is no room for prices to go down even though they are unlikely to be as low as fixed-line plans.
“As demand and usage goes up in terms of mobile broadband use, there should be cost benefits that accrue because of the nature of buying additional backhaul capacity in bulk,” she said. “Or if you deploy your own fibre, that fibre is there no matter how much traffic goes over it.
“Also, cost of putting a base station to a site will also cost the same irrespective of how much end users download from the site.”
Without a change in mobile broadband tariffs charged by telco carriers, there are very few solutions to remedy the pricing problem.
“But education and looking at comparisons of plans is a good first step,” Evans said. “Consumers need to make choices on which technology they use when and where.”
Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.
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Comments
iHope
This vast discrepancy between the price of fixed and mobile internet access is perhaps the real reason that merchant bankers such as Mr Turnbull are opposed to Australia's investment in better and fairer fixed line data services such as the NBN.
Why provide fixed infrastructure that will supply socially equitable fair priced and unlimited access to data services for all when you could instead substitute a majority wireless network that has higher cost and more limited access to everyone and ultimately benefits only wealthy shareholders and real estate speculators?
We actually need the productivity of both fixed and wireless mobile internet access and subscribers with both services will use the unlimited data fixed service for most of their data activity, and mobile data services for the utility and productivity needed in transit. The point is that a wireless only service would not provide the functionality and social equity that both services provide and a wireless only service would be too expensive for a considerable percentage of the population.
To reduce the cost of purchasing real estate for wireless base stations, especially in rural and regional areas, perhaps we need a process that encourages installation of base stations on private land in return for free and unlimited data for the land owner, once the Fibre is available to light the location.
Finally there are some wireless internet providers, such as VividWireless, that are rolling out WiMax and LTE infrastructure and already have unlimited data option plans for subscribers and as they expand their network coverage this will set the market expectation.
Kevin
And your comments Messrs Turncoat and Abbot!!!
Fixed live vrs WiFi has been a no-brainer from day one, for those with a brain that is not permanently stuck on the $$$$ sign.
Jason
@iHope: "unlimited data fixed service"? Errm... even the U.S. ISPs are moving away from unlimited data fixed broadband plans. Turns out that "all you can eat" is a losing business model once you have sufficiently many Homer Simpsons in your customer base.
That aside, yes, if Mr Turnbull can pretend that a 3G data plan is a replacement for a decent fixed broadband plan then he truly is showing himself to have the outlook of a merchant banker rather than an ordinary person. I suppose that he delegates something so tiresome as any large downloads to a minion sitting at a fixed line PC, and concentrates instead on posting tweets from his iPad. The rich really are from a different planet...
iHope
@Kevin: Yes it is exactly that point that makes the political arguments so futile, those in opposition keep referring to WiFi as the alternative to the NBN, Mr. Abbot has stated that the WiFi at his Coffee shop is adequate for his needs, but he fails to grasp that WiFi is a cheap cordless private LAN (Local Area Network) usually connected to a nearby wired network, NOT a massive wireless public WAN (Wide Area Network) connected through an expensive complex array of multiple high powered professional wireless base stations which are in turn connected by hardwire to telephone exchanges that link our optical and copper based voice & data networks and national backhaul together. Wifi as a cordless facility can also locally connect to the wireless aspects of our subscriber based WAN internet, 3G, WiMax and LTE to a private LAN as well, but it cannot replace the public WAN. WiFi also can not support many users at a time and it slows down as each user is added. WiFi is to a local premises based internet connection the equivalent analogy as a cordless phone is to your POTS wired voice connection, and most people know that they can't take their cordless phone very far away from home and still be connected to their fixed service phone line, but by contrast a mobile phone will work away from the home or office phone line. So it is with WiFi, you leave the fixed line connection area and you soon lose the CORDLESS WIFi extension of it, so therefore not an all encompassing solution for most applications and certainly not an alternative for NBNCo's FTTP as WiFi will also not give you mobile data services. The Difference is subtle but functionally important
If they want the right to push opposing opinions, don't we deserve that they at least have a fundamental understanding of the subject matter. It is not enough to be competent at debating en masse ;-) and yet really know nothing at all of the technologies and comparisons involved. Certainly any politician would choose to ensure that a member of the public had a high academic standing before taking any notice of their comments or recommendations. If only some of our politicians had technical backgrounds and understood engineering! Instead they rely on "being informed“ and it's not the most desirable method of forming valued opinions and avoiding lobbyist agendas.
Cont...
iHope
The truth is that even choosing current and/or upcoming wireless only options and topographies for future broadband in Australia rather than FTTP as NBNCo proposes, would require the same Optical Fibre technology for backhaul interconnects that have to be installed to replace the wholesale copper networks that Telstra have not yet upgraded for us between the Cities, Suburbs, Towns, Rural and Remote areas, and then to connect all the many Wireless Base Stations to each telephone exchange as well. This is the majority of the overall cost component of the infrastructure upgrade and applies to both a wired and wireless paradigm, the argument then becomes is it cheaper for government to connect each residence to nearby broadband optically or wirelessly and the answer is probably a surprise. We have no choice regarding the backhaul and the longer we wait the costlier that gets, therefore the more we will pay at retail.
Consider the high cost of electricity as a proof of what happens when utility services are instead neglected.
In either a fixed or wireless proposal, the actual network upgrade costs will eventually be covered by the users of the system and NOT taxpayers as it is with all utility services, for example your power bill covers not just a cost for energy used, but the cost of repaying the loans used to create and maintain the electricity generation facilities and delivery networks. But it suits the political debate to misguide the public into believing that only the taxpayer is forking out tens of billions for the NBN. Public health infrastructure and services, Government and public service costs, DOD, Military services and welfare costs are covered by the taxpayer, commercial Internet broadband and telephone services are not, they are user pay facilities that require high up front investment and patience - please don't be hoodwinked!
Cont...
iHope
@Jason: Yes the US is currently turning away from unlimited data plans but Australia has actually emerged from the other side of that process. Our economy is strong now theirs is on life support. We have high employment and work long hours and they have no employment and many bored net monkeys online constantly, their merchant bankers are seeing return on Telco shares tanking ours shares are more stable. We do however share the same tyranny of distance with North America (including Canada) but they have a much higher population and customer base but they have more antiquation in the Telco infrastructure. Ultimately we all have to bite the bullet and update our networks. The future payback for Broadband is actually based in “content” and it will be a two way market, both creation and consumption of content, another reason that wireless only with such bad upload speeds cannot be a fix all solution.
And No us rich people don’t come from a different planet, we just act like we do because some bloke mind humped us by suggesting that it impossible for rich folk to enter paradise, so we want ours now ;-)
Rob
After all the arguments feel sorry for us who have no choice but to use mobile purely for the fact that some short sighted developers decided there was no need for enough fixed lines to supply each unit in a complex with phone line and ADSL service (Which I thought went through the same line).
I have however learned a lot about the internet including who own which towers and who is allowed to use them and black spots and oh did you know black spots breathe? Yes apparently they are living beings that breathe in and out like you and me and whenever they take a deep breath I lose reception.
I'm sure the phone operators are handed a book of excuses when they start there job and I suspect its bigger than a phone book.
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