NBN: higher prices for slower speeds

Millions of Australians forced onto the NBN will pay more for slower speeds, and they’ll also be forced to foot the bill for the money borrowed to pay for the network’s construction.

So far, the NBN has cost around $49 billion in construction costs. To recoup this money, NBN Co charges telcos higher bandwidth fees. These charges will be passed onto the customer in the form of scaled back speeds at certain times of the day.

NBN Co charges telcos around $10 to $14 per 1Mbps of bandwidth they buy, depending on how much they purchase. These high costs mean that telcos only buy around 1Mbps for each customer on a 25Mbps plan.

As a result, during peak times, some NBN customers may experience speeds up to 1/40 of what they now get – even though they are paying the same or more for ‘faster’ services.

NBN providers have been flooded by complaints from customers saying that their connections are much slower than the speeds they previously enjoyed. One customer is receiving speeds up to 1/100 of what he believes he has paid for.

“As everyone else, I am getting 1 per cent (1 megabit per second or even less) of contracted speed (100Mbps) during peak times,” said the user. “After searching around I could see this is really a common Optus problem all around the country.”

Another user added: “Simply put, they [telcos] don’t purchase enough bandwidth from the NBN. They buy enough for 10 people but sell it to 100 people, so at peak times it’s useless.”

Are you connected to the NBN? Are you having similar problems? Or are you happy with your product?

Related articles:
NBN cost blowout
NBN rollout enters metro phase
NBN broadband or fraudband?

Written by Leon Della Bosca

Leon Della Bosca has worked in publishing and media in one form or another for around 25 years. He's a voracious reader, word spinner and art, writing, design, painting, drawing, travel and photography enthusiast. You'll often find him roaming through galleries or exploring the streets of his beloved Melbourne and surrounding suburbs, sketchpad or notebook in hand, smiling.


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