Report: ADSL residential prices not so cheap

A new report into ADSL pricing has claimed the overall cost of residential plans has fallen by less than one per cent since the introduction of sub-$30 broadband plans in February.

Although the price of the cheapest entry-level residential ADSL service has dropped by about 54 per cent since February, the average cost of a residential ADSL plan in Australia has decreased by just 0.79 per cent.

In contrast, ADSL plans targeting SME users dropped by an average rate of 17.22 per cent between February and April.

The figures form part of research organisation Telsyte’s new report into the impact of Australia’s broadband price wars following the launch of Telstra’s $29.95 ADSL offering earlier this year.

Telsyte managing director, Shara Evans, said the report was focused on calculating the costs of consumers signing up to a volume-based plan, but downloading varying amounts of data, as compared with similar charges in February.

The report compared the costs of tariffs and excess usage charges for downloading 500MB, 1000MB and 3000MB worth of data on a residential ADSL plan in a month, and 500MB, 2500MB and 5000MB worth of data on an SME plan.

The report also compared ADSL plans for both residential and SME users.

These were broken down into plans based on 256Kbps/64Kbps, 512Kbps/128Kbps and 1500Kbps/256Kbps access speeds. Evans said 400 ADSL offerings from 62 ISPs of varying sizes nation-wide were randomly selected for the report. They were then used to calculate the median rate for each type of plan available in the ADSL space.

According to Evans, users aren’t necessarily better off for having signed up to a cheaper priced ADSL service.

While Telsyte noted some savings across SME and rural plans, many consumers were losing out through extra fees resulting from excess download usage, she said.

The Telsyte report claimed the majority of residential users choose to sign onto usage-based plans with low monthly access fees. However, the actual costs of low-priced ADSL services such as those advertised by Telstra and its competitors vary enormously, depending on the amount of data downloaded.

For example, the report claimed that while ADSL entry-level plans are available with tariffs as low as $19.95 per month, typical users downloading 500MB per month could expect to pay at least $29.95, with the average more like $73.30 per month. Similalrly, those who signed up to the same speed plan but download 1000MB per month would pay an average of $108.27, the report found.

It also compared the costs of ADSL services between metro and regional areas, finding prices in regional areas had in fact worsened for heavier ADSL users on a 256Kbps/64Kbps plan.

For instance, the median rate for users who downloaded more than 3GB in a month on a 256Kbps plan was 39 per cent higher at the end of April as compared to February, Evans said.

Evans warned consumers and SMEs to watch their level of usage and gauge the type of excess usage charges their chosen ISPs had in place.

Some ISPs offered “slow motion” or speed shaping plans, which took away the risk of incurring further monthly charges, while other providers had assigned excess download caps to their ADSL plans.

More often than not, however, there wouldn't be an excess usage cap in place, Evans said.

ISPs also need to work with customers to figure out their data usage and steer them towards the correct plan for their needs, she said. “They [ISPs] may end up losing the customer if they’re signed up to the wrong plan,” she said. “Regardless of the type of customer, this is an area that can differentiate ISPs in the channel.”

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Nadia Cameron

Nadia Cameron

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