Huge mobile broadband charges boost NBN case

Mobile broadband can be up to 1333-times more expensive than fixed broadband services, an analyst group said.

The Cost of Mobility: Comparing the Value of Fixed and Mobile Broadband report by Market Clarity contrasted the priciest mobile plan with the cheapest broadband plan, coinciding with the launch of aggressively priced, all-you-can-eat fixed broadband plans by Australian carriers.

The study reported that there were 4.2 million Australians using mobile broadband services in December 2010.

“While carriers are looking for ways to increase the revenue they receive from mobile broadband services, fixed providers are expanding their data allowances,” said Market Clarity chief executive officer Shara Evans. “The resulting dynamic is that the ‘value gap’ between the two technologies is widening, and may continue to do so for some time.”

Even the most favourable comparisons between the cheapest mobile and fixed plans found the former close to 28-times more expensive than the latter.

The findings fly in the face of claims by the federal Opposition that high-speed wireless services eroded the case for the National Broadband Network.

“There has been a lot of talk about the National Broadband Network and why do we need it because we have mobile broadband,” 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 study also noted that users of pre-paid mobile broadband services were getting an especially raw deal, paying between 3.2 and 5.8 times the per GB cost of post-paid services. The cheapest per-GB price for pre-paid mobile broadband was around $10, roughly 160 times the same $0.06 per GB fixed broadband plan. Fixed broadband data allowances are 100 times the median pre-paid "recharge" volume, and 40 times the median post-paid volume allowance, the study found.

A reason why mobile broadband prices were so high was the relative cost to maintain mobile base stations against that of running fixed broadband infrastructure.

There were 14,000 base stations delivering mobile broadband services in Australia compared to 2700 exchanges with fixed digital subscriber access multiplexers (DSLAMs) - the modules that sped phone lines to connect users to the internet. Mobile base stations occupied property and needed wireless spectrum often bought at public auction.

Market Clarity added that the exploding popularity of new mobile devices such as tablets and smart phones was contributing to higher network management costs.

But Evans noted a number of factors pointing to a fall in mobile broadband prices in the future: “As demand and usage goes up, there should be cost benefits that accrue because of the nature of buying additional backhaul capacity in bulk”.

And if operators deployed their own fibre, it was "there no matter how much traffic goes over it", she said.

“Also, the cost of putting a base station to a site will also cost the same irrespective of how much end users download from the site.”