Do mobile broadband benefits explain their high costs?
Mobile broadband solves a lot of the drawbacks of fixed wired broadband services. They give you mobility, so you can take your internet connection where you do, as long as your provider has network coverage. They are also easy to set up so you don’t have to pay installation fees, or re-connection fees when you move.
Wired broadband services fail in those two aspects. They are stuck wherever they are installed, so you can’t take your internet connection with you. They can also cost you money to install because a technician likely has to physically set it up for you. Also, if you move house, you might have to pay to have your service reconnected wherever you move to.
Our survey shows that Australians find these two broadband drawbacks to be significant. Seventy percent say they want to be able to take their broadband wherever they go. Seventy-seven percent say they shouldn’t have to pay to reconnect their broadband when they move house.
Australians want mobility in their broadband service.
But are these drawbacks enough to explain why mobile broadband is so expensive in Australia? Wired broadband solutions have their own benefits, but they might cost less than mobile broadband when you consider their data inclusions. So why is there such a difference in data costs?
Mobile data, in general, is more expensive because of infrastructure costs
It’s not just mobile broadband data – mobile data, in general, is more expensive than wired data. The reasons behind this are the high infrastructure and acquisition costs involved with mobile data.
- Spectrum licensing costs
Mobile data relies on spectrum, which is licensed and allocated by governments, typically through auctions and bids that cost millions and billions of dollars.
- Infrastructure setup costs and maintenance
Telcos must build numerous base stations throughout the country to ensure coverage for customers. This results in a lot of expenses and costs. For instance, real estate costs for base stations, back haul costs, the spectrum cost itself, as well as frequent maintenance.
- Qualcomm patents
Telcos also need to pay licensing fees to Qualcomm, which holds patents to a lot of mobile network technology, including EV-DO, WCDMA, HSPA.
Mobile network technology gets upgraded frequently. For instance, from 2G to 3G to 4G and, now 5G. These upgrades require new infrastructure for their lengthy, expensive rollouts.
While fixed broadband services have their own costs, they aren’t as high as mobile broadband, or mobile data in general. The high costs of mobile data all boil down to those infrastructure and acquisition costs being passed down to the end user.
Mobile broadband plans in Australia from Optus, Telstra and TPG Telecom (Vodafone)
All three of the major telcos in Australia offer mobile broadband plans. You’ll also find offers from many MVNOs in the country, such as Amaysim, OVO, and Yomojo. This means that even though mobile broadband might be considered as expensive when compared to fixed broadband, the competitive market means you’ll still find a lot of great deals.
Prepaid broadband vs postpaid broadband plans
Another benefit of mobile broadband is the choices you have. There are contract plans that usually include a mobile broadband device that you pay off monthly. You could also get short expiry plans that might last you a week or two, normal expire plans that last around a month, or long expiry plans that last for 90 days or more.
Mobile broadband plans are usually either postpaid or prepaid.
- Postpaid mobile broadband plans are paid for after your billing ends and after you use the inclusions. These can be contract plans that last as much as 24 or even 36 months, or month-to-month plans that you can opt out off without penalty. Postpaid plans typically require a credit check. You also risk data overage charges with these plans because they just keep running even though you exhaust your plan data.
- Prepaid mobile broadband plans require you to pay for your plan inclusions before you can use them. They can be short expiry, normal expiry, or long expiry plans. They don’t require a credit check, you can stop recharging without any penalty, and your data shuts off once it is exhausted so you don’t get charged for excess data unless you opt for it.
Your mobile broadband plan is powered through a SIM. If you have a device with a SIM slot, then you simply plug in your SIM card into the device – for instance, a tablet.
But there are also mobile broadband devices like pocket Wi-Fi and dongles. These devices have SIM slots as well, but they give the added advantage of simultaneous connections for many devices. However, USB dongles that plug directly into a device might only power that device alone.
Telcos might sell mobile broadband devices, in which case they are usually locked and will only work with that telco’s SIM plan, unless you unlock the device. Telcos will also give you the option to bundle the mobile broadband device with a mobile broadband plan, so you can pay for it in monthly installments.
To figure out the right plan for you, be sure to check the provider’s network coverage. Also take note of your internet usage to determine which data plan fits your data usage needs.