Report claims expensive wireless networks mean wired better alternative for NBN

Higher costs and limited networking capacity are just some of the reasons why a wireless network will not deliver the same amount of service quality compared to a fixed-line National Broadband Network, according to a new report.

The findings come despite a growing number of telecommunications experts and industry executives claiming the Government should abandon the fibre network and instead create a massive network of wireless stations for a cheaper price.

They say this would be in response to the growing number of consumers who are now relying on wireless broadband services not only for smartphone plans but also for access within their homes as well.

But a new report from research firm Market Clarity has found that while the average cost per gigabyte for a fixed-line network is 30 cents, that figure jumps to a massive $5.27 for wireless access on post-paid plans and $16.67 on pre-paid plans.

The report also found the lowest average price per gigabyte was offered by TPG, whose $59.99 unlimited service effectively comes to a price of six cents per gigabyte. But the lowest pre-paid broadband plan costs $9.67 per gigabyte.

Market Clarity chief executive Shara Evans says the disparity is due to a wider range of costs imposed on mobile broadband providers as opposed to providers of just fixed-line networks.

“In terms of the gap between fixed and mobile, there are some big reasons in terms of underlying cost why the gap is so large. But it also needs to be noted that one of the biggest reasons for a drop in price on the fixed side is the introduction of terabyte plans.”

There was a rush last year of telcos bringing terabyte plans to market, as more users demanded higher download quotas. While many telcos advertise plans as “unlimited”, in practice these users have their speeds capped after a certain period – terabyte plans were an answer to that complaint.

But Evans says this has effects on the market overall.

“This has really driven down the cost of internet per gigabyte dramatically.”

On the other hand, costs of mobile broadband – while much cheaper when compared to a few years ago – are still high.

“The mobile broadband plans at their most generous do not really have large data allowances. The most generous post-paid plans have data allowances of a few dozen gigabytes, which is quite small, whereas the median data allowances for a fixed plan is 300 gigabytes.”

Evans points to various factors – the need for thousands of base stations to deploy mobile wireless, real estate costs and spectrum, which is a scarce resource.

Such factors feed in to the debate about whether the NBN should be made up of wireless or fixed access. And Evans says the argument isn’t that simple.

“When people talk about fixed or wireless in context of the NBN, people mix and match different kinds of wireless in the discussion. If you’re talking about fixed wireless networks which are in a similar capacity to DSL, in that you have DSL essentially on a tower, that’s different from mobile broadband.”

The difference between fixed wireless access points and mobile broadband mean designing wireless networks is a complicated task, especially as these wireless networks need to accommodate huge amounts of traffic at the same time – which isn’t so much of a problem for fixed networks.

“All of this depends on spectrum as well. If you look at the NBN implementation report, there are a few options for wireless and one was having spectrum which would provide a range of seven kilometres around the base station, and another was 14 kilometres.”

Ultimately, however, Evans sees the debate between fixed broadband and wireless as one of “capacity and future proofing”. And at the moment, wireless networks can only carry a certain amount of capacity compared to fixed networks.

“Fibre has, to our known physics, almost unlimited capacity, whereas wireless networks at this stage of our understanding have known constraints. So, in the long run, what is going to be the better solution?