Primus and iiNet announce terabyte download plans as pre-NBN battle for market share heats up

Moves by iiNet and Primus to offer new internet plans with one terabyte of downloads per month are designed to help the companies win market share ahead of the construction of the National Broadband Network, one analyst claims.

The plans also come as analysts claim telcos are now moving towards American-style unlimited plans, whereby users have no restrictions on how much they can download. This is in contrast to the current market, where smartphone users still often suffer “bill shock” after incurring high charges for downloads above their allowances.

Telsyte research director Foad Fadaghi says the decisions are part of a plan to gain market share and popularity ahead of the NBN.

“It’s all going to be about market share going into the National Broadband Network. Once you’re able to switch over to that network, there are going to be all sorts of offers, and if you stay small you’re going to get lost in the wash. It’s all about scale.”

iiNet was the first to announce a terabyte plan, or one thousand gigabytes of downloads, yesterday afternoon. Managing director Michael Malone said in a statement the plan was developed in answer to customers’ desire for digital delivery of music, movies and television shows via platforms like the iTunes Store.

“Today we continue to lead the market with our latest innovation – Australia’s first one terabyte plan. It’s backed up by the best customer service, our high performance network and a reputation for delivering. This isn’t about big plans, it’s about sustainable plans.”

The company is also updating its existing plans. The 1TB plan will cost $119.95 on a Naked DSL plan, or $99.95 in an ADSL2+ bundled deal.

The company’s announcement was carefully monitored by the Australian Federation Against Copyright Theft, which is currently pursuing legal action against iiNet for allegedly allowing the copyright infringements of its users.

A spokesperson told Fairfax that iiNet should be careful “to ensure it did not become the home of copyright infringement”.

Primus quickly followed iiNet’s announcement, saying it would be offering a 1.1TB plan, and actually said this was prompted by the large take-up of its NBN services in Tasmania.

The plan will cost $99.95 per month on a 24-month contract, and the deal is also available via NakedDSL for $119.95.

Fadaghi says the Australian telco industry is heading towards unlimited plans, where users are given as much data as they want every month with no extra usage charges. These types of plans are popular in the United States.

“We are edging towards unlimited-style plans. I think the big ‘one terabyte of download’ numbers are more PR than anything. Although it would be unusual for someone to actually use all of that in a day, I think we are edging closer and closer to unlimited plans. Then I think the bigger players, like Optus, will fall into line as well.”

Optus has recently been scolded by the Australian Competition and Consumer Commission, however, for advertising a plan as “unlimited” when actually users have their download speeds capped over a certain amount.

These analysts say “real” unlimited plans will allow users to download as much as they want at their plan’s normal speed.

But Ovum research director David Kennedy disagrees. He believes there will always be a connection between usage and price.

“The issue is how they’re going to manage this. The bigger the cap, the higher the price they’re going to charge. I think the question is whether they’ve set the price at a level that would support an extra demand.”

But while some users may scratch their heads as to how you could use a terabyte of downloads per month, Kennedy says these types of downloads will appeal to a certain segment of the market.

“This isn’t just illegal downloads. I know someone who is an animation student, and she downloads and uploads videos constantly. This type of plan would be ideal for someone in that type of situation.”