Exetel’s NBN pricing: Cheap as chips


National ISP Exetel today outlined projected pricing on its National Broadband Network plans in Tasmania that was radically different from that offered on traditional ADSL broadband plans — such as a zero cost monthly plan at 25Mbps, with downloads charged at $1 per gigabyte.

“Subject to signing contracts, we would expect to offer 25Mbps circuits for $0.00 monthly access and $1.00 per GB downloaded on a 12 month contract,” the ISP’s chief executive John Linton said in an emailed statement. “50Mbps and 100Mbps services have yet to be priced but are expected to be $15.00/$25.00 per month plus $1.00 per GB downloaded.

However, Linton said as the NBN was the broadband market “starting again”, Exetel would not be interested in providing services to “heavy downloaders” — noting those users were subsidised by the broadband prices paid for the “over 60 percent of the market” that were characterised as “low usage” downloaders.

The ISP in late March pledged to join Internode, iiNet and Primus in seeking accreditation to resell fibre broadband services provided by the Tasmanian division of NBN Co in early stage rollout communities of Smithton, Scottsdale and Midway Point.

But it has taken quite a while for Exetel to negotiate contracts with NBN Tasmania to provide services to the areas. Linton said Exetel wouldn’t announce final pricing until the NBN Tasmania contracts were executed — “hopefully by the end of this week”.

The Exetel pricing is dramatically different from projected Tasmanian NBN pricing outlined by iiNet in mid-March, when the company said its NBN pricing would not be materially different from fibre prices in greenfield estates like the Alamanda Estate in Point Cook in Victoria.

iiNet’s cheapest current fibre plan goes for $49.95 per month, for 5Gb of on-peak and 5GB of off-peak data at download speeds of 25Mbps. Under Exetel’s projected prices revealed today, that same speed and download limit would go for $10.

However, when you get to the high end, the situation changes quite a bit. For example, for the full 100Mbps fibre speeds, iiNet is currently charging at least $129.95 for a combined 120GB of data — 60GB on-peak and 60Gb off-peak.

For the same download limit under the projected NBN plans, Exetel would charge $25 monthly access fee plus $120 for the data — for a total of $145.

Linton today said there were some cost challenges in Tasmania because of the need to pay for Bass Strait backhaul data haulage back to the mainlaind — which he said was “for us, very expensive (even at one third of the old pricing)”. Competition for data transit across Bass Strait has recently been introduced through the Basslink cable.

“Because of the Bass Strait backhaul, IP (internet protocol) is effectively five times more expensive than it is in Victoria/other mainland states – which constrains what can be done in the short term in Tasmania (at least by us),” said Linton.

However, he noted the NBN, if it was rolled out quickly, provided a chance for companies of Exetel’s size (smaller than providers such as iiNet, Telstra, Optus, TPG, Primus or Internode), to offer faster broadband in Tasmania at a much more affordable pricing than it could otherwise do.

Point Cook and customer service
Separately, in a letter to customers this morning, Exetel noted it also expected to shortly execute contracts with Telstra to supply fibre services to Point Cook residents and had recently completed upgrades to its network in NSW and Queensland, with Melbourne upgrades to be finished by May 4 and the ACT, SA and WA to receive the same by May 12.

Exetel has almost doubled the bandwidth it deploys to provide residential customer services over the past twelve months,” the letter said. “Once we complete the current ‘round’ of upgrades we will begin again.”

“Over the coming year we will build a ‘second’ network to make the current network, which is already totally redundant even more resilient with a third level of back up to the second level of back up that is already in place. We will also move away from the current topology of 1 gigabit links by replacing all of the current routers and switches with 10 gigabit hardware and ingress/egress circuits.”

The ISP has also recently released a new round of ‘unlimited’ ADSL broadband plans, and in its newsletter went some way to outlining the performance of its Sri Lankan division, saying all calls to the division were answered within an average of less than 60 seconds.

“Obviously we don’t know for certain but it is unlikely that ANY other ISP in Australia has ever achieved this speed and consistency of response,” said the newsletter. “Of course there are times when there are ‘peaks’ but these seldom cause a call wait time to exceed 3 minutes.”

“The second goal is to resolve all non-carrier related issues on the first telephone call. This is an even tougher objective and is dependent on a much higher level of knowledge of all aspects of ADSL services in Australia than is currently possible to provide.”

In addition, the company said it has executed contracts for all of the endangered species projects it will support as a company this year — it will pay out almost $550,000 in donations.

Image credit: Mark, royalty free


  1. The problem is that people are trying to leverage current pricing models into a completely new way of thinking. Per Gb charges will bankrupt people if they can download at up to 100Mbps

    Once again we are giving people the keys to a Ferrari and telling them to reverse out of the driveway at full speed then walk to their destination.

    • I dunno Wolf, I think Exetel’s pricing models look pretty good. If you take the average user, who might download something like 10gb a month max, they could pay something like $10 a month for a fibre connection under Exetel’s ideas. Sounds pretty fantastic to me.

      I do take your point about Ferraris and so on. And users like me (being an early technology adopter) will definitely want to use the NBN fibre to its full potential. But a lot of people simply won’t — perhaps most people — and that’s the market Exetel are clearly going for here.

      Kudos to John Linton for some outside the box thinking.

      • @renai “I dunno Wolf, I think Exetel’s pricing models look pretty good.”

        I have real concern for the quality of the service you would receive, it would appear to me that Exetel would find it difficult to forward plan the capacity required in their network if the subscriber does not provide the indication.

        I believe the better indicators for users network utilisation for capacity planning today is quota and not link speeds. I am genuinely interested in how they would address it, maybe they are relying on competitors offering more cost effective plans than 1$/GB for 100GB. Therefore assuming high users will not use their service.

        Another idea I have pondered is a monthly service fee that provides access to a network and determines the access speeds/conditions etc. coupled with a prepaid data allowance. When you have expended all your data perhaps you have severely shaped data access that you might be able to use like when shaped on ADSL now.

        But you can buy prepaid data allowances to be used at full access speeds, this might allow a provider to capacity plan based on current allocated data allowances across the network. Although this also presents a problem is so much as it decouples the time period it is to be used within unless they only last 30days from time activated or something.

        It will be interesting to see how the NBN changes the plans offered to consumers, especially if it truly does break the current rules that we have to play by thanks to the incumbent.

        It is great to see a new approach though, hopefully it does work for them.

        This could be enough

  2. Why is it 1/gb that is still way too expensive. The NBN will no doubt allow every user to increase there consumption of data YET your capping us to the old world data consumption rates..

    It’s stupid to think that poeples consumption will stay the same. I guarantee you that once we can download dvd size files in minutes we’ll increase our consumption. Especially with services like Xbox Live.

    NBN is redundant if it means we pay the same price for the same amount of download!!! (even if it comes down to us quicker).. complete wrought if you ask me!!!

    • Hmm I agree with you Jose about increasing our data consumption — but that’s in the medium to long term, not in the short term. If you look at the short term, what is likely to happen is that most users are not likely to download much more at all under the NBN. And so John Linton’s pricing plans simply reflect that reality and do not pander to the early adopter crowd.

  3. /me cheers!

    $1/Gb is high, but it leads us in the correct direction – USER PAYS NO FREE RIDES.

    One day we may get to scaling user pays: $1/G first 20G $0.5/G next 20G, $0.2 after that (or whatever eventually merging with wholesale prices)

    The current BS of discourage use via harsh $ penalties for over use or speed limiting. It all leads to customer dissatisfaction. Why not encourage users to … use. I don’t want to buy another XGb chunk – I just want to download this one file this month, with the knowledge that I’m not going to get shafted for it.

    Keep it clean and transparent, keep the bean counters well away from it all so consumers don’t feel like they’re getting cleverly shafted for not paying attention.

    I too have downloaded a large file at the end of the month, ‘just cause I’ve payed for it anyway’, it’s all pntless BS.

    People spend more when they feel good about it, it’s proven fact.

    • Yeah I’m all for user pays scaling as well — it would avoid any speed limiting situations. The problem is the setup we have at the moment has resulted from two factors — ISPs doing well out of users not using their full quota which they have paid for every month, and the massive tantrum the media throws whenever some uninfomed user goes over their limit and has a $200 bill. Shaping #fail.

  4. This is what John C Dvorak has been saying for at least 2 years – metered internet, just like water, power & gas. Bandwidth is not unlimited and should be charged as such. And heavy users (such as myself) should not be subsidised by the low-usage “mums & dads”.

  5. Y’know, Australia and New Zealand are the only (or at most, AMONG THE FEW) countries in the world where broadband quotas exist. As a new migrant to Oz, I can say this for a fact. Where I came from, broadband is priced according to speed, with unlimited data downloads/uploads. Many an European and Asian fellow-students I’ve come across were infuriarated when they first encountered this “quota system” when they first arrived here.

    So I do disagree with some of the comments posted before this.

    Ozzies have become so accustomed to data quotas and caps that they no longer question why it’s being imposed. Corporates in other countries provide unlimited downloads/uploads at reasonable, affordable prices…why isn’t it done here? The answer is simple…the industry continues to collude to take advantage of this weakness/ignorance amongst us Ozzie consumers. And then you have Ozzies spouting the “limited bandwidth should be metered etc” line as gospel truth.

    It’s a sad, sad situation.

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