iiNet massively undercuts Internode’s NBN plans


news National broadband provider iiNet this morning released its highly anticipated National Broadband Network pricing, undercutting plans released by arch-rival Internode by as much as half in some areas.

iiNet’s plans start at $49.95 per month for a plan with 20GB of on-peak and 20GB of off-peak (2AM-8AM) data and entry level speeds of 12Mbps down and 1Mbps up. When you include a $9.95 monthly charge for access to the company’s internet telephony line, iiNet’s entry-level plans are not too dissimilar from Internode’s pricing released last month.

However, as the pricing plans scale up, a radical difference between the pricing plans of the two companies becomes apparent, with Internode’s highest plan (coming with a terabyte of data and 100Mbps speeds) costing $189.95 per month and iiNet charging just $99.95 for the same (with 500GB of on-peak and 500GB of off-peak data).

Across the board, regarding the plans in between the two extremes, iiNet’s plans are generally drastically cheaper than Internode’s plans and are more in line with plans released by smaller broadband competitor Exetel in late July.

The plan release does much to verify comments by iiNet chief executive Michael Malone in mid-August that the cost of connecting customers to the NBN was similar to that of existing ADSL broadband services. The statement puts iiNet at odds with Internode, which has consistently criticised NBN Co’s pricing scheme, arguing it would not allow smaller ISPs to compete nationally.

After what appeared to be lengthy talks on the matter, NBN Co sought to address the concerns in mid-August by offering ISPs a rebate on the CVC links which provision traffic to end user customers’ premises on the NBN. ISPs won’t have to pay the CVC charges on the first 150Mbps per month served through the CVC connection until there are 30,000 premises passed in an area connected to one of its planned 121 point of interconnect.

At the time, Internode MD Simon Hackett welcomed the rebate, but noted Internode’s NBN pricing would not change as a result of the deal.

Today, Malone said iiNet had “long recognised” the power of the NBN’s planned ubiquituous, open access network to transform its business. “The NBN allows us to deliver what we have always stood for: faster, more reliable broadband for less,” he said in a statement.

“iiNet is particularly excited that the roll-out of NBN is focused on regions traditionally burdened with slower speeds and higher prices. Without the need for a fixed phone line, the customers on our most popular ADSL1 plan can move to NBN speeds and enjoy ten times the quota for the same price they’re paying now. With standard off-net access charges offered by NBNCo 40 per cent less than currently available in regional areas, we can pass substantial savings on to our customers.”

iiNet also released business-focused plans for the NBN today, which offer customers very similar tiered pricing options to the consumer-focused plans detailed above; but with slightly higher prices ranging up to $129.95 per month and a number of business-focused features such as specialised support and a static IP address.

All of iiNet’s plans will see customers’ speeds on the NBN shaped to 256kbps down and 256kbps up (512/512 for business customers) once their quotas are exhausted.

Image credit: iiNet, Delimiter


    • I can see why lol

      From a previous article:

      Mr Turnbull cited two examples which, he said, demonstrated that price modelling conducted by NBN Co was “utterly wrong”. In the first, he said NBN Co had estimated a 12Mbps plan would cost between $53 and $58 a month with a 50GB quota.

      For two measly dollars more you can get a 100gb + 100gb 12mbps plan. Over to you Turnbull.

      • or the other way – 20+20 @ 25/5 for $54.95 – only 5gb diff for peak and off periods, so its pretty close to his ’50Gb’ mark. at that kind of price i could see some good takeup of 25/5 services – something Malcolm doesnt seem to believe will happen?

        yeah i dont think hes going to be a happy chappy.

        • I just noticed Turnbull was talking about 25mbps plans too:

          Mr Turnbull said NBN Co had estimated that a 25Mbps plan would cost between $62 and $68 with a 200GB quota.

          $65 is pretty much right between $62 and $68.

          More for the lolz:

          “These serious gaps in the NBN business model will prove costly to taxpayers and more importantly, to internet users who may not be able to afford the hikes,” the Liberal MP said. “As I have said repeatedly, the main barrier to the internet is not distance but cost


  1. This shouldn’t come as a surprise to anyone. The NBN plans and prices offered by most companies will most closely resemble… the plans that are currently offered by those companies!

    I’m a long time iiNet customer, and on the basis of these plans I have no immediate need to change providers. And that, of course, is pretty much the point. Most RSPs will resort to same-or-better pricing to migrate customers across, precisely because they don’t want to lose their customers to the churn that would result from an abrupt price hike.

    And showing once again, the depth and futility of the FUD that has been spread around by the Australian, and by its political wing, the Liberal Party.

      • Affordable pricing does not mean cheaper pricing. Where precisely did this misconception originate?

        • Fair point. Affordable indeed does not mean cheaper. However those who cannot afford it now will most likely not be able to afford it in the future, so will continue to miss out on the benefits.

      • The claim that the primary or chief purpose of the NBN was to make internet access more affordable, ie cheaper, (as has been claimed by Malcolm Turnbull at various times) is a bit of goalpost-shifting, and is fundamentally not correct.

        If your chief policy was only to lower the PRICE of internet access, then you would go about that a number of ways. You could subsidise the entire market, or you could go about by a more targeted approach and offer specific subsidies to people on low incomes. That’s if you only cared about cheaper prices, and left the physical network as it now is.

        But none of that would address the two real problems the NBN was designed to address: (1) the abysmal level of service available to many people, especially those located on urban fringes and in regional and rural areas, and (2) dissolve the Telstra vertically integrated monopoly, which has frustrated all attempts at fair and reasonable competition (and pricing competitiveness).

        What WILL be the result from the NBN is that everyone will be able to get a significantly better level of service (measured in speeds, reliability etc) for either the same or less that they are paying now.

        A key difference with the NBN is that phone and broadband services will almost always be offered together – whereas many people now consider them separate costs, and leave out their landline phone monthly costs when making a direct comparison.

        Some customers will want a top-end service, and are quite willing to pay more to get it (and it will not be much more). When there is an inexpensive entry-level service (with healthy, open competition at this level), it’s perfectly acceptable to charge more for a premium level service for those who want or need it.

        The NBN will mean better services for what you pay. That much is clear. That there will be a “digital underclass” is a separate question, which must be addressed in a far broader manner. For example, if people don’t have stable housing, access to basic living services, or even own a computer or device capable of accessing the internet, then the cheapest broadband prices in the world still won’t give them access.

        • Actually, it’s not incorrect. Julia did proclaim it would be cheaper. I’m not putting any weight on the Liberal party position because a lot of what they say is rubbish. But please, tell me if this is incorrect. The rest of your post is valid, but that’s not the point I was making.

    • It’s exactly the same as the current iiNet regime for ADSL customers, so there’s absolutely no change or surprise!

        • Fair enough. But the point is that they have kept most of the attributes of their own current ADSL plan without changing very much at all.

          The only truly new feature is the ability to select download/upload speeds à la carte, rather than crossing your fingers and hoping for the best you get (over copper).

          • This is pretty much how I feel about it also — I’ll be paying about the same with iiNet under the NBN as I currently do now — but with vastly improved speeds and probably a better quota bundled in. Win :)

          • Do you think they will be able to supply decent speeds at that price? Sure, 100Mb/s is like saying my ADSL2+ sync is 16Mb/s. But do they have the network to supply it? When I was on iiNet international speeds were dropping lower and lower and they switched accross more of their assimilated customers.

          • @Dbremner

            The question “will they be able to supply decent speeds” is one that has a lot of variables and moving parts. You will get a very different answer if you compare (a) the download speed from a single very remote overseas server with (b) speeds of multiple downloads from domestic servers – where the total aggregate speed could easily reach >90Mbps on a 100Mbps plan.

            That said, even with the best of all possible internet providers the possibility exists that too many simultaneous users can cause slowdowns. That’s nothing to do with the NBN, or with any other delivery system yet invented. It is inherent with the design of the network. The question “will cheapo provider X have enough international or domestic backhaul capacity” is a perfectly good one, but it can only be answered over time, depending on the market.

          • International speeds over what, TCP? Well of course you will see a performance drop, that is inherit in the protocol.

            Do you mean to say you say the performance got worse over time, i.e. completing the same task with the same server would take longer? Well that’s grounds for complaint and dealing with the TIO. If a provider is not willing to provide enough international capacity to service their customers they deserve what is coming for them.

          • btw from iiNet’s NBN faq

            Will there be enough bandwidth for everyone when the NBN rollout is complete?

            We’ve already starting making plans to ensure there will be enough bandwidth to support our NBN customers. We’ve already formed a key partnership with PIPE Networks which will give us access to more bandwidth via its Guam network cable.

          • @Gwyntaglaw
            I am not just talking international. Even Melbourne to Sydney can be an issue with some ISPs.
            TIO does not do anything about bandwidth. It wasn’t super drastic, but since it was within a 2 month period the difference between 3 ISPs was VERY apparent in the evenings. I had several regular OS sites I would watch streaming video from of an evening. With same PC, router, phone line, etc.
            Netspace, nothing flash, 720p was about the max you could view, that became a little choppy of an evening.
            iiNet, of an evening would be lucky to able to watch 240p
            Internode, can watch 1080p at any time with no issues.
            Same sync speed to the exchange, just different ISPs providing the link to the international sites. (Some US, some Korean, some China, some Europe)

          • @HubertCumberdale256
            You really expect any ISP to say they won’t or haven’t provisioned enough bandwidth? The last ISP who admitted that was Stuart from Netspace in the days of dialup. Oh, and Vodaphone after they denied it for 12 months and we basically forced to admit it in the end.

          • You really expect any ISP to say they won’t or haven’t provisioned enough bandwidth?

            I was merely highlighting what they are planning. Do you believe they are lying about this PIPE deal?

          • @HubertCumberdale256
            No, I don’t think they are lying. They are a company however. If they make a mistake in estimating how much backhaul they need they aren’t just going to increase it. They will charge the customer more (as Internode did when they underestimated naked plan usage) or just leave it as is. They are not going to wear the cost. I’d also hate to be the ISP with the lowest prices and biggest quota. You can guess that’s where all the “Hey I downloaded 2TB this month, isn’t my manhood huge?” guys will be heading.

    • true, i’m currently with node paying $70 I think for 150Gb, iiNet’s 100/100 is 25 or 50 Mbps is very attractive compared to what I’m currently paying. (Although my uploads are not counted with what I have with Node on adsl2)

      • I’m currently node, same plan with the option pack to. iinet’s plans for fibre are mad, and I have no hesitation jumping ship if node don’t step up. Years away for fibre to my home but it’s nice to dream.
        Uploads will be counted on all fibre plans on all ISPs without a doubt

  2. I currently pay $129.95 for the 500gb/500gb plan with iiNet. So for me this is great, if only I could get the cable laid in my area sometime soon.

    Oh, and welcome back Renai.

  3. I’d love to see a 10mbs plan completely unmetered. Take a small pipe and then all you can eat. Means teleco’s could plan on ~100 services of 1gig line and not have to worry too much about congestion until it hits the exchange. The “download limit” is just a cludgy mechanic to address the real problem of peak usage anyway. Could be wrong, but I’m pretty certain carriers charge each other on pipe size not throughput; so run that all the way to the consumer.

  4. Don’t know if anyone’s seen Joshua Gans’s ridiculous tweet (@joshgans) of earlier today:

    “iinet’s NBN plans. $70 for 100Mbps with 20GB. That is 10 minutes of 100Mbps per month and you are done. What a joke”

    Aside from the fact that the maths is plumb wrong (10 minutes at 100Mbps non-stop works out at around 7.5GB, not 20GB), the thinking is utterly misconceived.

    Gans is suggesting that all you just have to gingerly turn on your computer, and 10 minutes later all your data allowance is gone. Just like that. Without even knowing about it.

    No conception of the idea that if you do start downloading 7 or 10 or 20GB of data straightaway on such a plan, then it’s not a SPEED problem that you have – it’s a DATA allowance problem.

    Gans is also cherry-picking the least attractive plan (and least likely plan to be chosen), as the data quota is indeed quite meagre. But you only have to go up by fairly modest increments ($10 and then $20) to get to much bigger quotas – which is obviously the direction that most people would go on the top speed.

    Remind me again: this guy’s a professor?

  5. The title should read “iiNet undercuts internode pricing with terrible contention ratio”.

    I know i’m a broken record on this but comparing pricing is like talking about religion.

    Its utterly moot unless you know for certain what the contention ratio is.

    • iiNet undercuts internode pricing with terrible contention ratio

      How do you know they’ll have a terrible contention ratio?

  6. Find iinets pricing (seeing bundled with phone) to be good value… currently with Telstra and even with bundling costs $75 for 20gb with phone (but use voip to make calls) ..bring on the NBN :)

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