General Question

bomyne's avatar

Why are mobile broadband plans so expensive?

Asked by bomyne (636points) June 3rd, 2014

Until recently, i was on an ADSL plan that gave me a terabyte of bandwidth for $109 a month… but i had to move to an area outside of the ADSL coverage area so my only option is mobile broadband, at which i get a measly 25GB (shaped, no overage) for $165 a month ($170 if paying by credit/debit card). I’ve done some shopping around, and this is the best plan being offered. Is this simply a case of the telcos being greedy or is there a reason why bandwidth on mobile is so expensive?

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14 Answers

elbanditoroso's avatar

Simple. Providers sell at the maximum price that they can. If there is no competition, they charge as high as they can. It’s the American way! Capitalism – the market economy – working as designed.

The selling price has absolutely nothing to do with the actual costs of the provider. It has nothing to do with anything but maximizing income.

In short, they charge prices that are through the roof, because they can get suckers to pay it.

bomyne's avatar

Surely Telstra could double or triple the quota cap and still make a bucket load of money off me, though?

I wish i could get ADSL but i’m just 5KM outside an ADSL zone :(

SQUEEKY2's avatar

Until there is a lot of competition , or some Government regulation to control these thieves they are going to charge whatever they feel they can get away with, and as long as the foolish public keeps paying they are going to keep charging.

zenvelo's avatar

Is there any competition for you to choose? Another mobile company or an alternative like cable broadband? What about a satellite downlink/cell uplink combination?

josie's avatar

Expensive compared to what. I use Broadband about as often if not more than I use my car. I would love to drive my car for $165 a month.

funkdaddy's avatar

Telstra isn’t in the US guys, so the “American way” probably isn’t the cause here.

Mobile broadband is initially carried by a different infrastructure than your DSL line. The infrastructure is newer, more expensive, and each antenna covers a lot less area than each hub for telecom. Usually they end up paying rent on favorable positions for the antenna as well, whether its the roof of a building, an existing radio tower, or a hilltop.

After the antennae then the same data has to jump on the traditional infrastructure and use that as well. So you’re paying for the fact that it’s using both services, mainly. But also that the mobile infrastructure keeps changing (2G -> 3G -> 4G are different) and that infrastructure may not have paid for itself yet.

jerv's avatar

Quick note about being “just” 5km outside of ADSLZ coverage; that’s about as far as a DSL repeater station (DSLAM) can reach. Even then, the connection starts to fade out, so it’d probably take not one, but two DSLAMs to reach you.

bomyne's avatar

@josie Expensive compared to ADSL.

@zenvelo There are three primary companies. Telstra, optus and Vodafone. These three also resell their networks to other companies (Such as Virgin Mobile uses the optus network). Telstra is the only one to offer shaping and has the highest bandwidth per month. But it’s costing a small fortune, sadly. I’m a heavy bandwidth user (lots of youtube, etc) so i can’t go for a lower plan.

I did look into Satelite.. and most companies do not offer shaping, and are even more expensive than Mobile. AU$3000 just for installation. No thanks! :(

Thing is though… Telstra does offer unmetered sites. I have unlimited downloads though Steam due to using Telstra’s steam server. Which has eased the pain a little.

@jerv The 5KM thing is a rough estimate. I’m 11KM from the nearest town, and that town supports ADSL1 (not 2 though). I have spoken to Westnet, the company that i used before i moved, but I’m just too far from the exchange (their words).

@funkdaddy Telstra’s pricing is justified then?

funkdaddy's avatar

@bomyne – you seem to be asking why the company who offers the features you want, at the best price, is so expensive… you’ve checked out other options, but they are even more expensive, or come with compromises you’re not willing to make.

I’m offering the theory that there are probably costs you’re not taking into account, including millions of up front infrastructure costs to offer the latest wireless service to an area 11km from the nearest town, that make those costs the reality of offering that service. :)

Why are Lotus cars so expensive? I know there are cheaper options, but they’re not everything I want in a car. These Lotus guys must be up to no good, the greedy bastards with their claims of innovation and craftsmanship. I know they’re just simplifying and adding lightness. I’d like luxuries, and I like them on my budget please.

Broadband wireless internet with high data caps isn’t exactly a necessity.

jerv's avatar

@bomyne Many telcos won’t accept ADSL orders past 15000 cable-feet from their nearest DSLAM, and 18000 feet is pretty much a hard limit to get something faster than dial-up. In practical terms, since cables zigzag, the limit is generally less than 2 miles (3–4 km) depending on their equipment.

FYI, my wife does a lot of YouTube, I game, and our roommate is constantly downloading Linux packages, yet we average about 16 GB/month. Unless you constantly watch HD video, 25 GB should suffice. HD video will eat that 25 GB up though, especially 1080HD.

bomyne's avatar

@funkdaddy I have actually asked that question before. A top of the line Nissan Pulsar is only about… 30 thousand I think. Why is BMW, Ford, Holden, etc way more expensive for their base models?!

I get what you are saying about there being costs to the Telco that i do not know about. That’s why i posted the question in the first place.

We don’t have the latest out here, sadly. We are in a 3G, not 4G, zone.

@jerv I don’t watch 1080p videos but i do watch a lot of 720p youtube. And i enjoy a bit of gaming (World of Warcraft). WoW is actually the least of my worries when it comes to bandwidth. I enjoy trying new games, especially MMOs. When i used ADSL, i used to average 200GB a month on youtube and games downloads.

I’d also love to Skype my girlfriend but i know that’d kill my bandwidth faster than HD youtube.

Yeah, it’s unfortunate about the distance but they are unlikely to do anything about the situation for ADSL/cable out here because there aren’t enough people to worry about it. That’s why I’m forced to rely on mobile.

Off topic but are the “Great Answer” buttons working for anyone else? Nothing happens when i click them.

jerv's avatar

Compared to regular (480p) TV-quality, 720p uses ~267% as much bandwidth for the same framerate. For 1080p, it’s 600%. Ponder that for a moment.

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