Why mobile broadband is so expensive?

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MagicSquirrel

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#125699 16-Jul-2013 18:06

I've been happy with ADSL until buying a Surface Pro tablet. Tablet is great for working out of office / out of country but using it in NZ is annoyingly expensive. It looks like all mobile broadband plans are designed to be used as backup/temporarily and not as your primary internet connection. Speeds are fine but data transfer limits are really small.

As an example; Telecom offers 3GB mobile broadband plan for $49.
I'm currently visiting Finland and you can get an unlimited, full speed 3G plan for 14 EUR which is about $23.

This was first time that I found my tablet to really be a mobile device when I jumped into a car, plugged 3G dongle in and turned Xbox music on. In about 100km trip around countryside the playback cut off only twice and even then due speed drop, not because of loss of signal completely.

How come mobile broadband prices are so high in NZ? Is it due infrastructure costs or just by lack of competition in the market?

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#857564 16-Jul-2013 18:27

I had the same thoughts, I find Mobile (or even broadband in general) quite expensive and there doesn't seem to be any initiative about having a national WiFi network either, so its not as though one can just go to a local hotspot and log in via my Telco service.

Also, I find not being able to have two SIMs on the same account/connection in order to share my data allowance between devices quit limiting as well.

I see 3GB of data on BTs network is about 15ukp - I had a similar cap on my old mobile plan but it was removed and I ended up with 1GB for the same cost.

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sbiddle

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#857588 16-Jul-2013 18:37

Yes NZ's pricing isn't the cheapest in the world but it's also far from the most expensive. Our pricing actually compares pretty well with countries like the US.

The example you used for Finland is clearly a case of finding the cheapest price, because some quick searching by me now shows a number of pricing options on Sonera of around 10€ for 1GB of data as an addon - that's not too different what we have here now. You could also buy 3GB on prepaid valid for a month for 20€, once again not that different to pricing here.

At the end of the day wireless ia s finite resource and pricing should always carry a significant premiium over fixed line connections.

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#857590 16-Jul-2013 18:39

Mobile broadband has a significant difference to fixed line broadband: airwaves are limited in bandwidth and number of simultaneous connections when compared to fixed line.

A "national WiFi" network wouldn't help either because coverage from each access point is a lot smaller than a mobile cell site, and deployment costs would probably be a lot more than mobile. Also have you tried using a WiFi service these days? It's a lot more expensive than mobile.

Now, why is it that Finland can have much cheaper mobile data than New Zealand, this is another question. Perhaps because their GDP per capita is double of New Zealand, even though only 50% bigger population? The density is pretty much the same as New Zealand and area is just a bit bigger.

What about the competition? How many mobile companies there?

ahmad

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#857591 16-Jul-2013 18:39

What do you mean by finite resource Steve? Were you implying that that differs say from fixed line? Or was I reading it wrong.

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#857594 16-Jul-2013 18:49

Just read the first sentence in my reply. Airwaves are limited in how many simultaneous connections you can have, and licensing access to this costs a lot more than fixed line network access.

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#857600 16-Jul-2013 18:54

Wireless spectrum is a finite resource. It has nowhere near the capacity of a fixed line network and never will be a replacement unless the laws of physics change.

You only have to look at the congestion issues occuring with existing technologies to realise this - XT is suffering from a lot of speed related issues as of late with a lot of people complaining about speeds. Telstra's LTE is now becoming one of the worlds first LTE networks to suffer major congestion, with speeds taking a major dive as usage has grown.

Companies like Nokia Siemens are talking about planning for the ability to build networks offering 1GB per user by day by 2020. That's not now, that's 7 years away. That comment by itself probably means very little to anybody who doesn't understand the technology, but it's very significant.

1080p

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#857602 16-Jul-2013 19:00

The question is, at what capacity are these finite airwaves at most of the time?

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#857604 16-Jul-2013 19:03

1080p: The question is, at what capacity are these finite airwaves at most of the time?

Capacity of something like a 3G cellsite isn't something you can define in terms of a fixed capacity - it's an ever changing number that depends on a large number of factors.

MagicSquirrel

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#857635 16-Jul-2013 19:42

In general 3G works so well in Finland because you can see mobile network antennas almost all the time. This dates back to 90's when 2 network companies built their NMT/GSM coverage and did not allow competition to share their antennas.
As end result, all spots providing good coverage has couple of masts sitting on top as both companies installed their hardware to separate masts.

I'm not into technical details of transmitting on same frequency, but I'd imagine this would allow greater number of users to be on the area if their traffic is split in between 2 providers and not just one.

Weird thing is how such waste of hardware still causes lower broadband prices.
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#857669 16-Jul-2013 20:31

a $19/month prepay plan on 2d (and vf/telecom to I believe) will give you around 500mb of data these days. on 2degrees you can also get 12GB of add-on data for $99 and it will last up to six months.

adding it up and breaking it down on 2degrees gives you around $35/month for 2.5GB data, unlimited TXT, and 90 minutes of calling (which accrues for up to 12 month).

that's pretty reasonable really, imo.

Unlike NZ, to get international internet connectivity in finland you only need have a fibre laid over land to sweeden and Russia. That also drops the cost of providing internet.

note: a lot of people also quote cheap mobile data plans in the US - but don't realise that you cant buy them without first buying a voice plan.

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NonprayingMantis

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#857700 16-Jul-2013 21:07

NZ mobile broadband isn't really expensive by global standards.

But Finnish mobile broadband is just ridiculously cheap.

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#857701 16-Jul-2013 21:14

NonprayingMantis: NZ mobile broadband isn't really expensive by global standards.

But Finnish mobile broadband is just ridiculously cheap.

Which also raises the issue that many people forget about - the destination of the traffic. Finland is a very multilingual country because the small population means not everything is translated so people need to have a good understanding of other languages. I've been there a few times now and find most people to speak better English than most NZers.

If you look at somewhere like Japan as a comparison with such a small % of people understanding anything apart from Japanese a significant % of their internet traffic never leaves their shores.

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#857705 16-Jul-2013 21:18

freitasm: Mobile broadband has a significant difference to fixed line broadband: airwaves are limited in bandwidth and number of simultaneous connections when compared to fixed line.

A "national WiFi" network wouldn't help either because coverage from each access point is a lot smaller than a mobile cell site, and deployment costs would probably be a lot more than mobile. Also have you tried using a WiFi service these days? It's a lot more expensive than mobile.

I have not tried using one [wifi network] here because we don't have any. However, relatives use the Japanese ones and they seem to work fine. Being that the BT one appears to be free if one is a BT customer.

I don't hold with the airwaves are limited argument because it is only true of the device to the cell tower - everything from there I suspect is cable. It would be odd for a cell tower not to support a bucket load of connections at a time - if it didn't how would they cope with a stadium full of people at half time?

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NonprayingMantis

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#857714 16-Jul-2013 21:30

TwoSeven:
freitasm: Mobile broadband has a significant difference to fixed line broadband: airwaves are limited in bandwidth and number of simultaneous connections when compared to fixed line.

A "national WiFi" network wouldn't help either because coverage from each access point is a lot smaller than a mobile cell site, and deployment costs would probably be a lot more than mobile. Also have you tried using a WiFi service these days? It's a lot more expensive than mobile.

I have not tried using one [wifi network] here because we don't have any. However, relatives use the Japanese ones and they seem to work fine. Being that the BT one appears to be free if one is a BT customer.

I don't hold with the airwaves are limited argument because it is only true of the device to the cell tower - everything from there I suspect is cable. It would be odd for a cell tower not to support a bucket load of connections at a time - if it didn't how would they cope with a stadium full of people at half time?

Depends where you live

http://www.telecom.co.nz/whatsnew/freetelecomwifizone/

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#857719 16-Jul-2013 21:43

I'm currently using 2Degrees 1GB for $20 and it's serving me quite well ATM.. and also note this data will only work in 2Degrees Mobile Broadband Zones, which is gradually growing. Most of the places I've been to have worked well though.

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