The super-speedy new National Broadband Network (NBN) is sloooowly inching closer.
But it’s not just digital junkies who’ll benefit from the multitude of megabits; their pushers can also expect a new lease on life.
Internet Service Providers (ISP), that is.
Comparison site WhistleOut recently analysed price plans announced by ISPs for the brave new NBN world. They found that, so far, charges are comparable to ADSL.
What’s more, in some instances they work out cheaper in terms of what you pocket in speed and Gigabyte.
According to WhistleOut director, Cameron Craig, there are five tactics savvy consumers need to keep an eye out for if they’re going to secure themselves the Best. Deal. Ever from their ISP.
1. Exclusive Content
The more exclusive the content, the likelier consumers will be willing to pay a premium. Smart bods Telstra know this; they’re signing up the digital rights for full online replays of Australia’s favourite sports (AFL and the NRL soon).
Meanwhile, Vodafone has exclusive rights for cricket on mobiles, and will likely be looking to be cover off all internet access rights for the future.
“From a business point of view, exclusive content is great, you can charge a price premium for it. But what does this mean for consumers? Missing out on favourite sporting events?” Craig asks.
2. TV / Internet Protocol TV (IPTV) / Entertainment
“When it starts to get traction here, IPTV (TV streamed through the internet), will be huge,” Craig says.
“CNN, BBC, MTV all via the internet, directly to your TV. Right now, it is embryonic, but will grow quickly when the NBN backbone is in place.”
In the US, web video already accounts for a cool 37% of internet traffic thanks to the likes of Netflix and YouTube.
“By 2020… you could easily imagine video and TV on demand could be well over 50% of the NBN use. Fetch TV / IPTV / Internet Foxtel bundles will be a massive point of customer competition.”
3. Multi Product Bundling
Craig’s crystal ball shows a future full of quadruple bundles. Think mobile phone, broadband, wireless broadband, and IPTV. The strategic advantage for an ISP with its very own mobile phone subscriber base will be to bundle and offer reduced prices on your broadband plan.
According to Craig: “Standalone broadband providers will struggle to match these price points without margin pressure.”
“Those ISPs that can bundle can make a combined margin from a customer, whereas a standalone provider can only make a margin on the broadband plan and needs a price point that gives a margin to survive.”
4) Price Competition
“Another option for ISPs on the NBN (which many will be forced into) will be to simply go bargain basement and offer rock bottom prices, just as TPG/Dodo and others already do now, and then try to make money in other ways.”
But it’s not all super savings and smashing service, Craig says. As with their cheap-n-cheerful ADSL counterparts, users may suffer ‘contention issues’. High volume equals sluggish speed when ISPs fail to invest in increasing capacity.
5) Service and Incentives
“Customer service, service quality and other incentives will be another differentiating feature on the NBN as ISPs vie for customers.”
For example, Craig says Optus’ NBN plans are priced with a watchful eye on the likes of iiNet. They will protect their margin (Optus are no bargain basement fans) while bigging up their strengths, like good market share in mobile phones and bundling.
That way, Craig says, “they recoup across the two products, whilst appearing cheaper than iiNet.”
You can compare current NBN prices on WhistleOut.
