Friday, 08 March 2019 12:12

Australia 7th most affordable for broadband, NBN Co claims Featured

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Australia 7th most affordable for broadband, NBN Co claims Image by TONY-PHOTOS on Pixabay

A study carried out by AlphaBeta for NBN Co, the company rolling out Australia's national broadband network, has found that this country is the seventh most affordable market for broadband.

The company said in a blog post that the study looked at 4578 broadband plans from 22 countries and found Australia to be the seventh most affordable market based on the average price of broadband as a share of household income.

It said the study also found that Australian telecommunications prices had fallen since 2000, with a significant drop in the last five years.

Outlining the methodology adopted to come up with these results, NBN Co said: "Previous studies have attempted to provide like-for-like comparisons by looking only at plans with similar features, and comparing these internationally. However, this method means that only a limited selection of plans can be studied.

"Instead, we use a statistical modelling technique called regression to calculate the value of features and inclusions like TV channels, mobile data and commitment periods.

"According to our analysis, the inclusion of 124 TV channels adds $17.38 to the monthly cost of a broadband bundle while the inclusion of 50GB of mobile data adds $11.20 to the bundle’s cost. By calculating and subtracting these costs from bundle prices, we were able to determine a 'naked' broadband price for most plans in our dataset."

When comparing prices across countries, NBN Co said AlphaBeta looked at affordability, not price comparisons in a common currency.

"To provide a true measure of affordability, AlphaBeta compared broadband prices to household income. This avoids what is known in economics as the Balassa-Samuelson effect, which is the tendency for consumer prices to be systematically higher in richer countries," the company said.

"Australia has the seventh most affordable broadband of 22 countries, based on AlphaBeta’s affordability comparison."

The AlphaBeta study also looked at whether broadband was affordable for Australians and concluded that it was.

"We looked at the Australian Bureau of Statistics’ Consumer Price Index, which tracks various categories of prices in the country, including telecommunications (including broadband), electricity, food, housing and healthcare costs," NBN Co said.

"Since 2000, Australia’s CPI – which is a measure of the cost of living – has risen 63%, while telecommunications prices fell 6%. This was mostly due to a steep fall in the last five years. Meanwhile, since 2000, the price of electricity has more than tripled, the price of health has increased 134%, rent is up 79% and the cost of food has increased 63%."

It said the findings indicated that Australian broadband was affordable relative to other goods and services, and was becoming even more so as telecommunications prices fell.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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