More than three-quarters of Australians want ultra-fast internet speeds of one Gbps, contrary to claims by NBN Co’s CEO, according to new research.
NBN chief Bill Morrow said in February there “isn’t that big a demand” for one gigabit per second (Gbps) internet speeds.
But the Galaxy research, conducted earlier this month, found that 76 per cent of Australian internet users are demanding access to “ultra-fast” speeds of at least one Gbps.
Two-thirds believe it would have a positive effect on both their work life and leisure time.
Singapore startup MyRepublic, the company that commissioned the Galaxy study, has serviced the town of Wollongong with one Gbps speeds free of charge for 12 months to raise awareness of the benefits of these high speeds.
One Wollongong resident, Fletcher Thompson, reported the ultra-fast speeds as being “absolutely seamless”.
“We’ve been testing it out as much as we can and I keep trying to find things big enough to download that are going to take more than a few seconds,” he said.
“It would be really helpful to know that affordable Gbps network access is available everywhere. It would be great to see one Gbps speeds roll out across the country.”
The fastest speeds offered by most Australian telecommunications service providers are up to 100 Mbps — one-tenth of the speed.
Numerous service providers and industry experts have partly attributed this to NBN Co’s wholesale pricing model being too costly for retailers, providing them no incentive to offer faster speeds.
This week Mr Morrow said NBN Co was in the process of reviewing its pricing model and service providers last month had the opportunity to lodge submissions with suggestions as to how the pricing structure could be improved.
MyRepublic Australia-NZ managing director Nicholas Demos told The New Daily that 30 to 40 per cent of his new orders in New Zealand are for Gbps speeds priced at $130.
“At the moment, if Australians were to have access to one Gbps speeds it would need to be priced at around $300-plus and that’s just wrong,” he said.
“In our experience the sweet spot – a fair price – that we expect Australian consumers would be prepared to pay is between $100 to $150.”
Industry experts ‘unsurprised’ by Gbps demand
Former NBN Co chief executive Michael Quigley, now a University of Technology Sydney adjunct professor in telecommunications, said the Gbps demand in Australia was consistent with that overseas.
“People know that the broadband speeds that were adequate five years ago are not adequate today and so it is not surprising that they are keen to get a broadband service that will take them into the future,” Mr Quigley told The New Daily.
“An NBN based on the use of fibre-to-the-node (FTTN) technology and the old copper network is always going to be struggling to meet speed demands.
“So it is understandable that people are going to be reluctant to pay a higher price for an NBN service than for their current ADSL service if the FTTN network cannot provide predictable and consistent speeds.”
University of Western Australia’s David Glance, director of the Centre for Software Practice, said the research showed NBN Co and service providers were “not doing a good enough job of explaining the product they are selling”.
“The product is underpowered, subject to a variety of possible breaks and consequently people are getting an overpriced and inadequate product,” he said.
An NBN Co representative said 82 per cent of NBN-connected premises are currently ordering either 12/1Mbps or 25/5Mbps services from their retailers.
“We are building an NBN network that cannot only deliver the speeds required for today but that can also be upgraded to deliver ultra-fast speeds should end-users demand require it,” he said.
Other key research findings
The Galaxy research also revealed 59 per cent of NBN internet users were dissatisfied with the speed of their home internet connection.
Two-thirds of those connected to the NBN reported that their internet at home was insufficient for business purposes.
As many as 85 per cent of Australians said they believed they should pay no more than what New Zealanders were paying for high-speed internet, with 99 per cent believing it would be unfair to pay more than $200 per month for one Gbps speeds.