Australians pay too much for NBN internet, says telco CEO

Cost of living pressures are coming for all of us, but one area Australians don’t want to skimp on is fast internet. A study commissioned late last year by local telco SpinTel found that 70% of users would “never” choose a slower speed to save money.

Based on SpinTel’s research sourced from more than 1,000 Australians, roughly a third of respondents have tried to find a better deal on NBN internet. However, download speeds are a compromise not everyone is willing to consider.

Compounding the issue is the study finding that more than a third of consumers don’t understand how internet speed is measured. Most NBN plans are advertised in megabits per second (Mbps); a higher number means faster speeds. 50Mbps is Australia’s most popular NBN download speed, capable of saving a 1GB file in under three minutes.

But many Australians pay for higher internet speeds than they need, according to SpinTel CEO Liam Bal.

“For example, a household with 1-2 people streaming, video conferencing and browsing would have a great experience and ample speed with a 50Mbps plan, yet 70% of consumers think the faster the better, and pay up to $50 per month extra for speed they don’t require.”

Paying more money for faster NBN internet

With some NBN plans providing download speeds of 100Mbps, 250Mbps and beyond, Bal believes that more people can save money by going slower, not faster. Part of this comes down to education and knowing how internet speeds work.

“Better transparency around how much internet speed is actually required for everyday activities could help customers save money and make more informed choices,” said Bal. “Most consumers don’t realise that a slower speed, at a reduced cost, can easily meet their needs while saving money.”

It echoes a sentiment similar to the ACCC’s in 2023, when the nation’s consumer watchdog cautioned telcos against selling plans surplus to customers’ needs. Based on information from the ACCC, a 50Mbps plan is enough to stream more than seven HD video streams or up to four 4K videos simultaneously.

Image: ACCC.

Less than 50% of respondents reported using the internet for videoconferencing or playing video games. Meanwhile, nearly everyone surveyed said they access social media and online shopping, which aren’t as bandwidth-intensive.

SpinTel’s study also found that 54% of unhappy internet decision-makers feel they can’t switch internet providers because they feel stuck in a contract. Many of the cheapest NBN plans are contract-free, letting customers swap freely, which Bal says should be common practice.

“Internet providers have a clear opportunity to alleviate confusion and build trust with consumers. Providing better transparency and education on what speeds are actually needed for daily activities can help customers save money and feel more confident in their choices.”

To help you compare the best internet deals, here are the current cheapest NBN plans in Australia:

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