A few months ago I got a jubilant letter in the mail advising that my new apartment was now National Broadband Network (NBN) ready. This letter had followed months of letters advising me to ‘register early’ to get the NBN as early as possible. Then it was followed by more pamphlets from different companies.
Honestly, it is enough to make a non-tech head like me go crazy! Which plan and is NBN worth it? Here I share some of my experiences to see if it might help others out there negotiating the crazy space.
- There are questions about NBN being all it is cracked up to be. The Prime Minister admits that the NBN is not commercially viable. Telstra is compensating around 42,000 customers because they didn’t get the speeds they were promised, and Optus has also announced it will refund some customers. That said there are signs that retailers are starting to provide more speed to customers.
- I went with NBN. It works fine. It hasn’t revolutionalised my life the way that pre-federal election TV ads promised it would. I haven’t noticed any difference in speeds or service or reliability. But for my basic needs, it works.
- I could have stayed with ADSL. I only moved to my apartment around five months before I got the NBN notice. My apartment is close (less than one kilometre) to the telephone exchange, and therefore my internet speed was actually not too bad. The closer to the exchange, the faster your internet speed, if more than two kilometres it starts to degrade quickly.
- It is not true that you will only have twelve months to switch off ADSL after you get your letter. Your telco may tell you that remaining on an existing ADSL plan is not an option after twelve months because everything will eventually move to NBN anyway. But my friend Giulia, frugalista, investor and food blogger at Love at Every Bite, told me that this is not strictly true. With houses that are FTTN (Fibre To The Node, i.e. existing phone line copper cable between the house to the Node on the street and then Optical Fibre from the Node to the Exchange). Therefore the infrastructure will still exist and services will still be available. Even if your service will be cut off you don’t have to act right away, but in my case, I figured I had better do it before I forgot and before life moved on. There is not, however, a major hurry and you have the leisure of time to negotiate a good NBN deal.
- Your telco will try to charge you break fees if you move to NBN. My telco (iiNet) tried to charge me a break fee when I left ADSL to move to NBN. And even though they sent me a letter advising no connection fee because I was an existing customer, they still tried to make me pay the fee. Dudes, you told me (probably incorrectly) that ADSL is going to be redundant in my area before the contract expires – if you don’t intend to complete your side of the contract don’t charge me fees! After some negotiation, both the break cost and the installation fee was waived. But if like me you haven’t had your existing internet contract for long, contract break costs are a very real factor you need to consider especially if you want to go to another provider. All providers charge different break costs and generally the break costs reduce as the end of the contract looms. TPG was, in fact, offering a slightly better deal (and they are the same company but different deals).
- I still don’t entirely know what NBN is. Well, I do and I don’t. Fibre to the node something something. It’s a big federal infrastructure plan. It was meant to be rolled out to each and every household across Australia, but that was getting expensive so the Government decided that bits could be done with the most cost-effective infrastructure. So the end result is not as extensive as the original plan in the NBN format. Some media reports suggest that the NBN is facing problems in its speed and customer service (witness Telstra’s problems), and even NBN itself admits it has some customer service problems. Note also that NBN is not everywhere – notably not in southern Canberra.
- You can check if NBN is available in your area, the rollout progress and what type of connection. Don’t wait for an envelope in the mail. According to Giulia, the best resource is the NBN Co website. And it is really important to check what type of connection is available. This is because FTTN means that NBN is connected to the box on the corner of your street, then past that NBN uses the old copper wire into buildings. This is especially relevant for apartment blocks – in many cases with FTTN the maximum speed you are guaranteed with NBN is 25 Mbps because of the copper wiring.
- VDSL2 is just as good and arguably better. I briefly dated someone who worked for a telco, and he suggested that VDSL2 is a better option as it is often faster and more reliable. My friend Craig the Geek describes VDSL as ADSL on steroids. It is owned by private telcos (in Canberra it is owned by iiNet). Although other people in my Melrose Place style apartment block say they have VDSL2, my telco says that it is not available where I live. That’s a shame because iiNet is offering a special deal of $39.95/month for the first 12 months of a 24-month contract with VDSL2 as opposed to $69.95 for a similar NBN product.
- Several companies offer the same or similar products. The guy who advised me about VDSL2 admitted that for his home use, he didn’t use his company’s product. Some of the smaller players offer deals that are much better and just as reliable as the big telcos. (As you probably gathered, this was an unusual discussion for going on a date although I found it very interesting and absorbing.) It pays to shop around. In my case, I had contract break fees to contend with. It is also time-consuming, spending time on the phone to these telcos, waiting to speak to someone, so in the end I kind of opted for the same same (albeit on a not too bad deal). But when you consider how much you will spend over 12 or 24 months, it definitely pays to shop around.
- 25mbps is fine for Netflix and for many purposes. What you use your internet for will determine how fast you need your connection to be. For blogging, Facebook, Youtube and Netflix 25mbps is fine. If you are a super keen gamer and are really into VR, or have several teenagers at home who are, then you probably need a higher speed. I stream Netflix from my phone to my TV using Google Chromecast and the picture quality is fine with no freezing or dropouts.
- 25 Mbps might be the maximum you can get in any case. NBN has been billed as the internet autobahn, offering blistering speeds. The reality and the reason that Optus and Telstra are compensating so many customers is that in most cases 25 Mbps is the maximum you can get anyway – especially if you are on FTTN. So don’t pay extra for a speed you might not even be about to get. If you do want more than 25 Mbps, perhaps start on a lower speed, monitor how it performs through sites such as Speed Test, and then upgrade. Giulia notes that many telcos do not offer the 50 Mpbs option and will only offer 25 Mpbs or 100 Mpbs.
- You might need a new modem for NBN and someone will need to come to your home to install it. My telco kind of glossed over this part. I have had a few anxiety attacks (seriously) over modems and internet installation. I was expecting to be sent a parcel and left with cryptic instructions. Instead, a friendly contractor (subcontracted by the telco) came at exactly the appointed time and installed the new modem quickly and easily. And it worked! Giulia said that she got sent a modem and all she had to do was plug it in and it worked – so it does vary. Beware that sometimes while a new plan is billed as ‘no startup fee’, you may need to pay for a new modem.
How to negotiate the best deal
- Do not pay break fees with your Telco. You have up until 12 months, don’t panic, and don’t be coerced into paying for break fees as ADSL is going to be turned off anyway. If your telco threatens to charge you then ask how they will continue service when they clearly can’t.
- Do your research on the Internet or with Pamphlets before you pick up the phone. Be patient – it takes ages to actually get through to a sales rep on the phone so have your figures with you for the best deals. Point out what competitors offer and ask if your provider will match it. You do not have to stick with the same provider, especially if they are offering sub-standard service. Remember you will need a new modem and installation anyway, so whatever happens it will be a new service.
- Some of the smaller telcos offer good deals. One of the Frugal Dare to Millionaire Facebook Group members shared how she got a deal that was around $20/month better off (with no contract) through using Barefoot Telecom. The products that you are able to use will depend on your area. Keep all those brochures and spam mail from your mail inbox when NBN comes to your area and compare, evaluate and contrast.
- Ask your neighbours who they use. This gives you an idea of what competition is available in your area, and what the lowest possible price is that you could obtain. Make sure you tell your Telco this when you speak with them.
- Beware of scammers. Dodgy people posing as ‘from the NBN’ are getting money from people when they shouldn’t. Do not pay by non-standard means such as iTunes. Always be very careful who you give credit card information to.
For me, overall I did not get a ‘savings’ on NBN, but I managed to get better internet speeds for the same money. AND I saved $59.99 off the installation, $10 delivery fee and around $225 for contract break costs – total of $294.99
How much have you, or could you, negotiate on a new NBN plan? I would love to hear your story on the Frugal Dare to Millionaire Facebook Group.
Cashed Up Christmas savings tally:
Wants versus needs – estimate $300 just on Christmas
Kogans mobile $167 plan 365 days
Growing your own herbs $182 a year
NBN savings: $294.99
A few minor points if I may:
– Moving from ADSL to the NBN (or mobile broadband or alternative fixed broadband solutions offered by commercial operators who use their own fibre and compete directly with the government’s NBN Co.) is indeed MANDATORY. No exceptions. The cut off period mandated by NBN Australia is 18 months from the property’s “ready for service” date. If you are currently on ADSL and just sit on your hands and do nothing, you will eventually lose service.
– If you are on a lock-in contract with your ISP (very very bad idea but that’s a discussion for another time) and the NBN arrives, they should allow you to switch from ADSL to an NBN plan with them without incurring any break costs. Break costs will only apply if you want to switch to a different provider. If your current ISP doesn’t offer NBN plans, you can simple walk away free and clear.
My team of researchers constantly keeps on top of the best deals on broadband (as well as many other things). You can download our most up-to-date report on the best value NBN deals (as well as what alternatives you have if you’re not keen on the NBN) from here:
Thanks for sharing. Hmmm, seems to be some confusion about the cutoff date. I thought I only had 12 months, Giulia was told by NBN Co that her service would not be cut off, and you are mentioning 18 months. In any case, you don’t have to rush immediately that NBN rolls out but I agree that at some point ADSL will become old technology.
What about VDSL? I am assuming that would stay longer than ADSL in any case.
The NBN has just been rolled out to my suburb in inner South Canberra. My internet provider – iinet – wrote to me to say that, since I was already on VDSL2 (fibre to the node), there would be no benefit and no requirement to changeover to NBN. Since several friends of mine have had problems with NBN – both in terms of speed and reliability, I decided to stay with VDSL2 at a saving of around $20 per month over the plans being offered by NBN. I have the speeds I need and generally excellent reliability. And I can pocket the (virtual) savings 🙂
Yeah! $20 a month equals $240 a year. Lucky your provider was honest and upfront. I think a lot of people are spending money on NBN when they don’t in fact need to. My previous ADSL actually worked very well …