NBN more affordable than electricity and water, according to NBN

Monthly broadband bills have become less of a burden in most Australian homes, according to new research commissioned by NBN Co.

Prepared by insights firm Accenture, the Consumer Affordability of NBN Services report looks at how Australian internet costs compare both to the price of other utilities, and to the price of broadband in similar countries. While there’s a wide range of NBN plans and prices on offer — and ‘affordability’ can be a subjective term — the report found that, overall, most Aussies are unconcerned with the price of their NBN service.

NBN or energy – which is more affordable?

Accenture surveyed over 2,400 NBN customers to gauge how happy the average user is with their current broadband costs. According to the firm’s findings, the average household spend on NBN plans is $16.80 per week, or $73 per month (Canstar Blue’s own 2021 research found the average NBN spend to be $71 monthly). With Accenture listing the average weekly income in Aussie homes as $1,600 post tax, this means we’re spending roughly 1.1% of our income on our NBN plan.

This is slightly less than what we’re typically spending on other utilities, particularly energy and water. Accenture’s report states that households spend $21 per week on water (1.3% of their total income), $25 on electricity (1.6%), and $14 on gas (0.9%). This tracks with consumer perspectives on NBN affordability: Accenture reports that while 60% of survey respondents consider NBN ‘affordable’ or ‘highly affordable’, only 47% feel the same way about electricity.

Accenture also found that only 9% of respondents felt the NBN to be unaffordable, and just 3% consider it ‘highly unaffordable’. In comparison, 29% of survey takers found that their electricity costs were hard to afford — that’s more than one in four Australian households.

The report did agree that perceptions in affordability varied by household income levels. Unsurprisingly, survey participants with lower yearly incomes (under $52,000) were much more likely to consider NBN expensive, but were still more concerned with the cost of electricity, water and gas. 85% of respondents in this income bracket agreed that NBN was affordable, but only 68% said the same about electricity.

Australian broadband prices vs. the world

In addition to comparing the cost of NBN and other home utilities, Accenture’s report also looked at how broadband costs in Australia stack up worldwide. The firm compared Australian NBN pricing with similar broadband products in 12 other countries, factoring in income per capita and relative purchasing power.

Overall, Accenture found that Australia is the sixth most affordable country for broadband out of the 13 nations included. This places us ahead of nearest neighbour New Zealand, which landed in 11th place despite its similar economy, culture and geography to Australia.

Australia was the fifth most affordable country for both NBN 12 speed and NBN 25 speed plans, and the fourth for NBN 50 – the most popular NBN speed tier in Australia, according to the ACCC. In terms of faster speeds, Australia placed sixth for NBN 100, behind France, Japan, South Korea, Germany and the USA.

Accenture’s findings also showed that Australia has made huge improvements in broadband affordability from 2017-2018 to 2019-2020, with prices dropping by 0.13 percentage points on average. Australia was one of six countries listed to lower broadband prices in this time period, with USA, Canada, New Zealand, Japan, Italy, UK and Spain all recording average price increases.

Making NBN affordable for all

The NBN can be a contentious subject, but knowing that most of us aren’t losing sleep over our internet bill is good news. However, there’s still a percentage of Australians experiencing a ‘digital divide’  — or at the very least, who are eager to shave some dollars off their monthly broadband plan.

“Given the fundamental role of connectivity in all areas of our lives right now, it’s encouraging to know that broadband affordability isn’t a concern for most Australians,”  said NBN consumer experience expert Jane McNamara.

“We are aware though there are still those both on and off our network for whom access or affordability of NBN services remain a concern, and we’re committed to continuing to work with the industry to address these barriers.”

Consumer watching ACCC has spoken frequently about the need to lower costs to entry-level NBN for consumers, and NBN Co’s new campaign to bring more Aussies on to the network may address this. Currently, the company is offering internet service providers a monthly wholesale rebate for connecting eligible ‘Ready to Connect’ addresses to an NBN plan.

This includes addresses that have never been connected to the network, or who have been inactive on NBN for a period of 18 months or longer. The rebate is available to fixed line and fixed wireless connections, with plans to launch a separate campaign specifically for Sky Muster Plus satellite.

NBN Co will offer providers rebates over six or 18 months, depending on the length of time a connection has been inactive. NBN providers can then pass these savings on to customers by offering major discounts to eligible sign-ups for a fixed term.

“Our new pricing rebate initiative launched this month is designed to support retailers to market their offers to the unconnected, helping reduce the affordability gap for unconnected households, across Australia, to help them benefit from access to high-speed broadband,” said Ms. McNamara.

“We want to ensure unconnected Australians, especially those questioning whether they can afford the benefits of connectivity, are aware of the great deals in the market.”

Compare NBN plans

If you’re looking for a better NBN deal, use Canstar Blue’s free comparison tools to shop around across the four major speed tiers – NBN 12, NBN 25, NBN 50 and NBN 100. You’ll find a selection of plans in the tables below.