the significant premium New Zealanders pay for broadband connectivity really makes the mouth pucker up!
Seven times.  At least.

That was the answer to the question posed last week: “How much more do rural people pay for equivalent broadband services above what urban people pay?”

I took some criticism of that figure because my five times multiplier was based on an apples for apples comparison.  The critical ones wanted to compare apples with persimmons.

persimmon on the digital highwayPersimmons are a quite astringent fruit if they are not eaten when fully ripe.  A bit like biting in to a banana skin, they make your mouth pucker up and go eughh.

Even by their sour measure, the multiplier was greater than 2.5.

Comparing only the base price is misleading and can lead to things like bill shock when you exceed your data cap.

Meaningful comparisons of broadband tariffs across international borders, as well as the urban-rural boundary, can only be achieved by normalising variables.

Retail broadband plans have two important variables: bandwidth (Mbps – mega bits per second) and data caps (GB – giga bytes).

Other variables like latency and availability are important  but only serve to complicate the comparison and so are not included in this analysis.

I have normalised bandwidth against the the plan cost (giving us $/Mbps) to enable international comparisons and because bandwidth is something that we normally do not have control over.

For a monthly data cap of 30GB, the most affordable service provider is InfoNet Wireless costing $17.69/Mbps and the most expensive is Farmside Satellite at $317/Mbps.

Compass Wireless ($22/Mbps) costs less per month than InfoNet but their speeds are also less which is why the normalised price is greater.   If the speed of your connection does not matter to you, then go for the cheapest, or for even greater savings, sign up for a dial-up service at around $10 per month for unlimited data.

Of the government’s RBI (Rural Broadband Initiative) service providers, Woosh ($37.50/Mbps) are the cheapest with Farmside ($50.25/Mbps which is the only ISP to include national phone calls in the tariff) the most expensive and Vodafone ($47.50/Mbps), the providers of the RBI network, settling in the middle.

These prices compare to the UFB price for the same service level of $2.50 (which is 1/7th of the InfoNet price) and to the international average across all wire-line connections of $2.62.

That rural households and business are paying a significant premium for a lesser standard of service, is bad enough  But the significant premium New Zealanders pay for broadband connectivity really makes the mouth pucker up!

Franklin's Rural Broadband tariffs compared

Franklin’s Rural Broadband tariffs compared for 30GB of monthly data