4G sparks broadband price war

Tuesday 15 October 2013 08.36
Fibre speeds are increasing as better mobile connections are coming.
Fibre speeds are increasing as better mobile connections are coming.

It’s no coincidence that fibre speeds are increasing as better mobile connections are coming, writes Niall Kitson.

The news that UPC is increasing its entry-level fixed line broadband offering from 50Mb/s to 120Mb/s and its upper offering to 150Mb/s to 200Mb/s is great for consumers. UPC’s €500 million investment in its Irish network is continuing to pay off with better services and cheaper pricing.

Still, this isn’t a ‘because we can’ move. Since the rollout of Eircom’s eFibre network began in May, fixed line speeds of 70Mb/s have become the norm. Providers that can’t match that are using add-ons like phone, TV and on-demand content to stay attractive.

Magnet, Digiweb, Vodafone and O2 are all in the 70Mb/s space. Below that, Sky and Smart Telecom can be found offering 24Mb/s. Wireless ‘mid-band’ 3G dongles from O2, Vodafone, Meteor and Three have shifted their marketing to focus on creative price plans over speed - which all promise a standard 21Mb/s. Bottom performers of our whistle stop tour are wireless providers Imagine (10Mb/s) and Ripplecom (8Mb/s), whose offerings are propped up with generous phone packages and download allowances.

Competition between broadband providers has improved significantly since the arrival of fibre. Between the various technologies you don’t have to pay more than €50 a month to get a decent service, though what sounds like a decent service and what actually is can be unclear. As we’ve discussed on the TechRadio podcast, after a point broadband speeds become a numbers game. Unless you like downloading a lot of media content or have multiple devices on a home network at the same time, you don’t need a 70Mb/s connection, let alone anything over 100Mb/s. When you have a desktop, PC, tablet and smartphone all vying for space on the same connection, then you might. It’s inevitable something will come along to change this, but for now your animated GIFs and cat videos can survive just fine on a sub-1Mb/s connection. Even bandwidth-hogging Netflix only needs 1Mb/s to work. UPC’s 200Mb/s looks great on paper, in real terms it’s a bully play based on the promise of there being more to do on it than there actually is.

Which brings us to the real reason you’re getting a better deal on fixed-line: long-term evolution networks, aka 4G.

Eircom, Vodafone, and O2 have been all over the next generation of mobile networks since the spectrum auction in 2012 (worth an estimated €845 million to the state). Eircom made it first to market earlier this month, followed by Vodafone last week. Availability is limited to cities and large towns for now, and you will need a compatible handset to receive it but the benefits will prove a game changer in the same way fibre did in fixed line - only here is a market UPC doesn’t have a hand in.

According to Eircom and Vodafone, 4G is 10 times faster than 3G and upload speeds twice as good. Don’t get too excited, the 3G speeds quoted are on a par with that in mobile phones, not broadband modems. Based on my reception this month that would mean something in the region of 50mb/s. Eircom/Meteor is offering a more conservative package of 25Mb/s with unlimited data (until 2014) for €49 per month. Business customers on eMobile can pay less (€30 ex VAT) for the same speed with a data cap of 15Gb. Vodafone hasn’t released exact speeds but €29.99 a month will get a data allowance of 20Gb. O2 and Three have been quiet on 4G plans, though both have made significant investments - we may know more when a final agreement is made on Three’s O2 takeover bid.

Faster speeds, better networks, more price competition are all good for the consumer but as applications get hungrier the real battleground will shift not from how fast your connection is to how much it will let you do, and how much you get charged when you go over your data allowance. Some fixed line services have data caps as low as 2Gb - less than many mobile price plans. The ability to tether your mobile phone to a PC or tablet may seem like a more enticing option than a fixed-line service or a dongle but it is data intensive.

Before switching any service, however, it’s best to do an audit of how much data you use in a given month. US mobile network Verizon has a handy data usage calculator that’s worth using to give you a rough estimate of what kind of allowance you should be looking for. You might me surprised at how much latitude it gives you in choosing a new service.

Fixed line services are becoming better value as viable mobile alternatives ramp up. The question is: are these technologies growing up in tandem with or because of each other? Recent events would suggest the latter.

Niall Kitson is editor of TechCentral.ie