How do the NBN speed tiers work?

The NBN, or National Broadband Network, is an upgrade to Australia’s existing telecommunications infrastructure, replacing the existing copper wire and hybrid fibre coaxial (HFC) networks with much faster fibre optic cable technology. Sounds promising, right? But to get the best out of the NBN you’ll need to pick the speed tier that’s right for you. Speed tiers you say? Don’t worry, we’ll explain.

The NBN is a long overdue overhaul to Australia’s existing internet infrastructure, and will allow internet download speeds of up to 100 Megabits per second (Mbps), which is four times faster than the current fastest ADSL2+ broadband currently on offer in Australia – even with fibre to the node (FTTN) instead of full fibre to the premises (FTTP). If you’re not clued up on the technologies behind the NBN, don’t worry, there’s nothing you can do about which type of connection reaches your home anyway.

What are the NBN speed tiers?

There are four NBN speed tiers available:

  • “NBN 12” – 12/1Mbps (download/upload)
  • “NBN 25” – 25/5Mbps (download/upload)
  • “NBN 50” – 50/20Mbps (download/upload)
  • “NBN 100” – 100/40Mbps (download/upload)

While the ‘NBN 12’ tier delivers pretty much the same speeds as what you’ll get with most copper connections – and is therefore not considered ‘superfast’ broadband – the other three tiers are all likely to be an improvement on most residential connections. When you’re choosing an NBN plan, it’s not just about the cost of the plan or how much data you’re going to need. You need to consider how quick you want it.

This ability to choose speeds does come at a cost, however. Most NBN providers generally offer plans across all or most speed tiers, but for an additional fee. Expect jumping into the next fastest speed tier to add about $5-10 to your monthly bill, while jumping from NBN 12 up to NBN 100 could double your costs! The telcos tend to advertise their cheapest NBN products, but these are almost always with NBN 12 speeds and a very modest data allowance. The reality is that if you want a top NBN plan, you’ll need to pay extra for it.

However, you generally can’t expect these speeds to be available all the time. You should enjoy most of the advertised speeds, but there are factors that come into play which can potentially slow things down for you, regardless of your speed tier. These include:

  • The distance from your home to the telco exchange
  • The quality of your hardware (i.e. modern/router)
  • Any time of day (peak/off peak) restrictions imposed by your service provider

So the best steps you can take to ensure the best speeds possible are to have a decent modem with decent positioning and a generous plan with adequate data that does not have any speed throttling. You can’t exactly control how close your home is to the telco exchange, though. However if you are moving into an NBN zone this might be of important consideration.

What NBN speed tier do I need?

Choosing the right speed for your needs can be tricky – you don’t want to overpay for a level of service you don’t need – but here is a guide to what each speed tier is generally suitable for.

  • NBN 12: Suitable for social media, web browsing, occasional videos – good for light users
  • NBN 25: Suitable for more intensive streaming and browsing – good for small households
  • NBN 50: Suitable for HD streaming, responsive online gaming, uploading and downloading large files – good for families
  • NBN 100: Suitable for 4K video streaming, streaming across multiple devices, uploading and downloading large files, ‘super’ responsive online gaming – good for larger households with extremely high multimedia demands

So, if your needs are not intensive, then it makes little sense to pay extra for tip-top speeds. With that said, your budget can also affect the speeds you receive, so what can you get for your money?

How much does the NBN cost?

This depends on what NBN speed tier you’re after. Using a 50GB data minimum (less data likely means less money spent), expect costs of around:

  • NBN 12: Minimum of about $40 per month
  • NBN 25: Minimum of about $45-$50 per month
  • NBN 50: Minimum of about $60 per month
  • NBN 100: Minimum of about $60-$70 a month

Generally it’s quite surprising that providers offer no discernable discounts for opting for a slower speed tier. That is to say, if you’re looking at NBN 12, you may as well also look at NBN 25 because it won’t cost you much, if anything, extra. If you’re looking at NBN 50, then it’s worth looking into NBN 100. Although costs may be slightly higher, you might find you get better value.

With all of that being said, many of us on the NBN will be seeing speeds previously unseen on our old ADSL2+ connections. So, with more speed comes less time waiting and more time downloading. With that in mind, it could be worth looking at unlimited data plans for peace of mind, and you may expect unlimited data to be very expensive, but the results might surprise you. Compare some different plans on different tiers below to see what you can get for your money.

NBN 12 Costs

  • Cheapest unlimited plans tend to be about $55 a month

Not too dissimilar to the speed you’ll experience with an ADSL2+ connection, this speed is ‘okay’ for everyday residential use. Keep an eye out for providers such as SpinTel, Exetel, AusBBS and Inspired Broadband here. All are smaller providers and you’ll find they tend to offer cheaper plans than the likes of Telstra and Optus, but of course the bigger guys throw in entertainment packages to boost the value of their plans.

NBN 25 Costs

  • Cheapest unlimited plans tend to be about $65-$70 a month

This is the best speed for moderate streaming in small households, plus all the usual social media and web browsing. Look for providers such as Motion NBN and Tangerine, as well as AusBBS and Inspired Broadband. It’s also worth noting that some providers offer monthly contracts here, which are great for flexibility should you wish to shop around in the near future. And with NBN always improving, chances are there’s a better deal just around the corner.

NBN 50 Costs

  • Cheapest unlimited plans tend to be about $75-$80 a month

This is the second-fastest NBN speed and it’ll make browsing feel nearly instantaneous, and streaming will likely be a breeze. Also watch your YouTube videos upload at a surprisingly fast rate. Expect latency to also be nearly non-existent, so online gaming should be very enjoyable and lag-free. In this speed tier, again keep an eye out for providers such as AusBBS and Motion, while Activ8Me and Teleron also make an appearance as some of the cheapest providers.

NBN 100 Costs

  • Cheapest unlimited plan is about $60 a month, but most are around $90 a month

Suitable for small businesses, intensive browsing and streaming and for larger, data-hungry households, this tier represents the pinnacle of what NBN has to offer. The cheapest provider to offer unlimited 100 speeds is MyRepublic, however most struggle to match its $60-odd entry price, as other providers such as AusBBS, Motion and Activ8Me are all pushing the $90 mark. However, with MyRepublic this price is for a 12 month contract and you won’t get any phone call inclusions.

How much does Optus and Telstra NBN cost?

  • Optus starts at about $80 for unlimited data on NBN 12
  • Telstra starts at $99 for 1000GB on NBN 25
  • Optus NBN 100 Plans start at $140 a month

You’ll have to ask yourself: Is it really worth going with these big guys for NBN? The smaller providers mentioned above may be better value on data and price alone, but both Optus and Telstra also offer interesting perks that may make up for the price discrepancy.

  • Telstra often includes Foxtel with its plans. Some plans also include Telstra TV.
  • Optus often includes ‘Yes TV’ by Fetch, which is the latest Foxtel challenger and also acts as a digital PVR and set top box. Optus also has rights to English Premier League football, and often includes Optus Sport in its packages.

However, be prepared to pay over $100 a month for these premium plans.

Is superfast NBN worth it?

As stipulated by NBN Co and the ACCC, ‘superfast’ NBN only means download speeds of above 25Mbps. While NBN 12 is still technically pretty good and generally the cheapest tier, the fact is it’s comparable in speed performance to ADSL2+. Therefore, you could easily upgrade to the NBN and be left disappointed by your new connection. To avoid that flat feeling, you will likely need to upgrade to a faster tier and pay more for it.

Searching for superfast broadband and unlimited data could end up costing you over $100 a month. Is that extra cost worth it? You’ll have to weigh up your options and your need for speed. New providers are cropping up all the time and the next best plan will be just around the corner, so you may want to avoid lock-in contracts. Be sure to check out a range of offers from the big, established providers, plus some of the standout smaller guys. Be opened-minded and you should find a great deal.

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