Ask LH: What Are Off-Net Plans?

Hey Lifehacker dudes! I have been looking at some new internet plans and I have come across some “off-net” plans (specifically with TPG). I was wondering: what exactly is “off-net”, and why is it so much cheaper than normal? Thanks, Net Of Confusion

Picture by Brad Hinton

Dear NOC,

In simple terms, there are two ways in which internet service providers (ISPs) can provide an ADSL internet connection. Firstly, they can install their own equipment in telephone exchanges and provide a direct service to the customer. Secondly, they can purchase wholesale access to an existing ADSL network and then resell it to others.

Outside of Telstra and Optus (which both entirely run their own networks), most large ISPs operate on a mixture of their own equipment and reselling services purchased wholesale from others. (Smaller ISPs generally rely entirely on purchasing wholesale access.) TPG describes its plans which are based on wholesale Telstra services as “off-net”, to distinguish them from those which utilise its own network. It’s not a label widely used elsewhere.

Whatever the label, the consequence of this approach is that the pricing for off-net services is different, though I’d question your statement that it’s cheaper. For its own network using ADSL2+, TPG charges $29.99 a month for a 50GB plan, $39.99 for 150GB, $49.99 for 500GB, or $59.99 for an “unlimited” service. Its cheapest off-net plan costs $49.99 and has a 50GB limit. Even on a slower ADSL1 off-net plan, $39.99 gets 100GB, which is less than the equivalent ADSL2+ plan. In other words: TPG’s own network plans are cheaper. This tends to be the case across all providers that offer a mix of options: it’s harder to make a profit when your single biggest cost is wholesale access from a large telco.

Of course, it’s not much help knowing that if you’re in an area where TPG only offers “off-net” plans. However, at that point, you probably should widen your search to include other ISPs anyway (since you’ll be getting the same basic connection from many of them).

If you do have the choice between purchasing a provider’s own service and the one it offers “off-net”, I’d always go for the former, because in the event of a service issue, it makes things simpler. A problem with your connection could be caused by your PC or router, or by issues on the line or in the exchange. If you’re using an off-net plan, you’ll never be in direct contact with the organisation running it, which can make getting resolution much slower. In the case of TPG, it’s fair to say that many Lifehacker readers have been highly critical of its customer service, so you don’t want to add in extra complications unless there’s a very compelling price reason.


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