Planhacker: Australian 4G Mobile Broadband

Optus’ launch of 4G services this week means there is real competition for 4G mobile broadband services. Who offers the better deal: Optus or Telstra? Planhacker runs through the options.

Prior to Optus’ announcement, 4G in Australia was effectively a one-horse race with Telstra in the saddle. Theoretically, vividwireless was also a competitor, but its actual service was atrocious and it effectively disappeared after Optus acquired it earlier this year. Vodafone is planning its own 4G network, but that’s not due until 2013.

Both Telstra and Optus operate LTE at 1800MHz. When we compared the two services in the Hunter Valley, Telstra still had a definite speed advantage. That said, experience with 4G varies widely, and Optus’ speeds on 4G were much higher than its 3G alternatives.

In the table below, we’ve listed the options available from both Telstra and Optus for 4G mobile broadband, based on the data available on their sites. (Telstra, as usual, has needlessly complex ways of listing its handset charges and subsidies.)

Right now, Optus is only selling its equipment to service customers, but its charges for 3G mobile broadband are the same for both business and home customers and we’d expect that to continue when consumer 4G launches later this year. Optus isn’t selling its devices standalone; you pay a monthly fee to cover the cost of the device and have to sign up to a contract.

Telstra offers contracts for both business and consumer users, though details vary. Telstra also has prepaid options for consumers, which we’ve included in this table as well.

Both companies offer a choice of either a USB dongle or a Wi-Fi hotspot. The former is generally cheaper, but the latter is more flexible, since it lets you share a single 4G connection with up to five devices. In most contexts, the Wi-Fi makes more economic sense. (We haven’t included Telstra’s gateway options designed for business sharing or its “extreme” plans aimed at multiple users.)

For each plan, we’ve noted the type and name; monthly cost; the contract length; the type of equipment (USB or Wi-Fi); any equipment charges, whether monthly or upfront; and the minimum you’ll pay over the life of the contract (including hardware costs). We’ve also noted how much data you get, and what the effective cost per megabyte is (based on the monthly rate). We’ve discussed other details (such as excess data charges) under the table, as well as offering some general observations on which deals are better.

You can sort and filter this table by clicking on the columns (so you can sort all plans by total price or just pick out Wi-Fi or business options).

Pricing aside, an important consideration is coverage. As a rule, 4G services are concentrated in central business district (CBD) locations. Optus’ 4G service is only in central Sydney, Perth and the Hunter Valley right now; Melbourne and Brisbane will follow this year, with Adelaide and other locations in 2013. Telstra’s footprint is considerably broader, covering every capital city CBD and many regional areas to. Outside 4G coverage areas, you’ll fall back to a 3G connection with either provider. That’s still a fast service, and you don’t pay any extra for 4G where it is available (other than the cost of the access hardware built into your contract).

Optus

Optus has both 12- and 24- month plans, though inevitably you pay higher hardware subsidies on the former. It offers substantially more data than Telstra at equivalent price points, but there’s a weird catch. Unusually, its best value plan is actually the entry-level $34.95 option, which has 10GB of data. The $74.95 plan offers twice as much data but costs more than twice as much, and the same applies to the in-between $54.95 option. As well, the subsidy rates for equipment are identical no matter which plan you require. As such, unless you seriously anticipate needing huge amounts of data, stick with the 10GB option. Excess data is charged at 10 cents per megabyte. Note also that Optus isn’t offering 4G on its two cheapest business mobile broadband plans ($19.95 and $24.95 a month), though this might change when consumer plans are introduced.

Telstra

Telstra offers discounts on its services if you bundle with other options, but we’ve only included the standalone price in the table. The 12-month consumer contract option isn’t available if you do bundle with other products, and you’ll have to pay $299 for a connection device. Prepaid is more flexible and the hardware is cheaper but the data rates are more expensive.

There are hardware subsidy options for business customers on contracts, though businesses can also buy outright and then sign up to a contract or take a month-to-month plan. The Member contract plan option without a supplied device option seems pretty pointless, as it costs more than getting a subsidised device and you’re still tied down to a long-term contract. You’re clearly better off paying $49 for Wi-Fi on the Standard plan than $299 on the Member plan; the extra $5 a month on the Standard plan still totals up to less in the long run once you factor in the hardware cost.

While the USB dongle is subsidised on contract plans, pick carefully; for instance, on a 24-month Standard business plan, both Wi-Fi and USB devices are free, so choosing Wi-Fi would seem the wiser route. Note that Telstra charges slightly different rates if you bring your own device, so every the Standard busines contract plan has some hardware subsidy, even though we haven’t broken this out separately. For business users on the bad-value Member plan, the Wi-Fi and USB devices both cost the same, so again it seems pointless to choose USB. The Casual plan, predictably, charges much higher rates.

In the same way, prepaid for consumers has much more expensive data rates. The Telstra prepaid plans have varying expiry periods, which we’ve listed elsewhere. If you do want a 12-month contract, you might as well go for the Wi-Fi hotspot, since you’ll pay $299 for either that or the otherwise cheaper USB. The overall charges on Liberty plans are higher than on business deals; if you have an ABN, you might want to sign up for a business plan instead.

If you use your Telstra data allocation on a contract plan, you can purchase monthly data packs to top up. 250MB costs $5, 1GB costs $15, 3GB costs $30 and 8GB costs $60. Casual excess data rates vary depending on the plan you’re on; the cheapest (1GB) plan charges a hefty $0.25 per megabyte, the two mid-tier plans (4GB and 8GB) charge $0.10/Mb, and the top (15GB) charges $0.05.

Ultimately, as with most other mobile services, Optus is cheaper than Telstra and offers more data. If 4G is especially important to you, availability in your city will also be a key factor. For occasional use, prepaid makes sense; if you’re going to use the service regularly, the contract deals offer much better data rates. No one plan will suit everybody, so weigh up all the available options carefully.

Lifehacker’s weekly Planhacker column rounds up the best communication deals.