Everything you need to know about switching to the NBN

The internet speed you buy on your NBN contract may not be the speed you receive.

You’ve probably heard about the National Broadband Network (NBN), if only because of the endless political arguments about it. 

But what does it actually mean when the NBN arrives in your town?

The NBN is replacing the existing copper telephone network with a new, faster alternative. It’s being rolled out to every home in Australia (around eight million of them), and is already available to roughly 50 per cent of those households. The entire network is due to be completed by 2020.

You can choose not to connect to the NBN, but that means you’ll eventually have no landline phone or broadband internet service, because 18 months after an area has been NBN-enabled, the old network is switched off.

You can’t, however, choose what kind of NBN connection you’ll get.

Ad. Article continues below.

Different approaches are being used in different regions, so you might be connected via underground fibre, an upgrade to the existing pay TV network, by fixed wireless or satellite. Any given address will only have access to one of these options, however. To find what’s planned at your home and when the service will appear, pop your address into Finder’s NBN tracker.

So what do you get a choice about?

Three things: which provider you sign up with, how long you sign up for, and the speed of the connection you want.

You don’t sign up with NBN itself to get online. Instead, you can choose from a large range of providers (more than 150 at last count). You might choose to stick with your existing broadband provider, but it’s worth doing some comparison shopping first, as you might find that you can get a better-value deal elsewhere.

Remember that you’ll be connecting to the same network no matter which provider you choose. However, what’s included will vary. Some providers will throw in landline services or streaming TV packages, and some will have a better reputation for managing network congestion, which can cause problems if lots of people are simultaneously using their broadband for high-bandwidth activities like watching streaming TV.

Ad. Article continues below.

Your next consideration will be speed.

The majority of NBN plans offer a choice of four speeds: 12, 25, 50, and 100 (though rural users in satellite areas don’t have the same range of speed options). The higher the number, the higher the speed, and the higher the cost.

That said, if you sign up for the cheap 12 option, you’re unlikely to notice any difference from your existing service, while 25 has proven a popular choice. Note that most providers will let you switch up to a higher speed if it turns out your existing choice was too slow. The speeds quoted here are the absolute maximum you can expect from an NBN service, though. In reality, the speeds will usually be lower.

Congestion, as we’ve noted, is also potentially an issue. Providers buy access in bulk from the NBN and then share it around their customers, and some are more generous than others in the amount that they purchase.

There’s no hard and fast rule about whether this happens more often with big providers or small ones. Big providers have more customers, but also get larger discounts when they buy bulk capacity. What this means in practice is that you often won’t know just how fast your service is, especially at peak times, until it’s installed and you’re using it.

Ad. Article continues below.

The ACCC has asked providers to provide more information to customers about typical performance, but that won’t fully happen until 2018 at the earliest. In the meantime, it can be helpful to ask neighbours about their experience.

Providers will be eager to sign you up for a 24-month contract, and will often offer to supply a free modem or installation if you do this.

However, many will also offer month-to-month deals, and these can be worth considering. After all, if you discover that a provider you’ve signed up with suffers from bad congestion issues, you don’t want to be stuck with them for two years.

Knowing all that, how much should you expect to pay?

The cheapest plans we’ve seen come in at under $30 a month, but that’s for a low-speed service without much included data. If you’re willing to spend $70 a month, you can find yourself an unlimited plan at a higher speed. You’ll also be typically looking at between $100 and $200 in modem and set-up costs, though some providers will waive this if you sign up for a 24-month contract.

Have you switched to the NBN yet? Is the service better than your previous broadband or worse?

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.