New research from telecommunications operator SpinTel has revealed far too many Aussie households are spending too much on their internet, paying for speeds they aren’t making the most of.
Even worse, knowing this information, around 70 per cent of household decision makers said they would never lower the internet speed tier they signed up for – whether they need it or not.
The research surveyed 1000 Aussies and found that that more than one-third of users don’t understand how internet speeds work. As a result, SpinTel CEO Liam Bal says many struggle to identify the best value and often end up with plans that don’t suit their actual needs.
“Better transparency around how much internet speed is actually required for everyday activities could help customers save money and make more informed choices,” he says.
“Most consumers don’t realise that a slower speed, at a reduced cost, can easily meet their needs while saving money.”
As an example, Mr Bal says a household with 1-2 people streaming, video conferencing and browsing would have a great experience and ample speed with a standard 50Mbps plan, yet 70 percent of respondents pay up to $50 per month extra for a 100Mbps plan that they don’t require.
But 31 per cent customers were more than willing to switch internet providers (just not speed tiers), even for just a few dollars saving each month and a further 22 per cent said they would think about it.
Shockingly, three per cent of survey respondents said they don’t actually know how much they’re paying each month for the internet service.
Internet usage shows high speed not needed
The study showed the majority of internet users used the web to browse (94 per cent), shop online (88 per cent), or engage with social media (83 per cent). These were by far the biggest online activities for Australians.
Less than half of Aussie internet users are partaking in high-speed internet activities like video conferencing calls (41 per cent) or online gaming (47 per cent). SpinTel says this shows that better consumer knowledge could lead to more tailored, cost-effective plans.
Existing contract obligations
Whether customers want to switch internet providers or not, contract obligations – or penalties for breaking a contract – hinder their ability to switch. More than 20 per cent of respondents said they were dissatisfied with their provider, and 64 per cent say they would switch for even a small price reduction if they could exit their current contract.
Over half (54 per cent) of unhappy internet decision-makers feel unable to switch due to contract restrictions but would move to another provider if they weren’t locked in. This perceived lock-in is preventing Australians from exploring better deals.
“Internet providers have a clear opportunity to alleviate confusion and build trust with consumers,” says Mr Bal.
“Providing better transparency and education on what speeds are actually needed for daily activities can help customers save money and feel more confident in their choices.”
What NBN speed have you signed up for? Do you think you could get away with a slower speed? Let us know in the comments section below.
Also read: Best 5G home internet plans
Exactly, 50 is ample for the vast majority of two people households. Maybe you think you need more as the computer you have is not updated to the near latest one. It makes a huge difference to your online experience when using a slower computer. Websites can be very resource heavy, and are increasing all the time, if your PC is running near it’s limit it will slow down dramatically.
We recently upgraded to fibre to the premises and also upgraded to a top speed tier because with our provider there is little difference in cost between our former 100 Mb/sec speed and our current 1000 Mb/sec speed tier. Only $10 a month more and we actually get the speed we pay for too.
For most uses we don’t need that speed but the gamers in the house appreciate the faster downloads and ping rate. We are consistently getting around 950/45.