Fixed wireless in rural areas costs three times the price in urban areas


Spark charges unlucky rural customers almost three times as much as city dwellers for fixed wireless broadband.

The banner price for Spark’s daily wireless plan is $60 per month. For this you benefit from 4G fixed wireless broadband and unlimited data. There are contracts, but you can get an open-ended contract, which means you can go anywhere else whenever you want without penalty.

Meanwhile, Spark’s Naked Rural Wireless plan costs $176 per month if you use an antenna and $166 if you don’t.

Naked Rural Wireless is built on the same 4G technology as the Everyday Wireless plan.

Rural Fixed Wireless Data Caps

There is a data cap of 300 GB. If you want more data, it costs a dollar per gigabyte.

To get Naked Rural Wireless, you must sign a 24 month contract. If you want to leave before the end of the contract, you will be charged an early termination fee of $350.

Vodafone offers an unlimited 4G wireless broadband plan for $65 per month for urban customers. She sells rural plans through her Farm side
subsidiary company. A rural plan with a 200GB data cap costs $166 per month. Additional data is $20 for 15GB.

Broadband competition

In cities and towns, Spark and Vodafone sell fixed wireless broadband in direct competition with fiber and copper-based broadband services.

Although there may be competition in rural areas, this is not always the case. Indeed, there are places where Spark and Vodafone have a local broadband monopoly.

To be fair. It costs more to provide telecommunications services to rural areas. There are more fruits within easy reach in urban areas.

Yet it does not cost three times as much to serve a rural customer. In many cases, a government grant has helped pay for the construction of rural towers.

Wireless Internet Service Providers

Wireless Internet Service Providers or Wisps offers rural services in competition with Spark and Vodafone-Farmside.

They are generally small regional players. This makes it difficult to directly compare their prices with Spark and Vodafone-Farmside,

Yet, in some locations, they may offer a similar fixed wireless product for less.

As of this writing, Taranaki-based Primo has a $99 rural wireless plan with 250GB. The company’s unlimited plan is $149.

Filling gaps in rural broadband coverage

Wisps, do a great job filling the gaps in rural broadband coverage. Anecdotally, they are more popular with customers than the big telecom operators and are more flexible.

Prices for fixed telecommunications services are the same throughout New Zealand. This applies to the UFB fiber network and the copper telephone network.

The idea that everyone pays the same price is part of the Telecommunications Act. In legal terms it is known as
no discrimination.

Another important idea is known as equivalence.

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Simply put, non-discrimination and equivalence means that network operators cannot play favorites. They cannot favor partners or wholesale customers, even if they are part of the same company.

Chorus must give the Crown commitments of equivalence and non-discrimination on its copper network. All fiber companies do the same on the UFB network.

There are similar commitments for the Rural Broadband Initiative covering Chorus, Vodafone and the Rural Connectivity Group. There is no commitment for Wisps.

This is because Vodafone cannot charge other telecom operators more to use its rural towers than it charges its own retail company. This should promote competition.

Fierce competition in cities

As things stand at the start of 2022, competition for urban broadband is intense. Prices are reduced, margins are lower and customers enjoy good deals.

Outside the city, the competition may be less intense. In many rural areas, there is a limited range of options, if any. And clients may need to join a waitlist to get a connection.

New competition from satellites in low earth orbit like Starlink will shake up the market. We don’t see that having a huge impact yet. Give it time.

The government could provide many rural customers with better broadband options by expanding the fiber footprint. Soon, New Zealand’s UFB fiber network will reach 87% of the population. Realistically, the fiber footprint could expand further, say to 92% or more.

It will cost money, but it would be a powerful investment in nation building. We managed to pay the bill by building a New Zealand-wide copper network when there was a lot less money.

Yet for now, unlucky rural fixed wireless broadband customers have to pay three times as much, can consume less data, and face stiffer contracts than their urban cousins. We can solve this problem.

Fixed wireless in rural areas costs three times the price in urban areas was first published on billbennett.co.nz.

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