Would Einstein be able to work out the actual cost of your broadband service?!

I feel the regulator should step in and do something about this.

Why do many broadband providers make their pricing so confusing? It’s because they want to make you think their service is one price, while actually charging you another. They try to make their packages look cheaper in order to win new signups from their competitors. They want your hard-earned cash so badly, they are willing to conceal the truth just a little. Then their competitors do the same, so they push things another bit. Some common tricks are:

Teaser Rates

This week, I saw an ad on TV advertising broadband, phone, mobile and TV for €35 per month, including a free mobile phone! Wow, what a great offer, I thought. They mentioned in hushed tones that this was for the first 6 months, but only once at the beginning. They then went on, with flashy images, to reiterate the price of “only €35 per month!” over and over, with no mention of the first 6 months again. By the end of the ad, the figure “35” was firmly implanted in your brain, with images of fellas playing football on flat-screen TVs, iPads, phones, laptops, the whole shebang. The small print, which I had to rewind to the start of the ad for, said that the actual price going forward was €100 per month on an 24 month contract. So the average price was €83.75 per month. I feel the regulator should step in and do something about this. Make them show the average monthly price over the whole contract, along with the total contract cost! In this case, the full cost of the contract would be €2010. Now that’s a number they don’t want to imprint in your brain.

Image result for cost of broadbandRestrictive Data Overage Charges

This is one favoured by the mobile networks, but not a lot of people know that it happens on some fixed-line broadband services too. With mobile networks, “airtime” is a scarce commodity. There is simply not a lot of data in the network, so charging heavy users more than light users actually makes sense technically (much as we might not like it). On fixed-line networks, many providers also pay OpenEir (eircom Limited’s wholesale business) more for heavy users. Most say “Unlimited” but have a fair usage policy. Some will charge based on how much you go over some hidden limit, which is shady. You could get a nasty surprise. Providers should be open and transparent about these things - keep the trust of their customers! One business “fibre” (don’t start me) package only has 40GB/month allowance, which is pretty much impossible to keep to!

In Australia, broadband is sold by the amount of data you get in a month, rather than maximum speed. This is because Australia historically had very poor international connectivity and providers found it very expensive to get wholesale internet capacity. Now, the government forces providers to show the true contract cost right up there with the headline price, which I think is something that government here needs to look at. Here’s an example from the Telstra website:

So before you take a leap into your next broadband contract commitment, just get out the calculator on your phone, multiply the monthly price by the minimum contract, then add any setup fees. Shop around based on the answer. At least you know what you are getting into. If you can navigate the small print and find those numbers! Good luck!