Yahoo Finance NBN price hikes: How you can save and avoid the $1.2b loyalty tax
There’s a $390 price gap between the cheapest and most expensive unlimited-data NBN 50 plan with no lock-in contract.
As the cost of living remains stubbornly high, many Aussie households are looking for simple ways to save, and a good place to start is your home internet.
There’s been a whirlwind of price changes from small and major NBN providers, including Telstra, Optus, Aussie Broadband, Dodo, More Telecom and Tangerine. Finder’s utility bill statistics report found 17 out of 44 NBN providers in its database had shaken up their plans since October 2023.
It won’t be surprising if others make similar changes this year following NBN Co’s new pricing framework, which was put in place on December 1, 2023.
So, how are these changes impacting households?
The main move we’ve seen has been that NBN 50 plans are becoming more expensive - by $5-$11 per month. It’s the most popular speed tier - used by 44 per cent of Aussies.
The news comes as a big blow, given the price of everything else in our lives has gone up, from energy to groceries to insurance and mortgages.
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On the flipside, faster internet is becoming cheaper, in a way. NBN 100, the second-most-popular speed tier among Aussies, has seen a price cut from a few providers.
Interestingly, the price gap between an NBN 50 and an NBN 100 plan has fallen from an average of $17 a month to $9 a month.
So, you can now get download speeds that are twice as fast at a much smaller price difference. You may even see yourself leaning towards a faster internet plan.
But the caveat here is, do you even need faster speeds?
Finder research found that 28 per cent of Aussies experienced buffering internet weekly, if not daily. It could be your modem or router, or you have multiple folks at home using the internet simultaneously.
Usually, households of three-four people or more will be better off with an NBN 100 plan if they’re all carrying out online activities at the same time. For others, saving $9 a month, on average, or $108 over the year with an NBN 50 plan is still better than opting for speeds they don’t need.
How to save on your NBN plan and avoid the loyalty tax
Finder’s report also found households with an NBN 25, NBN 50 or NBN 100 plan were paying $1.2 billion in ‘loyalty tax’ - the cost of staying with your provider rather than shopping around for a better deal..
Here’s a look at how much people are spending, on average, for each speed tier compared to the cheapest plan as of December 2023.
No promotions have been taken into account so you’re potentially looking at even bigger savings.
Top tips to save
Here are some tips to help you save money on your internet bills in the new year:
A good rule of thumb is to shop around for NBN plans every six-12 months. Providers often sling six-month sign-up discounts, which can help bring down your yearly costs. Once the discount period is up you can always search for a new deal.
Don’t get stressed about switching plans. It’s super easy. These days, providers tend to offer no-lock-in contracts and the option to BYO modem.
Don’t just stick to big brand names or keep paying a loyalty tax by sticking with the same provider for years. There’s a big price difference between the cheapest and most expensive plans across each speed tier. For example, there’s a $390 price gap between the cheapest and most expensive unlimited-data NBN 50 plan with no lock-in contract.
Lastly, choose the right speed for your household. Getting faster speeds than you need will cost you in the long run. The general rule is the faster the speed, the more you’ll end up paying. Don’t let a provider convince you to sign up for speeds you don’t need.
Interestingly, the Australian Competition and Consumer Commission (ACCC) is also urging households to shop around, after announcing they are keeping a close eye on NBN retailers.
"It has never been more important for consumers to compare prices between retailers to make sure they are getting a deal that represents good value for them," ACCC commissioner Anna Brakey said.
“There are significant price differences between retailers, so it is worth seeing what other deals are available."
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