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Mobile data expensive in New Zealand

New Zealand’s measly fixed broadband data caps are often blamed on Southern Cross Cable Network’s international data traffic monopoly. It doesn’t explain the miserly amounts of mobile data offered by New Zealand’s wireless carriers.

In fact, blaming the submarine cable is a silly argument, international traffic is a tiny fraction of an ISP’s costs.

Another argument you hear is the cost of mobile spectrum. Again, it doesn’t stack up.

Mobile data is cheaper in Australia

Australians pay much less than New Zealanders. This week Virgin Mobile launched a 4G postpaid mobile broadband plan giving users 13GB of data for A$59. That works out at around NZ$5.5 per GB. A typical New Zealand plan works out at $20 for 1GB.

New Zealand’s best data plan is 2degrees’ $99 12GB data pack. That’s NZ$8.25 per GB or 50 per cent more expensive than the Virgin Mobile price. It is only available in 2degrees’ limited broadband zones and the carrier’s data service is on the 3G network. Which means slow data.

New Zealand carriers paid far less proportionately to buy 4G spectrum than the Australian carriers. Australia’s government went for a windfall. New Zealand’s government chose to make the 4G spectrum available and usable to the maximum number of users.

Scale is part of the problem

Sure, Australia is bigger so carriers have economies of scale not available in New Zealand, but that can’t be the only reason. And anyway can it mean the cost per bit is half as much again?

Our mobile carriers need to be profitable – we don’t want them to collapse. But it is hard to understand why New Zealand mobile data is so expensive. It distorts usage patterns and means New Zealanders don’t get all the benefits of mobile computing.