When researching about broadband internet, most businesses will look at 3 things;
- Data Allowance
Not necessarily in that order. Looking at just these 3 things leaves you with a large gap in the understanding of what you think you are getting and what you actually receive from your service provider.
With terminology such as Standard, Boost, Superfast, Speedboost, Very Fast Speed Boost, Max Boost, Super-Fast Speed Boost, and so on, it’s really easy to understand what you are actually getting right? Hell no. So much so the ACCC opened an investigation into the way telcos represent their products.
So will the NBN will fix this for your business? That’s another no. Why? All those terms are from major telcos websites about their NBN products.
Without getting too technical, let me give a brief explanation on two key factors in the cost of your internet service.
- The connection to your premises – whatever the connection technology, it connects your business to the local telephone exchange or the Point of Interconnection,
- Backhaul – from there, the exchange or PoI, your data is carried across optic fibre networks to the world wide web, allowing you to do what you need t do.
That sounds all rather simple, well the first part is, this is usually a fixed cost with the carrier, the backhaul is where things aren’t so simple. Let’s say a service provider has 10 subscribers on a 400Mbps bandwidth. The simple calculation would be to have 10 x 400 Mbps of backhaul, so 4 Gbps of bandwidth right? No. Why? Backhaul isn’t cheap. With backhaul ranging in price from $35 / Mb to $100 / Mb, depending on location, a service provider could be paying as much as $400,000 a month for backhaul to support just 10 customers on a $500 per month service. That’s not economically viable.
How does as service provider reduce the cost? Contention.
Like a highway isn’t designed to be able to give one lane to every car on the road all the time, backhaul is shared across a service providers subscribers. This is called contention.
So, while your business may be looking at the speed quoted in advertising, the more important question is, how cheap do you want your internet? The cheaper generally means the more contention. Going back to that highway, how many cars do you want on the road with you at the same time?
Unfortunately, most carriers won’t disclose what level of contention your service is actually on, giving you broad based adjectives instead of facts.
What level of contention is suitable for your business? This comes down to what you are actually using your broadband connection for. Say you are a light user, with just 100 GB of data a month, this would equate to roughly 0.3 Mbps, if it was constant use averaged over the month. Say you are a higher user downloading or uploading videos, CAD files, using cloud based servers or programmes then you don’t want to have your staff sitting there waiting for something to download or send at 0.3 Mbps right?
Is there a middle ground? How do you know that what you buy will do what you need when you need it most? How do you figure that out before you have signed that 12, 24 or 36 month contract? That’s not so simple.
Let’s look at the contention ratios. This is basically the theoretical maximum bandwidth, divided by the actual bandwidth provided. The lower the contention ratio the better for your business. Problem is, contention ratios are not being disclosed by service providers to subscribers. Depending on the product contention ratios can range greatly, with some as high as 400:1, a good provider might be as low as 200:1 or 100:1, an excellent provider may be as low as 20:1. The simplest indicator of high contention? Low price.
When making a decision for your business, it really does come down to quality versus price.
If you would like to know what broadband products are available to your business, and more importantly, which business grade data solutions will allow your business to do business, Get in Touch with us and we can perform a quick service qualification on your premises and find the right broadband solution to build the foundation for your business to reduce telephony costs, and access the benefits of the cloud.