Australia has the most expensive internet in the world because big players Telstra and Optus are so powerful they can charge huge rates, an internet security company claims.
In its analysis of worldwide bandwidth pricing, CloudFlare said costs across Australia and New Zealand were 17 times more than its benchmark of Europe.
According to the company’s figures, this made the region pricier than Africa and on par with South America for the world’s worst.
Chief executive Matthew Prince said this was largely down to the two companies, which he named among the world’s six most expensive internet service providers.
Telstra and Optus, which controlled about 60 per cent of the Australian internet market between them, were joined by HiNet, Korea Telecom, Telecom Argentina, and Telefonica.
It said they accounted for half its bandwidth costs despite being only six per cent of its traffic.
Bandwidth is a measure of how much data can be transported across the internet in a given time, and users must pay a fee set by the ISP for using its network to do so.
CloudFlare provides security and reverse proxy services to protect, speed up, and improve availability for four million websites and mobile applications – which it said gave it an insight into global pricing standards.
Mr Prince noted prices in Australia had improved in the past two years since the U.S-based company’s last analysis in 2014, when they were 20 times more expensive than Europe.
|Company||$AU per month|
|Telstra||$115 (not unlimited downloads)|
|Time Warner (US)||$59|
In that report, he blasted the country’s pricing regime as ‘out of whack’, and claimed the company paid as much in Australia as Europe, despite having 33 times fewer people.
‘If Australians wonder why Internet and many other services are more expensive in their country than anywhere else in the world they need only look to Telstra,’ he said.
‘What's interesting is that Telstra maintains their high pricing even if only delivering traffic inside the country.
‘Given that Australia is one large land mass with relatively concentrated population centres, it's difficult to justify the pricing based on anything other than Telstra's market power.
‘In regions like North America where there is increasing consolidation of networks, Australia's experience with Telstra provides a cautionary tale.’
Telstra at the time disputed the company’s assessment of its pricing, telling ZDNet‘[the] figures are factually incorrect and are far in excess of Telstra's actual charges… they are overstating our charges by a factor of ten’.
Companies like CloudFlare, as well as other ISPs, often reduce their costs by allowing each other’s data to move through their networks for free under the assumption it will all even out – a process known as peering.
Mr Prince said Telstra, Optus and the other four providers refused to do this, which he claimed forced up costs both for his company and ordinary consumers, as well as the ISPs themselves.
‘Ironically, this actually increases the cost to several of these providers because they now need to backhaul traffic to another CloudFlare data centre and pay more in the process,’ he said on Thursday.