Why is mobile broadband costlier than wired broadband?

Date Oct 5, 2020
Blog category Broadband
Blog category Mobile Phone
By Staff Writer

Mobile broadband has become an extremely popular way to connect Kiwis, and it has also become more affordable over the years. Compared to wired broadband, however, it’s still way more expensive even amongst the cheapest offerings of the leading providers in New Zealand.

So, why is it so expensive? Turns out, there are a lot of reasons why mobile broadband is costlier than your home broadband – and they’re pretty reasonable. Check out some of these in this blog...

Mobile broadband is more expensive to roll out

New Zealand has been connected through a series of wires. That's why getting a wired broadband is generally cheap even in rural areas. However, this isn’t the case with mobile broadband.

Mobile broadband delivers internet through cell towers, with limited coverage ranging from 50-200kms only. As mobile broadband providers need to install more cell towers to cover a wider area throughout the country, they need a bigger budget to finance installation, manpower, logistics, and more.

The maintenance fees of these towers are more labour intensive as well – adding up to the costs of your mobile broadband plan.

Licencing costs over radio frequencies

Mobile broadband connects you to the internet through a wide range of radio frequencies – and these frequencies aren’t free!

Mobile providers acquire these frequencies through a bidding process auctioned by the government. After acquisition, they need to register and get a licence to operate their business on these frequencies. With this process, it’ll cost them millions, if not billions of dollars, first before they can finally use these radio waves.

To reciprocate their expenditures, customers often shoulder the costs – making your mobile broadband plan expensive.

Building newer infrastructures across New Zealand

With every introduction of a new mobile generation, mobile broadband providers also need to build new infrastructures to support it – that’s where costs add up!

For your 5G-capable phone to work effectively, you need to get 5G speeds from your mobile service provider. For your mobile provider to deliver these signals, they need to build new 5G cell towers in both urban and rural districts across New Zealand. As the country has rough terrain, it can be costly to build these towers, especially in jungles and mountains.

To fund their building of newer infrastructures, customers may need to pay extra costs. In return, however, they get to take full advantage of the technology in their latest devices.

Additional expenses to use patented technology

Every technology is protected with intellectual property rights, so using it legally may require you to pay them. That’s exactly what’s happening with mobile broadband!

For example, 5G technology is patented by Qualcomm, Samsung, Nokia, Huawei, Ericsson, LG to name a few. Whenever mobile providers use their technology to deliver 5G connectivity, they need to pay a fee to these companies for lending their work. This also applies whether your provider uses 4G, LTE, 3G, and even 2G – they always need to pay.

To keep you servicing with these technologies, you have to pay for it  – which is what reflects in your mobile broadband billing!

Mobility and coverage is the name of the game

Even the convenience of mobility and coverage has a price – and that’s true with mobile broadband in New Zealand.

Unlike a wired broadband that requires you to be close to the router all the time, mobile broadband works just fine even if you’re in a remote area. This benefit of readily accessing the internet – whenever you want and wherever you may be – is one of the biggest reasons why mobile broadband became popular amidst the high prices.

However, as mobile broadband providers keep on developing efficient technologies to lessen the burden of customers, mobile broadband plans are only going to get inexpensive and packed with features.

If you’re looking for an affordable mobile broadband plan that ticks all the right boxes, use our broadband comparison tool to get tailored results. Switch to a better NZ mobile provider with CompareBear today!