Australians overpay for internet speeds, says SpinTel study

Research conducted in Australia indicates a significant portion of internet users are potentially missing opportunities for cost-saving measures by not considering slower internet speeds.

According to the SpinTel study, which surveyed more than 1,000 Australians, including over 830 internet decision-makers, 70% of respondents expressed an unwillingness to choose slower internet speeds. This reluctance persists despite 37% of consumers actively searching for better deals on their internet plans in the past six months.

The study found a prevalent misunderstanding about internet speed, as over a third of users indicated they do not understand what Mbps (megabits per second) means. This confusion contributes to consumers selecting internet plans that do not match their actual usage needs.

Liam Bal, Chief Executive Officer of SpinTel, explained that the perception of "higher speed equals a better online experience" leads many Australians to spend more than necessary. "Better transparency around how much internet speed is actually required for everyday activities could help customers save money and make more informed choices," said Bal. "Most consumers don't realise that a slower speed, at a reduced cost, can easily meet their needs while saving money."

Bal further illustrated the financial impact of misconceptions surrounding internet speeds. "For example, a household with 1-2 people streaming, video conferencing and browsing would have a great experience and ample speed with a 50Mbps plan, yet 70 percent of consumers think the faster the better, and pay up to $50 per month extra for speed they don't require," he noted.

The research also revealed that 31% of internet decision makers are ready to switch service providers for slight price reductions, while an additional 22% are contemplating such a change. Conversely, 41% have continued paying their bills without considering alternative providers.

Notably, only 3% of those surveyed were unaware of the amount they're being charged for telco services, indicating Australians are attentive to household expenses.

Contractual obligations present another challenge, as over 20% of decision-makers express dissatisfaction with their current provider. Of these, 64% indicated they would switch providers for a small price reduction if not for their contractual commitments. More than half (54%) feel constrained by contract restrictions.

There are also significant security concerns, with 28% of decision-makers worried about personal data loss and 49% apprehensive about potential hacking incidents. These concerns affect the decision-making process for switching providers or bundling services, as many remain uncertain about the security measures offered by providers.

The study highlighted common internet activities, revealing that the majority of users engage in browsing (94%), online shopping (88%), and social media (83%). However, activities requiring specific bandwidth, such as Zoom calls (41%) and gaming (47%), indicate that a greater understanding of internet usage could lead to better-informed, cost-effective plan selections.

Another potential cost-saving measure is bundling telco services, though 40% of respondents do not currently bundle due to confusion or a lack of trust, thereby missing out on possible savings. Many consumers feel uncertain about consolidating services, concerned about losing control over individual utilities.

Bal advocated for more flexible internet plans with no lock-in contracts to accommodate changing household needs. "Internet providers have a clear opportunity to alleviate confusion and build trust with consumers. Providing better transparency and education on what speeds are actually needed for daily activities can help customers save money and feel more confident in their choices," said Bal.