Australia’s Expensive Bandwidth

Australia’s Expensive Bandwidth

Bandwidth prices in Australia continue to be extremely high in relative terms, costing 17 times the benchmark from Europe says CloudFlare.

Broadband users in Australia aren’t the only ones who suffer the effects of bandwidth prices that are higher than in many other countries; it impacts throughout the chain. For example, Content Delivery Networks (CDNs).

CloudFlare protects web sites and accelerates page load times traffic through routing traffic through its global network. It’s grown rapidly over the years and now works with 4,000,000 web properties in 45 countries. As well as premium accounts, it also offers free services.

As you can imagine, it uses a lot of bandwidth to provide its services. CloudFlare buys bandwidth, known as transit, from a number of different providers. The price varies from region to region and the company has been using this information to track the cost of bandwidth around the world.

Last month, Cloudflare provided an update on these costs and surprise, surprise – bandwidth prices in Australia were among the highest.

Bandwidth costs

While Cloudflare says it has been able to negotiate reasonable transit pricing or settlement-free peering (where networks are connected directly) with the vast majority of the world’s networks, there are a number of hold-outs.

The company lists six networks globally that are more than an order of magnitude pricier than other providers and two of them are Australian – Telstra and Optus.

Cloudflare says these half-dozen networks represent less than 6% of the traffic but nearly 50% of its bandwidth costs.

“While we’ve tried to engage all these providers to reduce their extremely high costs and ensure that even our Free customers can be served across their networks, we’ve hit an impasse,” says Nitin Rao, Special Projects.

As a result of this, Cloudflare has made some changes that will increase the cost to several of these providers. In the case of Telstra, it will now need to backhaul traffic via expensive undersea cables. Under a peering arrangement, Telstra would only need to transport traffic over about 30 meters of fiber optic cable between Cloudflare and Telstra’s adjoining cages in the same data center.

The company is urging Australians to contact Telstra and Optus regarding the situation.

“Their behavior is irrational in any competitive market and so it is not a surprise that each of these providers is a relative monopolist in their home market,” says Mr. Rao of the “expensive six”.

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