‘Modem mayhem’: Why millions may miss out on NBN’s big speed upgrade

Australians are on the cusp of a major internet speed upgrade, with government-owned telco NBN Co set to accelerate broadband plans significantly from September 14.

But a looming issue threatens to turn this anticipated boost into “modem mayhem”, as many households have outdated Wi-Fi equipment incapable of handling the faster speeds.

NBN Co chief executive Ellie Sweeney said it was the “biggest challenge” around what the government-owned telco has dubbed “Accelerate Great”.

“Across the board, we have customers who may not have changed out a modem for 10 years,” she said.

The widespread use of ageing hardware means that while the NBN network is “built to be able to deliver for that uplift”, the actual user experience could be significantly hampered.

It presents a big hurdle to the economic boost, which Ms Sweeney has touted could be hit as high as $400bn by 2030 from the higher internet speeds.

“I’m confident in our network. What I am definitely looking to continue to work on is, how do we help educate Australians around their in-home experience and optimising that as well,” Ms Sweeney said.

From September 14, NBN will lift its 100Mbps plan to 500Mbps. It will also launch its first “mass market multi-gig speed tiers”, offering consumers 2000Mbps plans.

But Andrew O’Connor, TPG’s general manager of fixed line, warned of a disconnect between advertised speeds and real-world performance.

“The risk is people are going to be paying for these high speeds, but they’re not going to experience it because their hardware is out of date,” Mr O’Connor said.

For example, he said Wi-Fi 4 routers, released 16 years ago, were limited to a maximum download speed of 100Mbps, making them insufficient for the 500Mbps wholesale speeds now being rolled out.

It is difficult to identify whether a modem is compatible. Wi-Fi 6 or above should be able to handle faster speeds, but the generation of modem is not often labelled on devices.

The problem isn’t just old modems. Even newer, high-spec Wi-Fi 7 modems suffer from signal propagation issues within homes, Mr O’Connor said.

“As soon as you get one or two rooms away, the signal drops significantly, particularly in larger or multi-storey residences, or depending on wall materials.”

This means that an 8K TV, for example, could still be pixelating despite a fast NBN plan.

Compounding the issue is a significant consumer misunderstanding about Wi-Fi responsibility. Mr O’Connor said TPG’s commissioned research, which found that more than 80 per cent of Australians believed telcos were responsible for Wi-Fi strength.

“Our research showed that only about 13 per cent of customers believed that the Wi-Fi signal responsibility was their own responsibility. The remainder thought it was either a shared responsibility with the RSP (retail service provider) or solely the RSP is responsibility.”

This expectation gap contributes to frustration, with Mr O’Connor saying that “Wi-Fi complaints are probably one of our biggest complaints about things”.

“And that’s what drove us to really view the next level of customer servicing isn’t just about getting the connection into the house. It’s about then sending that signal around the house in a way that a customer can use it in every room.”

To truly unlock the potential of these accelerated speeds across an entire home, consumers may need to invest in Wi-Fi mesh systems, an additional cost that can range from hundreds to thousands of dollars.

In response to this looming challenge, some providers are taking proactive steps. Mr O’Connor said that TPG’s flagship brand Vodafone was now bundling Wi-Fi 7 modems and a first mesh unit with new NBN and 5G Fixed Wireless Access orders.

“We’re including a Wi-Fi 7 modem and the first mesh on all of our new customer plans, just so that we really draw that appeal and that great customer service from day one, when they connect it up,” he said. TPG is also proactively informing customers with outdated modems about their options for upgrading to compatible equipment.

A Telstra spokesman said: “We’ll be passing on NBN Co’s new internet speed upgrades to customers on eligible plans and technology at no extra cost.

“It’s a good idea to check if you have the right type of NBN connection and hardware (including modem and cabling) before they hit the accelerator.

“Customers can check our website to see what plan and tech type they’re currently on and if they’re eligible for a free fibre upgrade, which could allow them to take advantage of the new speeds.”

This article first appeared in The Australian as Australians risk paying for internet speeds they can’t get from NBN’s looming upgrades