
Ask HN: Why is hosting in Australia (and New Zealand) so crazy expensive? - mingabunga
I have a dedicated Xeon server in Australia with 20TB monthly bandwidth allowance, costs about US$315 a month - this is cheap. I think I got lucky because I went to get another, my 20TB bandwidth now costs US$1550 a month. Looking around for a VPS, found 200GB allowance a month for $60, but each extra GB over is $1. So it seems the bandwidth is expensive compared to Europe where they&#x27;re just giving it away. What gives?
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CyberFonic
Our office is in Sydney. It's not as expensive as you make out. You do not
need to rent in a CBD high-rise. Whilst some VPS are expensive you can shop
around. We use AWS & Google hosting - only about 10% more than USA. You have
to shop around for good prices for internet access. Most mobile phone plans
provide ample access at reasonable cost. Home ADSL is around $70 / mth for
unlimited access.

Most phone boxes provide free WiFi as do MacDonalds, StarBucks, etc. But with
4G & LTE on your phone, you generally don't bother.

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tomcorrigan
Essentially Telstra (the biggest ISP in Australia) charges a fortune for
transit. Cloudflare provide some detail about the relatively high cost here:
[https://blog.cloudflare.com/the-relative-cost-of-
bandwidth-a...](https://blog.cloudflare.com/the-relative-cost-of-bandwidth-
around-the-world/)

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fratlas
Do you think Australian ISP services is a market that could be disrupted? As
an Aus, I would love Google to come through and strongarming Telstra into at
least rethinking their inflated prices.

~~~
levinet
Definitely could, but they'd need to lay their own international cables --
PIPE Networks (owned by TPG) is the closest we've got to a market disruptor
and they can only compete because they have their own undersea cables.

Given the low total population and very low population density it's probably
not really worth it though.

~~~
Gustomaximus
As a general comment, I hear this 'low population density' about Australia a
bunch. I wonder if its a fallacious argument for many business cases.

Contrary to the Crocodile Dundee image, Australia is one of the most urbanised
nations in the world. We have almost 50% of the population in Sydney &
Melbourne alone, and our top 10 cities takes this to almost 90%. While a big
landmass you can reach a high proportion in relatively few spots. Assuming a
business doesn't expect infrastructure/coverage for the entire population
Australia not to bad density.

Obviously the general remoteness of Australia and 25m population remain big
factors, and I suspect this is more relevant than the often cited density
issue.

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thenomad
A workaround: I tend to rent servers in Singapore when I need to address the
AU/NZ market. They're considerably less expensive and the latency's still
pretty good.

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bobby_9x
Everything is more expensive in Australia. A large social net, a minimum wage
> $20USD, and other high taxes, leads to rising costs of most goods and
services.

I went there 2 years ago on vacation and stayed in hostels (which were
$70USD/night) to save on price. Meals at most restaurants for 2 was $50+ and a
20 oz of coke and a small bag of chips cost me close to $11USD.

Internet was more expensive than anywhere I traveled. Free wifi was almost
non-existent and most hostels charge $25USD/8 hours (it was also ~4MB).

It's probably why they don't have a flourishing startup scene.

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ojm
Are you trying to be the 'typical' American who portrays 'facts' about other
countries that are nothing of the sort?

Minimum wage is AUD 17.29 per hour, not the AUD ~28 you quote. A hostel at
Bondi Beach is ~ USD 50 per night, not the USD 70 you quoted (and this is an
expensive spot!). I can only think you must have visited when the USD was down
the toilet.

On the hostel charging USD 25 for 8 hours. You can get a 4G sim card with with
50mbps+ download and 5GB limit for AUD 30ish.

But yes, everything is more expensive, generally. The dollar fluctuations
makes it interesting. Also, sales tax is included in our prices unlike the US.

~~~
bobby_9x
"Are you trying to be the 'typical' American who portrays 'facts' about other
countries that are nothing of the sort?"

The facts are that Australia has high taxes and is much more expensive than
the US. The numbers I gave might not be 100% accurate, but it's still a fact.

"Also, sales tax is included in our prices unlike the US."

I would rather have sales tax separated. Why? I've seen so many people
bitching about why certain products are more expensive in Australia, and
commonly blame the company.

In reality, they should be blaming the government. Merging the prices allows
politicians to raise taxes without the citizens actually knowing the true
amount.

The same thing happens with the gas tax in the US. So many people bitch about
the cost, yet have no idea that taxes account for a big portion of it.

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allendoerfer

       I would rather have sales tax separated. Why? I've seen so many people bitching about why certain products are more expensive in Australia, and commonly blame the company.
    
       In reality, they should be blaming the government. Merging the prices allows politicians to raise taxes without the citizens actually knowing the true amount.
    
    

This is not true. If you sell to consumers in Germany, you have to add the
sales tax in your prices, too, but you also have to give out an receipt that
shows the tax rate and amount. I believe it is the same in Australia. The
consumer knows the tax rate and he does not have to calculate the price he is
paying.

If you sell to businesses only, you do not have to add the tax in your prices,
but you have to give out this receipt, too.

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levinet
Few simple answers off the top of my head:

Electricity is generally more expensive in Australia than US/Europe

Internet (consumer and business) is more expensive, huge area to cover with
low population density

Most DCs are located in Sydney and Melbourne where rent/land and other costs
are a lot higher than less populated parts of the country

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mingabunga
Ok, I can understand the price of renting the box, but bandwidth seems
unreasonably expensive.

~~~
levinet
Local bandwidth in Australia is generally more expensive than Europe or USA
because we have a huge area to cover and a relatively low population. Also
because of this the infrastructure that does exist is held by a handful of
companies who can pretty much dictate the price.

International bandwidth is hugely expensive in Australia, everything goes by
expensive undersea cables. While both the US and Europe have bordering
countries where most of traffic is likely to go. Also similarly with local
infrastructure, it's all owned by just a handful of companies who can strong
arm providers.

Also in reference to your original question, it sounds like the VPS provider
your using doesn't separate local vs. international traffic, so they're
probably assuming most of it will be international and are charging on the
higher end of the scale.

I think BinaryLane charges a bit less at around $1 per 10GB. There's probably
cheaper providers out there but YMMV.

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joshschreuder
> International bandwidth is hugely expensive in Australia, everything goes by
> expensive undersea cables

I have heard this quite a bit, but _why_ is it hugely expensive for this
reason? Is it because of the maintenance of the undersea cables or recouping
initial construction costs?

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NeutronBoy
It just all adds up:

\- First world, bandwidth hungry nation.

\- Low population to recoup costs from.

\- Very low population density so transit across the country isn't super
economical (related to above)

\- Expensive to build transit because it's all underwater cable, no easy
cross-border land-based fiber.

