Calculate monthly internet cost per Mbps using the full price and fees, or solve for the plan price or download speed needed to reach a target value.
Internet Cost Per Mbps Formula
Add all recurring monthly charges not already included in the plan price, then divide by advertised download speed. Amounts are in USD; blank optional fees mean zero, and blank or zero upload speed omits the upload ratio:
CPM = (P + F) / D
To find the highest advertised plan price that meets a target cost per Mbps:
Pmax = CPMt * D - F
To find the download speed required for a target ratio:
D = (P + F) / CPMt
Variables:
- CPM is monthly cost per download Mbps
- P is the advertised monthly plan price
- F is the total recurring equipment fee, other fee, tax, and surcharge amount
- D is advertised download speed in Mbps
- Pmax is the maximum advertised price that meets the target, rounded down to cents
- CPMt is the target monthly cost per Mbps
The same formula can be applied to upload speed by replacing D with advertised upload Mbps. Keep download and upload ratios separate because they measure different parts of the service.
Internet Cost Per Mbps Examples
The table compares simple plans before equipment, taxes, and other recurring fees. Lower cost per Mbps indicates more advertised download capacity for each dollar, but not necessarily better overall service.
| Monthly price | Download speed | Cost per Mbps | Annual cost |
|---|---|---|---|
| $40 | 100 Mbps | $0.4000 | $480 |
| $55 | 300 Mbps | $0.1833 | $660 |
| $70 | 500 Mbps | $0.1400 | $840 |
| $90 | 1,000 Mbps | $0.0900 | $1,080 |
A $15 equipment rental added to the 500 Mbps plan raises its total monthly cost to $85 and its cost per Mbps to $0.17.
Example Problems
Example 1: Calculate cost per Mbps.
A 500 Mbps plan advertises a $60 monthly price. Equipment costs $10, other fees are $3, and taxes are $2. Total monthly cost is $75:
CPM = $75 / 500 = $0.15 per Mbps.
Example 2: Find the plan price allowed by a target ratio.
A customer wants no more than $0.12 per Mbps on a 1,000 Mbps plan. Recurring fees total $18. The maximum advertised service price is:
Pmax = $0.12 * 1,000 – $18 = $102 per month.
Frequently Asked Questions
Is a lower cost per Mbps always the better internet plan?
No. It measures advertised speed value only. Reliability, latency, upload speed, data caps, installation quality, customer service, contract terms, and whether the household can use the extra speed can matter more.
Should equipment rental and taxes be included?
Yes, when they are recurring and required for the service being compared. Otherwise a low advertised price can make a plan look cheaper per Mbps than the amount actually paid each month.
Should I use advertised speed or tested speed?
Use advertised speed to compare offers on equal terms. Use a representative tested speed to evaluate the value actually delivered at a specific home. For tested speed, average several wired tests at different times rather than relying on one Wi-Fi result.
