In what it describes as ‘dramatic discounts on its top-tier internet access plans’ NBN Co has unveiled a new lower cost wholesale pricing structure for retail service providers. Some welcome the move, while political critics have labelled the announcement as a capitulation.
The changes – which apply to the company's fixed line access network and come into effect in the second quarter of 2018 – mean that for the first time NBN Co will bundle together access and bandwidth charges for its higher speed plans under a simple pricing structure.
NBN Co plans to introduce a new nbn 50 wholesale bundle charged at $45 a month with 2Mbps of bandwidth included and a new nbn 100 wholesale bundle at $65 a month with 2.5Mbps capacity included.
Previously, the static access charge and the fluid capacity charge made up a two-part pricing model that had seen some retailers under-provision bandwidth, which was impacting end user speeds during peak download times.
According to NBN Co, the new plans include nearly double the current average capacity being purchased by retailers across all nbn fixed line services today and will help entice retailers and end users to move up the speed chain.
NBN Co says, “the changes are expected to also result in significant savings for NBN Co’s wholesale customers with the new nbn 50 bundle representing a potential discount of 27% while the nbn 100 bundle could save retailers 10% when compared to current average prices across the industry.
“Included bandwidth on these new packages is just the minimum, meaning retailers can continue to purchase additional capacity as demand increases for $8 per megabit per second per month, a 40 per cent reduction.”
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In addition, NBN Co has gone in hard to immediately replace its 25Mbps service with a new 50Mbps offering at the same price.
“Until the new pricing structure goes live and to help transition retailers to the new pricing options, NBN Co is also introducing a promotion that will see the nbn 50 wholesale service sold for the same access price as the nbn 25 service with a boost of 50% additional bandwidth,” NBN Co says in its statement.
NBN Co has also announced plans to introduce a lower cost of entry-level wholesale bundle “to ensure retailers committed to voice-only and basic broadband access customers are not left behind.”
“The new voice-only and low usage access plans will come with an included 50kbps of data, which is enough to cover a basic telephony service. This means retailers servicing telephone-only and basic internet users can purchase the new nbn 12 bundle for a wholesale charge of just $22 per month, which represents a potential discount of around 8% on the current entry-level plan.”
Early responses from retail broadband providers have been positive, with budget provider Amaysim saying it will enable RSPs to offer better services for no additional cost, while RSP heavyweight TPG has already announced a 50Mbps service.
However, Labor shadow communications minister Michelle Rowland labelled the new NBN Co announcement a capitulation.
“In a troubling sign that confidence in Turnbull’s multi-technology mix is further deteriorating, NBNCo has reduced its wholesale prices,” Rowland said.
“Let's face it: if you have a second-rate product in which consumers have little confidence, you may as well discount it.”
More details on the pricing options are outlined in the nbn blog.