With construction of the nbn network more than 80% complete, NBN Co has stepped up efforts to deliver the benefits of fast broadband to more Australians and find new, cost-effective ways for Retail Service Providers (RSPs) to upgrade those already connected to higher speed plans.
NBN Co recently released a Wholesale Pricing Review Consultation Paper to the more than 50 RSPs selling nbn plans to residential and business customers, and special interest groups such as ACCAN. The paper seeks industry feedback and suggestions on how new wholesale pricing and discount constructs may be used to encourage greater take-up of nbn services by under-represented, price-sensitive segments of the market such as low-income earners and older Australians.
Chief Customer Officer Residential at NBN Co, Brad Whitcomb, said: “We’re working collaboratively with RSPs to develop new nbn wholesale price and discount options and bundle discount inclusions that will deliver a better customer experience to more Australians, and meet their changing needs.
“As part of this process, we’ll be balancing the economics of our wholesale pricing structure with the commercial imperatives of RSPs, and the very reasonable expectations of residential and business customers around product affordability and choice.”
The Consultation Paper is seeking industry feedback on five key areas:
- lifting take-up in under serviced consumer segments;
- promoting higher speeds;
- improving support for RSPs in the face of increasing demand for broadband;
- creating a regular cadence for future pricing consultations; and
- making it simple and easy for RSPs to do business with NBN Co.
Whitcomb continued: “As part of our review, we will be seeking feedback on the pricing and discount constructs across our business. We want to provide RSPs with simple wholesale pricing bundle discounts, which will offer them greater flexibility to construct differentiated retail products to better service their customers’ needs.”
Following the last industry consultation in 2017, Whitcomb said, nbn broadened its menu of pricing options and introduced its popular Bundles Discount program, adding: “Our Bundle Discount program was well received by RSPs and enabled them to pass on real benefits to customers in the form of higher speed plans at more affordable prices.
“At the introduction of Bundle Discounts last July, we reduced the effective price for our 50 Mbps wholesale speed from around AU$60 to $45, and the affordability of basic services was improved with the introduction of the $22.50 Entry Level Bundle Discount.
“Today, 63% of customers are on speed tiers of 50 Mbps or above, up from 16% in 2017. Customers on the speed tier of 50/20 can expect to receive actual download speeds in the range of 25-50 Mbps. Our new consultation process seeks to deliver changes to the cost and delivery of nbn services to Australian customers, to deliver high quality services so no one gets left behind.”
NBN Co recently announced several wholesale price-related changes that will take effect shortly, while stating it is considering introducing a new 100/20 wholesale product. The new speed tier recognises that most residential customers download far more than they upload and a new product that prioritises download with an associated new wholesale bundle discount may help them to avoid paying a price premium for relatively high upload speeds that most customers do not use or require.