ACCC report shows telco data caps nudging customers towards unnecessary but more expensive connections

In the eyes of Australia’s telcos there are only two customers: those who don’t download anything from the internet and those who download all of it.

The majority of Australians are paying too much for their internet by being nudged towards more expensive bundles by restrictive data caps suggests a new report from the consumer watchdog.

The Australian Competition and Consumer Commission has released its internet Activity Report for the month of June, finding that the majority of us have now connected to the NBN, and one plan is significantly more popular than the others.

Almost 3 million customers are connected to the 50mbps tier of the NBN, the second fastest plan available.

That number is almost double the amount connected to the lower two tiers combined, and represents 60 per cent of total connections.

The 50mbps speed tier of the NBN has proven itself the most popular with consumers.

The report also revealed that the average NBN customer downloads 236GB of data per month.

But the telcos who purchase access to the NBN to sell on to their customers aren’t providing enough variety for “value” offerings, forcing people onto higher priced “unlimited” data plans.

While the “average” NBN consumer is on a 50mbps connection and downloads 236GB of data a month (this average is dragged down by those on lower speed tiers and the average for 50mbps connections is actually 270GB), most RSPs only offer unlimited data allowances for the most popular connection speed.

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The telcos that offer data-capped connections in an attempt to provide better value at that speed aren’t even cheaper than some of the unlimited bundles.

A spokesperson for NBN Co said the issue had nothing to do with their wholesale pricing structures.

“Our wholesale pricing structure is made up of an access charge and a capacity charge. Any download limits on broadband plans are set by retailers so they can tailor plans to suit their customers’ needs.”

“We intentionally do not dictate how plans should be sold or structured to ensure retailers can create their own retail value proposition.”

A Telstra spokesperson told news.com.au the company had two plans for home broadband customers to choose from, “which have been designed to give customers a choice of speeds and included data”.

The two plans are a 50mbps connection with an unlimited data cap for $90 a month, or a 25mbps connection with a 200GB data cap for $75 a month.

The average data usage on a 25mbps plan was 111GB a month according to the ACCC report, compared to 150GB a month on the lowest speed 12mbps basic connection.

At the end of 2017, NBN Co changed its pricing structure so that 25mbps wholesale bundles were the same price as 50mbps wholesale bundles.

Around this time, many users moved to 50mbps bundles, while others dropped down to the value offering of 12mbps.

This could go some way to explaining why the basic plan has a higher average monthly download than the 25mbps plan, as heavy downloaders who wanted more speed jumped to the next tier at no extra cost.

Teresa Corbin shortly after being appointed CEO of the Australian Communications Consumer Action Network almost 20 years ago.

Those who remained on the 25mbps plan likely weren’t heavy downloaders craving more speed and may have only stayed on the slower speed but same priced tier out of sheer ignorance.

While several telcos offer capped data plans on the basic 12mbps, most of the caps don’t come close to the average download for that connection, topping out at 100GB before making an expensive leap to 500GB or unlimited data caps.

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Australian Communications Consumer Action Network (ACCAN) CEO Teresa Corbin told news.com.au a lack of a variety in the plans offered was hurting consumers.

“The pricing models of our internet service providers don’t acknowledge that one-size-fits all products don’t suit every consumer,” she said.

“For example, most entry-level broadband plans start at around $60 per month. For some, this price point is fine. However, we know that Australia’s poorest households pay three times more of their income to stay online than their more fortunate counterparts.

Ms Corbin said this demonstrates that flat-level pricing isn’t always the solution.

ACCAN is calling for a concessional NBN product that would allow households on income support, such as pensioners, to access unlimited data for as low as $30 a month.

Other telcos contacted for comment on this issue didn’t reply even hours after the advised deadline.

An NBN Satellite launched into space in 2016 to deliver wireless internet to remote areas.

NBN RENEWS “COMMITMENT” TO REGIONAL AND RURAL AUSTRALIA

The ACCC report comes on the same day the company responsible for delivering the national broadband network that was meant to bring quality internet connections to rural and regional Australia announced a brand new plan to bring quality internet connections to rural and regional Australia, eight years after the first regional centre was connected.

NBN Co has officially launched a new unit inside its business “solely focused on meeting customer needs and raising the digital capability of regional and remote communities across Australia”.

For customers in the cities the announcement means very little, but for rural and regional customers, which NBN Co said account for 48 per cent of all data consumed on the network, it does promise some improvement.

Gavin Williams has been announced as the man who will head up the new regional and rural focused business unit of the NBN.

NBN Co’s freshly minted chief development officer, regional and remote Gavin Williams said the new plan showed the company was “committed” to regional Australia, where it “has already delivered significant benefits”.

“We are absolutely committed to providing even greater access to broadband services throughout regional and remote Australia,” Mr Williams said.

The new unit within NBN Co will amalgamate several others working across fixed wireless and satellite connections.

Armidale was the first region connected to the NBN, beginning in 2011. It was also the first to be fully switched to the network after the last “legacy” connection was switched off in January 2016.

Armidale residents will likely note little difference from the new NBN changes to fixed and satellite wireless connections as the majority in the area are fixed-line connections from the early rollout of the NBN, which was then changed to a “multi-technology mix”.