Increased competition could see NBN prices slashed in the coming months

NBN customers have long complained about paying high prices for modest internet speeds, but a few factors give the impression that is about to change.

AUSSIES could soon pay a lot less for access to the National Broadband Network, following a fresh wave of pay cuts as competition for customers drives prices down.

After numerous customer complaints about paying high prices for modest internet speeds, Vodafone has slashed the price of its NBN plans by as much as $25 a month, with telecommunications experts expecting more internet providers to follow suit.

Customers who sign up before a March 25 deadline will be able to save $25 per month of the company’s 50 megabit per second plan, which will now cost $70 per month.

The top-speed 100mbps plan has slashed by $15 to make the cost $95 per month, while Vodafone’s most basic 12mbps plan has been cut by $10 to $60 per month.

Vodafone fixed general manager Matthew Lobb said the prices were designed to give customers a better experience and to challenge existing NBN providers.

“As a new player, we have the flexibility to launch new offers, promotions and products that will give people switching to the NBN real value combined with peace of mind,” he said.

National Broadband Network CEO Bill Morrow. (AAP Image/Mick Tsikas)

Vodafone’s price-cuts follow NBN Co announcing it would drop the wholesale price of some of its plans for 12 months to encourage more users to adopt higher speed plans — more than 80 per cent of NBN users currently have services offering only 25mpbs per second or less.

The changes would see 50mbps plans cut by 27 per cent to $45 and 100mbps plan cut by 10 per cent to $65.

NBN Co chief executive Bill Morrow said the discounted plans would also include additional capacity to prevent slowdowns during peak times.

“Without affordable higher speed plans, many end-users aren’t seeing the true potential of the NBN access network. Customer satisfaction levels fall if expectations of the ‘NBN experience’ aren’t met,” he said last December.

While there are no guarantees the discounts would be passed on to consumers, retail giant Ruslan Kogan has confirmed he will be offering competitive prices when he launches his own Kogan.com NBN service in the coming months.

“With the NBN, we are in a position where we have all these telcos with fixed infrastructure that have had capital expenses building out networks over the last few decades — all of that just becomes meaningless,” he told news.com.au.

“Everyone gets to buy at the same price from NBN and it becomes a customer acquisition play: Who can acquire customers the cheapest?”

As Kogan already has a brand with a huge customer base, he believes the cost of acquisition would be very cheap for him, which means good pricing for customers.

“As a result, we can pass these savings onto the customer and build an even more compelling offering,” he said.

“It’s basically a government-mandated switchover of a huge utility that people want, need and are using more and more of, and we will have an incredibly competitive price on it.”

Kogan said the prep work for his NBN service is currently in motion and will launch off the back of Vodafone Australia’s network access.

“Most of the prep work is in Vodafone’s court, so they are obviously launching an NBN service themselves which they’re currently rolling out, and we’re going to have parity of service with our product that will be through the Vodafone network, everything going through the same pipes,” he said.

Kogan.com will be launching its own NBN service in the coming months.

Telecommunications consultant Paul Budde believes there will be price drops from other providers over the coming months, with offers from the likes of Vodafone and Kogan forcing greater competition.

He said customers show no loyalty with NBN providers as they are just chasing the fastest speeds for the lowest cost — something that goes against previous telco comments suggesting Australians did not want high-speed internet access.

“It’s like saying people in Australia don’t like Rolls Royce cars. No, it’s that they can’t afford Rolls Royce cars,” he told the Courier Mail.

While great for customers, increased competition could see Telstra cut costs more aggressively as revenue comes under pressure, Australia’s biggest listed investment company has warned.

Managing ­director of Australian Foundation Investment Company Mark Freeman said the telco sector is an increasingly “tough space” as competition for customers drives prices down, reported the Herald Sun.

Mr Freeman added the trend would become more pronounced as the migration of wholesale customers to the NBN took away about $3 billion in revenue annually.

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