NBN Co forecasting greater uptake of high-speed plans

A VAST majority of NBN customers have been opting for the cheaper, lower-speed plans — but a change in that trend spells good news for the network.

THE company building the national broadband network has more than doubled its first-half revenue thanks to a surge in the number of Australian homes and businesses connecting to the network.

The company responsible for the NBN rollout says revenue for the six months to December 31 had risen to $891 million, from $403 million a year ago, with more than 940,000 new homes and businesses signing up to the network.

As the rollout continues to gather steam, NBN Co also says there has been a jump in the amount of households opting for higher tier 50 or 100Mbps plans since the company launched a new promotion in December designed to encourage retail providers to sell the better quality plans.

A vast majority of customers signing on to the NBN have been opting for the cheaper, lower-speed plans, putting a strain on NBN Co’s bottom line as it tries to work towards profitability. But the company says based on its latest figures it is projecting that 35 per cent of end users will be on either 50 or 100Mbps plans by the end of the financial year — up about 18 per cent.

“We are now forecasting that we will have 1.1 million more end-users on 50Mbps plans by end of June,” an NBN spokesperson said.

Although the rollout continues to be marred by complaints about poor speeds on fibre-to-the-node connections, NBN Co is keen to paint a picture of progress.

It is trumpeting the good news as recent figures show an uptick in the amount of bandwidth retailers like Telstra, Optus and TPG are purchasing from the NBN wholesale network for their customers.

Retailer providers are buying more network capacity from NBN Co in a bid to combat speed congestion during peak usage periods.

Figures from the Australian Competition and Consumer Commission (ACCC) show that the amount of connectivity virtual circuit (CVC) bought per user on the network jumped 38 per cent in the December quarter.

NBN came under scrutiny last year with a jump in customer complaints about broadband speeds, but the surge in the amount of bandwidth being bought by retailers means speeds are less likely to crash during peak usage times. It comes after NBN Co slashed CVC pricing in December and offered retailers a temporary credit for buying 50 per cent more bandwidth per user.

ACCC chairman Rod Sims said the jump in CVC acquired by retailers from NBN Co would result in faster broadband speeds for consumers and less congestion during peak evening periods.

“We are pleased to see such a large jump in the CVC acquired by retailers from NBN Co this quarter,” Mr Sims said in a statement late last week.

The number of services connected to the NBN rose 14 per cent in the December quarter, from just over three million to nearly 3.5 million. Telstra maintained its overall market share, accounting for 49.3 per cent of all wholesale services supplied over the NBN.