NBN to attract new customers with lower prices, faster speeds

The National Broadband Network has killed off its highly criticised “Netflix tax” proposal, and is instead focused on luring new customers.

The company in charge of building the National Broadband Network has opened the door to cheaper, faster internet plans after abandoning an earlier and unpopular proposal that would see users charged more to stream video.

NBN Co faced backlash earlier this year after flagging a “Netflix tax” on streaming video that was using up capacity on the network, but quickly distanced itself from the proposal and said it was merely “seeking input from industry”.

That proposal proved about as popular with retail service providers as it did with consumers.

Of the more than 50 retail service providers and industry groups consulted, only two supported the proposal.

The NBN indicated it had shifted its focus to maintaining reliable performance during peak periods and making higher speed tiers more affordable.

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“The majority of respondents in the first round of consultation highlighted streaming video as an important application driving the need for higher download speeds and more capacity inclusions,” NBN Co chief customer officer Brad Whitcomb said in a statement today.

Today, the corporation released its second pricing review consultation paper, proposing changes to the pricing and performance of different service tiers to offer faster downloads for cheaper at the expense of upload speeds.

NBN Co sells internet plans to retail service providers on a wholesale basis, but providers have been complaining the wholesale pricing is too high and blaming it for cutting into margins and damaging profits.

The NBN is hoping to lure new customers with cheaper prices.

The majority of NBN customers are subscribed to plans offering up to 50-megabit-per-second downloads and up to 20mbps uploads, which surged in popularity when NBN Co lowered the price to $45 at the end of 2017.

The corporation said it would now look to increase the capacity of that bundle by a little over 10 per cent next May.

Earlier this year, a bundle offering 100mbps downloads and 20mbps uploads was proposed for a wholesale price of $58, a $7 discount on the existing 100/40 bundle.

NBN Co is also proposing two additional new high-speed tiers, a 250/25 bundle for $68 per month wholesale, and a 1000/50 bundle for $80 per month wholesale.

The two highest speed tiers would only be available to customers on fibre-to-the-premises and hybrid-fibre-coaxial connections, with fibre-to-the-kerb feasibility still being investigated.

NBN Co also said it planned to introduce a modified entry level bundle from next month to accommodate price-sensitive customers, after it recently announced it was focusing on luring in lower income and older Australians who have access to NBN but have so far elected not to connect to it.

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Mr Whitcomb said the modifications would give providers greater choice to support more cost conscious customers.

“A number of respondents stated that a discount to the entry level wholesale bundle would help them to maintain an affordable retail broadband plan in a market with uncapped data inclusions,” Mr Whitcomb said.

The entry level bundle offers 12mbps downloads and 1mbps uploads.

NBN will continue consulting with industry and providers, with final outcomes on the wholesale pricing consultation expected to be announced in November, but any lower prices offered at the wholesale level would need to be passed on by the retail service providers before consumers felt any relief.

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