NBN shake-up ‘to bring tech sector certainty’

Telstra and smaller providers said the upgrade will give certainty for a sector struggling with profitability and competitive tensions.

A Telstra spokesman said the telco was pleased to see that its customers could access the higher speeds they now needed.

The telco industry rallied behind the NBN shake-up on Wednesday, with Telstra and smaller providers alike declaring the $4.5bn upgrade would provide much-needed certainty for a sector struggling with profitability and competitive tensions.

NBN Co and the government announced on Wednesday that 8 million households would be granted access to ultra-fast internet speeds under a major multi-year upgrade program.

NBN Co chief executive Stephen Rue told The Australian the pandemic had accelerated changes in the economy that were already under way, necessitating the speed boosts.

A Telstra spokesman said the telco was pleased to see that its customers could access the higher speeds they now needed.

He said Telstra had been calling for more certainty on the network’s upgrade path, particularly given the increase in demand due to COVID-19.

“The importance of this upgrade has only been reinforced by COVID and working and studying from home,” he said. “On the matter of pricing, we continue to encourage NBN to eliminate the CVC charge, which is essentially an excess data charge and will act as a disincentive for customers to access the higher speeds offered by the technology upgrade.”

Vocus Retail chief executive Antony de Jong said the “on-demand” fibre upgrade approach was a welcome one, given customers who were willing to pay more for faster broadband speeds would be able to achieve them. He agreed with Telstra that CVC needed a rethink.

“This investment is welcome. However, we cannot ignore the need for reform of NBN’s consumption-based pricing model, which forces RSPs to increase broadband prices to customers to cover the average costs they need to pay NBN,” Mr de Jong said.

“Put simply, CVC should be abolished and NBN should offer the industry flat-rate speed tiers. If this was implemented then NBN’s entry-level broadband plans would not be subsidising higher-speed plans when it comes to included usage.”

Joe Demase, managing director for listed telco 5G Networks, welcomed the news and said digital resilience was critical for businesses, particularly during the global pandemic.

“One of the most important ­aspects of the announcement is what it will represent for Australian businesses,” Mr Demase said.

Providing enhanced business services and supporting regional Australia are excellent steps in ­realising a consolidated national broadband framework, in addition to helping connect more than 300,000 new premises.

“The promised $1.5bn economic growth boost across regional Australia is another key step towards ensuring the best connectivity can be given to Australians in regional or remote communities, particularly those who were affected by the bushfires not too long ago.”

Following an accelerated rollout by the NBN leveraging existing network infrastructure, some of Australia’s key mid-size business segments had been left seeking options for higher speeds — some forced to seek wireless solutions outside the NBN.

“So it’s pleasing to see that now the initial build is complete the government has delivered a comprehensive network upgrade and business fibre package that will help provide for all Australian businesses today and into the future,” Mr Demase said.

Rojie Tadros, CEO and founder of Payday Deals, said the government should be applauded for embracing a first-class internet backbone.

He said his own e-commerce business had benefited from fibre broadband infrastructure.

“With the coronavirus taking so much more online than ever before, the headroom that fibre gives the network will result in innovative new businesses in the years to come,” Mr Tadros said.

The managing director of listed challenger telco Spirit Telecom, Sol Lukatsky, said the announcement was even more significant for regional areas, which did not benefit from the same levels of competitive investment in fibre infrastructure as major cities.

“This provides a larger market opportunity for the telco sector’s growth over the next year with ­access to a better network stimulating the growth of digital capabilities and infrastructure in new regions,” Mr Lukatsky said.