Telstra joins chorus of critics over NBN pricing

The telco giant has warned some customers will face price rises if NBN Co’s proposals go ahead.

A Telstra spokewoman said: ‘Some of our remaining concerns are with prices for the most popular (50Mbps) plan set to rise materially and with limited changes to service quality.’ Picture: NCA NewsWire / Luis Enrique Ascui

Telco giant Telstra has weighed in on the latest pricing proposals from NBN Co, describing them as “steps in the right direction” but echoing the competition watchdog’s concerns with planned price rises, including to the most popular 50Mbps plans.

The ACCC on Friday published a consultation paper in response to NBN Co’s latest pricing proposal – known as the Special Access Undertaking – that would lift the prices of some plans and lock in terms until 2040.

The watchdog flagged multiple concerns and has taken issue with planned price rises to NBN’s 50Mbps plans, concerns shared on Monday by Telstra.

“While the SAU has made some steps in the right direction, there is still some work to be done to ensure the regulatory framework delivers the right wholesale prices and service quality for customers over the next 10-20 years. Given the long-term nature of this SAU, it’s critical for our customers that we get it right,” a Telstra spokeswoman said.

“Some of our remaining concerns are with prices for the most popular (50Mbps) plan set to rise materially and with limited changes to service quality. While NBN Co is building a full-fibre network in parallel to its Multi-Technology Mix (MTM) network to help address service quality ­issues, people remaining on the MTM network shouldn’t face wholesale price increases as high as proposed in the SAU.

“Also, NBN Co needs to commit to deliver the plan speeds it is selling to service providers. If NBN Co charges a 50Mbps or 100Mbps price, it must assure its lines are capable of delivering 50Mbps or 100Mbps.”

Under the proposals, lodged in November, a 50Mbps plan would cost retailers $50 a month, up from $45, while the prices of other plans including the 100Mbps high-speed tier would fall.

The revised SAU is NBN Co’s second attempt at setting pricing and other regulatory settings after it withdrew its first draft last year following widespread criticism from the government and retailers.

A TPG spokesman said: “NBN’s proposal to increase pricing on its most popular 50Mbps and its entry-level 12Mbps services will fill its coffers while consumers continue to do it tough.”

Aside from the 50Mbps pricing plan, the ACCC has also taken issue with NBN Co’s proposal for two regulatory periods, to take place on either side of June 30, 2032. NBN Co wants to achieve a “stand-alone credit rating with a stable outlook after 2032”, as it heads towards an eventual likely privatisation.

In the first regulatory period, $1bn of historically incurred costs could be reclaimed, and up to $11.5bn could be reclaimed in the second period, a structure the ACCC said could lead to much higher prices.

Reaching such a credit rating “does not appear to be subject to any condition that NBN Co has or would continue to invest and operate efficiently,” the ACCC said in its paper on Friday.

“In addition, allowing a reasonable opportunity to achieve and maintain such a credit rating from [mid-2032] could potentially require NBN Co to increase its revenues to pay down its debt over a compressed time frame … and so could bring a material risk of inefficiently high pricing,” it said.

“The arrangements proposed for the post-2032 period … appear to incentivise NBN Co to prioritise recovery of historic losses, including by way of material real price increases that could impede efficient use of the NBN.”

The ACCC has called for feedback from consumers, businesses and retailer service providers on future regulation by February 17.