TPG’s Vision Network undercuts NBN with cheap wholesale rates

TPG-owned fibre provider Vision Network has moved to take on the NBN on price, slashing its wholesale costs to retailers as the debate over broadband affordability heats up.

TPG-owned fibre provider Vision Network has moved to undercut NBN prices, slashing its wholesale costs to retailers as debate over broadband affordability rages.

The company, whose parent TPG is in talks to sell its fibre assets to rival Vocus in a $6.3bn deal, is confident its revised pricing will deliver greater margins for retailers and lower costs for end ­customers.

Vision Network managing director Jonathon Purbrick said the new pricing structure would undercut the proposed wholesale charges announced in NBN’s new Special Access Undertaking, which is being reviewed by the Australian Competition and Consumer Commission.

“We don’t want to be a pale imitation of the NBN,” Mr Purbrick said. “We want to be a competitive force in wholesale broadband and understand that starts by offering access to superfast speeds at rates that are actually decent.”

The new pricing is scheduled to start in early 2024 for Vision Network’s Spectrum Freedom and Spectrum Super Freedom plans and will be applied across all access technologies. Wholesale pricing for its 100Mbps plans, for example, will be $50 per month, compared to $58 from NBN Co under its revised SAU.

“We want to be the best-value wholesale broadband provider in Australia so our partners can help their customers move to a high-speed future where value really matters,” Mr Purbrick said.

“We’ve listened to our retail service partners who continue to be squeezed by other providers wanting to increase prices during this current cost-of-living crisis. With these new pricing plans we will significantly improve the simplicity and competitiveness of our services.”

NBN Co last month submitted a revised Special Access Undertaking that would set pricing and minimum service standards for the network, after its previous proposals were rejected by both the government and the ACCC.

The ACCC said last week it had a ‘‘favourable view’’ of NBN Co’s revised pricing and standards proposals, and said it was cautiously optimistic that they could be passed by the end of the year after another round of consultations.

The competition watchdog, NBN Co and retailers have been trying to agree on a new variation since early 2021.

The key proposals in NBN Co’s latest submission include axing controversial CVC pricing in favour of a “pay as you go” model for retailers, but only for higher-tier speed plans. NBN Co would also establish a minimum floor price for its 12, 25 and 50Mbps wholesale speed tiers and a maximum ceiling price of no more than $55 in the 2024 financial year, regardless of the volume of data used. But prices would rise after the 2024 financial year.

“Our preliminary view is that NBN Co’s revised variation is a material improvement on its previous proposal,” ACCC commissioner Anna Brakey said.

“The revised variation appears to address the concerns that led us to make a draft decision to reject the previous proposal. It also appears to respond appropriately to the further issues that have arisen in recent months.”

It comes amid rampant investor interest in fibre assets. TPG last month said it had received a number of non-binding expressions of interest for its fixed network infrastructure assets, including Vision Network., which pro­vides broadband access to about 400,000 Australian premises.

“As part of that process, Vocus Group made an indicative, highly conditional, non-binding offer to acquire certain of TPG’s Enterprise, Government and Wholesale assets and associated fixed infrastructure assets, including Vision Network, for approximately $6.3 billion,” TPG said in August.

“The indicative offer is conditional upon a number of matters, including due diligence, debt financing, finalisation of transaction documentation, and approvals of the respective boards of TPG and Vocus Group.”

The telco said that after a board assessment of the offer, it granted Vocus a period of exclusive due diligence until September 6.