NBN CVC pricing likely to discount 50Mbps speeds: MyRepublic

With NBN's decision on CVC pricing due any day now, RSP MyRepublic has said it is anticipating the broadband company will discount the 50Mbps speed tier in an effort to encourage higher speeds.
Written by Corinne Reichert, Contributor

The National Broadband Network (NBN) decision on wholesale pricing will likely "hero" the 50Mbps speed tier, retail service provider (RSP) MyRepublic has predicted.

Speaking to ZDNet, MyRepublic's Australia MD Nicholas Demos said NBN's connectivity virtual circuit (CVC) pricing decision was due to arrive earlier this week, but has been put off until next Wednesday.

MyRepublic, which pushes 100Mbps speeds and wants to be able to offer consumers 1Gbps speeds at an economically viable price point, therefore sees NBN's likely CVC decision of encouraging 50Mbps as a good step, but as not going far enough.

"We say it's good and bad. Any pricing improvement is of course good, you're not going to say no to any price improvement. Is it enough? No," Demos told ZDNet.

"And is it really an advantage for MyRepublic? I would say to you from what we're hearing: No.

"We don't know what the final pricing structure is yet, but what we're hearing and based on their [talks], NBN give promotional pricing to RSPs, and the current promotional one they're doing now is favouring the 50 product; they want to hero the 50 speed tier product.

"Here we are selling the 100, and we don't think there's going to be any discounts on that."

MyRepublic has been undertaking a 1Gbps trial in Wollongong this year in an effort to prove to NBN that customers want to use such speeds and capacity. According to the RSP, 200 customers signed up for the service purely via word of mouth, without any marketing process having taken place.

One beneficiary of the Gigatown project in Wollongong said he has been "endlessly impressed" with the service.

Charging just AU$129 per month for the gigabit-speed NBN service, Demos said MyRepublic lost money by providing it to customers at its own expense. Providing it at a break-even point under NBN's current CVC pricing would cost consumers AU$300 per month, he said.

"We're not selling it anymore," Demos said, explaining that the trial was just to show how popular it would be.

With NBN needing to raise its average revenue per user (ARPU) to around AU$52 per month, Demos said MyRepublic is "doing them a favour" by putting 98 percent of its customers on speeds of 100Mbps or more.

"The reason why they're championing the 50 product is because that's what they believe everyone can get," Demos added.

CEO Malcolm Rodrigues told ZDNet that MyRepublic offers a gigabit service in Singapore and in New Zealand, and is about to launch this product in Indonesia. He said the company would love to be able to afford this everywhere, but "NBN is a bit more politically sensitive".

Rodrigues added that he didn't understand why the Australian government had "built this beautiful highway and then said only horses and carriages can use it".

The CEO is additionally sceptical that NBN's DOCSIS 3.1 and G.fast upgrades to its hybrid fibre-coaxial (HFC) and FttX networks, respectively, will attain gigabit speeds, saying that while they've achieved this during lab trials it will be a different story once the technology is in the field.

Speed is going to become a big issue during 2018, Rodrigues predicted, especially with the Australian Competition and Consumer Commission (ACCC) now monitoring speeds.

NBN's decision to halt the rollout and sale of services on its HFC network, meanwhile, is "a good step", Demos said.

"Although it hurts us because we lose 22 percent of our orders -- as of next week, that's going to really fundamentally hurt us -- but it's the first step of NBN acknowledging that something needs to give," he said.

"A disproportionate number of our complaints are to do with HFC," Demos said, adding that 20 percent of MyRepublic's NBN orders are on the HFC network. The RSP now makes up around 3 percent of NBN's new business.

Speaking on MyRepublic's previously announced plans to launch as a mobile virtual network operator (MVNO) in Singapore, Rodrigues said it would likely launch services next year.

"We're building a platform in the cloud. We'll probably launch it in Q1," the chief executive told ZDNet.

"Right now we're testing it, probably in February we'll sell to some internal customers, and then launch it in March."

The RSP is also planning on launching mobile services in Indonesia in the next six to 12 months using its recent SG$70 million in funding, which it said is part of a $100 million round to be completed in the next couple of months.

It is also eyeing a public listing on either the Australian, Singapore, or Hong Kong stock exchange at the end of 2018 or the beginning of 2019.

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