NBN to overhaul fixed-wireless pricing

NBN is looking to simplify its two-part wholesale pricing charge for fixed-wireless, as well as consulting on a new fixed-wireless product that 'better aligns to the capability of the network'.
Written by Corinne Reichert, Contributor

The National Broadband Network (NBN) company is now focusing on overhauling its wholesale fixed-wireless pricing, kicking off consultation with retail service providers on pricing bundles.

According to a blog post by NBN executive general manager of Wholesale Products Tom Roets, there could be a "potential divide" by not offering similar bundles available across its fixed-line offerings.

"The aim would be for the fixed access and bandwidth price options to remove the requirement to retain separate charges for providers to support fixed-wireless services under our existing two-part price construct and improve the economies of scale for fixed wireless from internet and phone providers," Roets said.

"We aim to have this wholesale pricing option available to providers by the end of September 2018."

After CEO Bill Morrow last week revealed during Senate Estimates that NBN had killed off its plans to offer 100Mbps fixed-wireless, NBN has also said it will undertake consultation on a new offering that "better aligns to the capability of the network".

"The intention is to provide end-users with the best utility from the available fixed-wireless network capacity, so they can get a better experience," Roets explained.

Morrow had last week said that while expanding capacity on fixed lines is a linear cost, the cost is exponential on fixed-wireless.

"A certain point in time starts to double, starts to quadruple," he said.

"The idea of adding a 100Mbps service actually means driving even more capacity requirement into the network, and the economics again ... this is a cost-leading effort.

"It starts to actually break apart to where it doesn't make any sense."

Roets said NBN is now also looking to improve its systems and processes to "enhance interactions between NBN and phone and internet providers" by September, as well as upgrading solutions for fixed-wireless network congestion.

NBN is additionally proposing to launch voice-only and basic broadband plans for regional users, including a AU$22-per-month wholesale plan including 50Kbps to cover basic telephony, email, and web browsing.

"We will propose a wholesale pricing structure that is a fixed entry point for access and bandwidth charges. This will allow internet providers to manage their customer base with a single wholesale pricing construct that helps supports many end users' needs," Roets added.

"We will be working closely with industry to finalise details of the plan and expect it to be available by the end of 2018."

NBN also provided an update of its wholesale pricing changes across the fixed-line networks, saying it now has 1.3 million premises on 50Mbps plans after saying earlier this year that it expected to have 1.2 million people on 50Mbps speeds by June.

The company will also now work with retailers to migrate all 50Mbps and above end users across to the bundled plans by October 31.

NBN had launched its new wholesale pricing in May, with a discount of its 50/20Mbps speed tier from December leading more than 1 million premises to upgrade their speed. Under the changes, NBN's access and bandwidth charges were also bundled together across connectivity virtual circuit (CVC) and access virtual circuit (AVC) for the two top-tier plans.

Thanks to its previous wholesale pricing discounts, the Australian Competition and Consumer Commission (ACCC) in February said RSPs had increased their CVC capacity, with a rise of 38 percent in the quarter to December.

According to ACCC chair Rod Sims, the average NBN CVC bought by retailers per user increased from 1.11Mbps to 1.53Mbps, with NBN contracted to supply 5,385Gbps of CVC capacity by the end of December.

This followed NBN providing RSPs with a temporary credit for acquiring 50 percent more CVC, and pricing 50Mbps AVC the same as 25Mbps.

The 50Mbps wholesale bundle costs retail service providers AU$45 per month -- a 27 percent discount -- and includes 2Mbps of bandwidth, while the 100Mbps wholesale bundle was reduced by 10 percent to cost AU$65 for 2.5Mbps of included capacity.

The ACCC also found in its first fixed-line broadband speed monitoring report that NBN retailers are delivering up to 90 percent of their speed tier promises during peak hours, with Telstra, Optus, TPG, and iiNet delivering between 80 and 90 percent of their speeds at all times, including the busy hours of between 7pm and 11pm.

According to Sims, the results "reflect significant and recent changes in the market", including NBN's CVC discounts and the ACCC's speed advertising guidance .

By the end of the March quarter, NBN had 3.7 million total end users: 1.8 million on FttN, 1.2 million on fibre to the premises (FttP), 413,703 on HFC, 226,901 on fixed-wireless, and 87,478 on satellite.

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