Telco CEOs appeal to NBN's sense of social responsibility for lockdown CVC relief

Vocus has accused NBN of using the latest lockdown as an opportunity to profiteer.

fletcher-rue-nbn.jpg

Image: Chris Duckett/ZDNet

The CEOs of Telstra, Optus, TPG, Vocus, and Aussie Broadband have written to NBN asking for the national broadband wholesaler to do more than the current CVC relief program is offering, citing increasing costs to acquire capacity.

The telcos say the current program does not come close to covering CVC cost increases that have been experienced since lockdowns hit primarily New South Wales and Victoria, and costs to retailers have risen each month at an "unmanageable rate".

The telcos are asking for a retrospective change to the program to have May 2021 usage as a baseline, and to calculate the credit on each telco's individual overage charge and not on the overall industry overage, as it currently occurs. The group says that failure to do so would lead to poorer consumer outcomes.

"We write to appeal to NBN Co's social responsibility towards all Australians and request NBN Co provide additional broadband capacity in their time of need," the telcos said.

Vocus CEO Kevin Russell said NBN was failing its social responsibility.

"NBN is profiteering from lockdowns," he said.

"Simple fact: NBN makes more money today with Australians forced to work from home than they did three months ago before lockdowns."

For its part, NBN said it was "unfair and unrealistic" for the telcos to expect Australian taxpayers to stump up additional subsidies and provide bigger profits to telcos. The company allocated AU$5.2 million in credit for July, AU$3.7 million in August, and has previously said it would have further credit available for September and October if usage was above the long-term trend.

"Our monitoring of the network saw data usage flatten over August, particularly towards the end of the month. Average usage across the entire network during busy hours for the month of August grew just 2.5%, compared to 7% in the month of July," an NBN spokesperson said.

In its recent corporate plan, NBN forecast lower revenue and earnings than in its plan a year prior.

"Once lockdowns are eased, we anticipate data usage during the busy hour will fall significantly. This will result in reduced revenue for NBN Co in the second half of the year and is the principle reason why revenue for FY22 has been guided at a level below last year's corporate plan," the spokesperson added.

"In other words, rather than profiteering, we have reduced FY22 revenue and earnings expectations as a result of the impact of COVID-19."

Last month, Telstra CEO Andy Penn laid blame for a trio of telcos being hauled into Federal Court over allegations of making misleading NBN FttN speed claims at the feet of NBN Co.

"When you sign up for the NBN you tell us what speed you want. However, when we connect you for the first time, NBN can't tell us what speeds you'll get. Despite this, we still have an obligation to provide you the speed you've chosen," Penn said on Twitter.

"The root cause is at the beginning. We need NBN to tell us what its network is capable of for customers upfront, before we connect and for regulators to impose on NBN the same obligations we have to meet. That's how we'll get this right for customers once and for all."

Related Coverage