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Amaysim 1Gbps NBN plans on the table once 'commercially viable'

While its current NBN plans cap out at 100/40Mbps, Amaysim said it will bring in higher-speed services once it is economically viable to do so, with 1Gbps plans to be considered.
Written by Corinne Reichert, Contributor

Amaysim has said it is committed to introducing National Broadband Network (NBN) services with faster speeds than its current maximum 100/40Mbps tier once it is "economically viable".

"We will definitely be coming out with higher-speed plans as they become commercially viable in the market ... 1Gbps is an option that's on the table and being looked at but not guaranteed at this stage," Rob Appel, Amaysim's commercial director of Broadband, told ZDNet.

"And we're not only looking at doing that via the NBN, but we would be doing that via other networks. It's important to keep in mind that while we're very focused on the NBN at the moment, Amaysim will be rolling out a mix of technologies."

Appel explained that NBN's connectivity virtual circuit (CVC) wholesale pricing model is partially to blame for 1Gbps services not being economically viable, and for 1.7 million NBN users still being on speeds of 25Mbps or lower.

"CVC pricing is part of that. And certainly CVC and the way it's structured is a factor in delivering higher speeds and better prices to Australian customers," he said.

"There's more to it than just CVC pricing, and one of the things that we've seen is that you've got NBN offering discounting to RSPs and wholesalers, but at the wholesale level the major carriers are generally not passing that through."

Fulfilling its promise to launch NBN plans in May after holding closed trials of the fixed-line broadband service last year, Amaysim has launched three plans: AU$60 per month for speeds of 12/1Mbps; AU$70 per month at speeds of 25/5Mbps; and AU$90 per month for speeds of 100/40Mbps, all with unlimited data, no lock-in contracts, no activation fees, no fees for switching between plans, and no termination fees.

According to Appel, Amaysim's focus on not locking customers into contracts or charging any fees is part of a strategy to simplify the NBN market using "a new approach to flexibility".

"Really what's different with us is we're totally focused on the flexibility of the customer, and it's something that we think is missing in the market in Australia. So that's the ability to sign up without essentially any risk at all," Appel explained.

Upon launching its plans this week, Amaysim said it conducted research across 1,007 respondents into consumer beliefs about the NBN, with its findings including that 58 percent of respondents don't understand the difference between ADSL2+ and NBN; and 55.2 percent will likely stay with their current broadband provider.

In addition, Amaysim said 83.3 percent of respondents don't know the NBN speed tiers; 71 percent don't understand the different speeds available; 70.5 percent don't know which speed they should order; and 53.3 percent believe the bigger telcos have better NBN speeds.

According to Amaysim, the incumbents are taking advantage of this confusion.

"[It's] an existing business model that doesn't fit the new NBN network structure, but it's being maintained because it's in the interests of the dominant players at the moment, and it's in their interests to confuse the market so that customers are essentially scared or overwhelmed," Appel argued.

"The major carriers are holding onto their existing business model because that's what's propping up their margins."

In order to remedy this confusion, Amaysim plans to utilise its existing customer base of more than 1 million mobile subscribers and 50,000 energy customers to lead a re-education program including through an explanatory video launching this week.

"That gives us a base to talk to when it comes to educating the market in a cost-effective way," he said.

Amaysim won't offer satellite connectivity, but it will provide NBN services across all other network technologies -- fibre to the premises, fibre to the node, fibre to the basement, fibre to the distribution point, hybrid fibre-coaxial (HFC), and fixed-wireless, the last of which Appel called an "exciting" technology.

"The really interesting one going forward will be fixed-wireless, and the sort of speeds that can generate through that technology for the residential customer in a cost-effective way. I think that's a really exciting market," Appel said.

NBN last month attained speeds of 1.1Gbps/165.6Mbps across its fixed-wireless network by aggregating 11 carriers, and will be introducing a wholesale 100/40Mbps fixed-wireless product next year.

Amaysim's hybrid model of fixed-line connectivity involves arrangements with Optus and AAPT -- now owned by TPG -- to gain access to all 121 points of interconnect (POIs) immediately, while it also rolls out its own direct-to-the-POI network.

"Those links will be rolled out in line with where our customer base is located," Appel said.

"So we're rolling the network out in the same pattern as our customer base across the country. That allows us to target the right areas quickly, but at the same time offer the plans across the country.

"We see the internet market as really quite static and it's still dominated by the big four carriers, and it's dominated in a way that's preventing customers from getting better deals and more flexibility, so we see all those elements coming together as a real opportunity to disrupt."

Amaysim is ahead of Vodafone Australia, which earlier this week put out the call for NBN customers without unveiling its plans.

Vodafone said only that it will be launching services as an NBN retail service provider "later this year" for homes and small businesses "in selected areas", also saying its plans would bring "simplicity" to the market.

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