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NBN offers telcos two paths to extending CVC bundle discounts until April 2023

It also wants to rejig the pricing for its original wholesale plans.
Written by Campbell Kwan, Contributor

The company responsible for deploying the NBN on Monday said it wants to extend the duration of its wholesale discounts and data inclusions by an additional year.

NBN committed to providing the two-year bundle discount in its 2019 pricing review due to the Australian Competition and Consumer Commission and industry calling for price reductions on entry-level wholesale products.

Published as part of its third pricing review consultation paper, NBN said it wants to extend the two-year Connectivity Virtual Circuit (CVC) discount bundle, from April 2022 to April 2023, as Australians have spent more time at home as a result of COVID-19, with total NBN internet usage having experienced a 32% increase year-on-year.

With this proposal, NBN has put forth two options regarding how it wants to go about extending these discounts. The first option would entail maintaining the bundles discount at the same charge rate of May 2021 while increasing CVC capacity inclusions by between 0.10 Mbps to 0.50 Mbps in May 2022 at no extra cost to retailers.

NBN's second option, meanwhile, would rejig the CVC charges for the 50Mbps and faster bundles by increasing the access charge by AU$2. In doing so, NBN would provide up to an additional AU$2.80 worth of CVC inclusions over and above the inclusions when compared to the May 2021 levels, which NBN claimed would be a 17-29% discount for the additional CVC inclusions.

In addition, NBN wants to update the pricing of its original wholesale plans of 250/100Mbps, 500/200Mbps, and close to 1000/400Mbps so they are more appropriately priced for small and medium-sized businesses.

According to NBN, residential consumers that previously used these plans have primarily moved to lower-priced plans. As such, NBN has proposed pricing these plans, respectively, at AU$100 for 5.5Mbps of included CVC capacity, AU$160 with 6Mbps of CVC, and AU$230 with 6.75Mbps on the 1000Mbps plan.

NBN will also look to provide an additional 0.25Mbps of CVC inclusion for the 25/5-10 Mbps, 50/20Mbps, and Wireless Plus plans and reduce the entry-level bundle additional charge to AU$0 from May onwards.

In addition, NBN said in the consultation paper that it is exploring various longer-term strategic options to continue to "evolve its wholesale pricing".

None of these longer-term proposals were released in this latest consultation paper as NBN said it is seeking feedback for these options across two rounds.

These longer-term proposals will be published during the middle of Q2 2021 after it receives the first round of industry feedback from this latest consultation paper, it said.

Over 50 internet retailers and consumer advocacy groups have been invited by NBN to provide feedback on these proposed changes to pricing, with NBN to finalise its decisions from the latest consultation by the end of April.

Last week, NBN reported positive earnings at year-end after a solid first half. For the six months to the end of 2020, NBN reported a 25% increase in revenue to AU$2.26 billion, which it said was thanks to 660,000 premises joining the network and increased demand for higher speed plans.

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