Australian telcos have slammed NBN Co’s strategy to push customers to the 100Mbps service by increasing the price of 50Mbps.

In a submission to the ACCC, Optus claims this move will simply “bifurcate” users “into entry level 25Mbps services and higher-priced 100Mbps services.”

NBN Co is proposing to price 50Mbps and 100Mbps services at roughly the same cost, to draw towards the higher-speed offering.

It’s the opposite approach to its previous attempts to draw customers to its 50Mbps tier by lowering the price, in order to encourage users to leap from 12Mbps and 25Mbps tiers.

NBN is instead planning to make the 50Mbps tier appear expensive, compared to the faster 100Mbps service.

“It appears the intent of the proposed pricing is to move the wholesale 50Mbps price towards 100Mbps over time, while maintaining the current price level through the 25Mbps wholesale product,” Optus wrote.

“Optus does not support this trend.

“The combined impact of these movements is to effectively force the majority of the market down to 25Mbps speeds in order to maintain current retail prices; or to force end-users to pay more to move to 100Mbps speeds.

“Optus expects that the majority of its existing 50Mbps will opt to move down to 25Mbps rather than pay more for 100Mbps – particularly where many households still suffer from underperformance and technical line limitations.

“This is not the outcome we want, nor the outcome NBN Co wants, nor should it be the outcome the ACCC allows.”

Telstra said likewise, in its own submission to the ACCC.

“Telstra is not prepared to migrate customers to 100/20 but shape them to 50/20 just so NBN Co can report higher uptake of 100/20 while customers actually receive 50/20; the cost of Telstra contacting millions of customers to initiate a conversation with them about moving up speed tiers and pay higher retail prices is prohibitive,” it said.

“There is nothing wrong with trying to move the market to accept 100Mbps as the base product,” Optus added.

“This is in fact occurring in most other markets around the world and is a trend that Optus encourages.

“However, unlike in other markets like New Zealand, NBN Co continues to attempt to coerce end-users onto 100Mbps rather than encouraging consumers to choose 100Mbps.

“NBN Co should be trying to pull consumers up to 100Mbps by making the product commercially attractive.

“It is not appropriate that a significant price hike is imposed on this customer base without any change to the product offer, including any service level commitments.

“There should be a significant and tangible ‘more for more’ requirement that must be met before such a detrimental price shock can be levied.”