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NBN Aims To Encourage Retailers With New Pricing

NBN will introduce a new discount model for its connectivity virtual circuit (CVC) charge, which it states is designed to encourage greater CVC capacity per end-user.

Planned to be introduced in June, NBN states that the model, known as dimension-based discount (DBD), responds to Australian consumers’ rapid increase in data consumption, aiming “to reward retailers with a discount (determined at an industry level) for delivering a better customer experience through the better allocation of CVC to end-users”.

“We know more bandwidth can mean a better broadband experience for homes and businesses, so we are excited to evolve our CVC pricing model for our retailers,” NBN CEO Bill Morrow commented.

“The broadband market is changing and consumption continues to boom. We have seen average usage on the NBN network increase from 75 gigabytes in February 2015 to 125 gigabytes today.

“We know increased usage has presented challenges to our retailers, and we have consulted with them on a new CVC pricing model that creates greater flexibility and opportunity for the industry – acknowledging that broadband use is expanding.”

The model calculates the average CVC bandwidth assigned by all retailers to all end-users on the NBN network at an industry level, with the more CVC bandwidth provisioned per end-user, the bigger the discount available to the industry, calculated on a quarterly basis.

It will be available equally to all NBN wholesale customers, with NBN stating it “aims to encourage retail providers to deliver a higher quality service”.

NBN states it is intended for the model to remain in place for up to two years, with it to be reviewed on an ongoing basis in conjunction with customers.

“The model aims to encourage our retail providers to better dimension their network, and help retailers to provide a better broadband experience for homes and businesses,” Morrow commented.

“We do not plan to stop here. We see the DBD model evolving further and ideally being applied directly to each retailer rather than an industry level. We will continue to evolve it in close consultation with our customers.”

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