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NBN Price Hike ‘Inevitable’, Says Telcos

Australian telco giants are calling for NBN to overhaul its pricing model in fear of lower-income families being left out in the cold.

Executives from Optus, Telstra, TPG and Vocus claim NBN Co’s pricing review isn’t comprehensive enough and will lead to ‘inevitable’ price hikes for consumers, The Australian reports.

The telcos have called on the government-owned company to ditch the CVC pricing model and to look at a reform.

“We strongly support the government’s plan to transform Australian into a leading digital economy. The NBN will be a vital part of this and we’re determined to keep working with NBN Co as constructively as possible,“ A Telstra spokesman said.

“However this current proposal simply does not do enough to reduce the costs and complexities that retailers and customers are facing. That’s why we’ve made suggestions to NBN Co that would improve certainty, increase value, drive simplicity and support digital inclusion across the community.”

Vocus CEO for retail Antony de Jong echoed Telstra’s sentiment and said NBN’s pricing is “leaving low-income Australians behind”.

NBN Co said it will remain ‘open minded’ as it embarks on a two-year review into its pricing structure.

Ken Walliss, Executive General Manager Commercial at NBN Co, provided the following statement to ChannelNews:

“NBN Co’s detailed consultation with internet retailers and consumer advocacy groups is aiming to deliver significant wholesale pricing discounts and additional data capacity. We want to work with the industry to find solutions that deliver greater certainty, value and simplicity.

We are open-minded and will be pragmatic about alternative wholesale pricing constructs which could deliver beneficial outcomes for customers and the industry.  nbn has demonstrated this approach over the last two pricing consultations that have delivered significant value for customers, as well as increased certainty and simplicity for retailers including through introducing the bundled pricing, decreasing pricing particularly for higher speed tiers, increasing capacity inclusions and introducing averaging of capacity charges which reduce costs and make it easier for retailers.  These changes have significantly improved the ability of industry to deliver the benefits of the nbn investment to customers. 

NBN Co views the proposed 24-month wholesale product and pricing roadmap as a baseline only. It will not prevent us from introducing a new wholesale pricing construct if required, providing it supports our ability to reinvest in the network.

It’s important we consider all feedback from large and small retailers to ensure there are no unintended consequences and provided any framework is commercially sustainable and encourages take up so all Australians can access the benefits of the network.”

NBN has sought feedback from retailers over two options for pricing: the first would freeze access charges from May 2021 and increase capacity inclusions by 0.10Mbps to 0.50Mbps the following year at no cost to retailers.

The second option would see NBN increase the access charge by $2 for plans above 50Mbps.

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