NBN To Go Head To Head With Telstra In B2B Market With Feds Blessing
Telstra who are struggling in the smartphone market have copped another blow this time from the Federal Government who have backed the NBN to compete with the big carrier in the Enterprise and B2B markets where Telstra in the past have held a dominant position.
NBN Co’s aggressive move into the enterprise market, will take it right up to Telstra in a move that could be attractive to a potential buyer of the NBN in the future.
In a speech set to be delivered to the Committee for Economic Development of Australia (CEDA) conference, Communications Minister Paul Fletcher will argue that NBN Co’s decision to market its fibre network to enterprises will improve competition by cracking Telstra’s stranglehold over the enterprise sector.
“I want to make it clear that the Morrison Government regards NBN’s work in serving the business market – both the enterprise market and small and medium business – as a core part of the company’s mission,”.
“For too long Australian businesses have been burdened by the lack of choice they face in enterprise broadband services, leading to higher costs and inflexible contracts which ultimately affect the bottom line.
NBN Co will launch discounted internet bundles to encourage businesses to take up higher speed plans.
In a stab at Telstra’s poor service and support record, Fletcher said “With NBN, that is changing – because now Telstra’s competitors are able to supply large corporates using the NBN fibre network. They can offer NBN’s Enterprise Ethernet product – which means high speeds, delivered over a reliable, high performance network and with business grade service levels.”
The AFR claims that the NBN was originally designed as a primarily residential network, and NBN Co only has a wholesale monopoly for that segment of the market. This dramatically ended Telstra’s residential fixed line monopoly. Fixed line broadband for the business market, however, remains entirely open to competition, and Telstra is by far the dominant player.
But last year NBN Co announced it would be pursuing the enterprise market with the aim of generating $1 billion of revenue through this channel by 2022.
Addressing complaints that the NBN was already chasing enterprise and B2B business Mr Fletcher claims “Certainly, the Government expects NBN to conduct itself in accordance with the competitive neutrality requirements in its legislation.
“But it is important to recognise that serving business was part of the original NBN vision. For example, NBN Co’s first Corporate Plan, published in 2010, set out a product roadmap that included business services and enterprise services.
“I want to make it clear that the Morrison Government regards NBN’s work in serving the business market – both the enterprise market and small and medium business – as a core part of the company’s mission.”
The speech coincided with the reappointment of Ziggy Switkowski as chairman of NBN Co for another three year term he was previously the CEO of Telstra.