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Telstra CEO Labels NBN Prices As Unsustainable

Andrew Penn, CEO at Telstra says there needs to be pricing regulation for the NBN as soon as possible as the telco cannot continue to absorb increases in NBN wholesale pricing.

During a CommsDay Summit this week Penn says wholesale prices paid by RSPs have more than doubled and are set to ‘increase even further’.

He says no one is making money from the NBN and the recent fixes to the prices didn’t go far enough.

Penn says, “That increase has so far been absorbed by the retail service providers, but to the point where providing an NBN service today is uneconomic.

“That is unsustainable and the model has to change, otherwise it will lead to higher broadband prices for consumers.”

The NBN has already put in place a temporary discount for the connectivity virtual circuit (CVC) charge which telcos pay to move traffic from the NBN to their respective networks and has reduced its monthly network access charge (AVC).

The Australian reports the discount will stop later in the year for a new pricing model for the 50 Mbps and 100 Mbps service combining CVC and AVC charges totalling $45 and $65 a month respectively.

The NBN will be introducing permanent price changes in May.

The ACCC aired its concerns in its communications report at the government’s unpreparedness over the inevitable NBN sale and split.

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