NBN to push new bundled wholesale pricing model live in May

NBN will launch its new bundled wholesale products in May, the company announced today.

The new pricing model is intended to help minimise network congestion by bundling access and capacity charges into a single product for the network operators’ customers mdash; the retail service providers (RSPs) who sell services to the public.

Until now, NBN has charged separately for access (AVC mdash; a charge per end user based on the wholesale speed of a service) and capacity (CVC mdash; the capacity purchased by an RSP that’s shared between all of its users).

In December, in an effort to combat under-provisioning of CVC NBN revealed that it planned to launch two new products for RSPs. One is based on the 50 megabits per second speed tier and includes 2Mbps of capacity, while the other is based on a 100Mbps wholesale access speed and includes 2.5Mbps of CVC.

NBN said at the time that the pricing of the services represented significant discounts on the equivalent legacy products. The company said that under the old model a 50Mbps service with 2Mbps of CVC would cost an average of $61 (for RSPs, capacity pricing varies depending on the ratio of CVC purchased to number of end users). A 100Mbps service and 2.5Mbps of CVC on average would cost an RSP $72.

The new products have wholesale prices of $45 a month and $65 a month for the 50Mbps and 100Mbps bundles, respectively.

NBN at this stage does not intend to retire the legacy products.

For NBN, the appeal of the new products is not just that it takes out one factor that can result in a poor end user performance mdash; RSPs skimping on capacity mdash; but it also encourages RSPs to sell higher speed plans to users, helping boost NBN’s revenue.

NBN at the same time last year it revealed details of the new products began offering discounts on its legacy 50Mbps product (and on capacity) in an effort to encourage RSPs to begin pushing 50Mbps as the standard wholesale speed tier for end users.

NBN today revealed that it had boosted the proportion of end users on 50Mbps plans from 16 per cent in December 2017 to 37 per cent.

That figure is contained in NBN’s latest monthly update report mdash; a new transparency initiative launched by the company last month.

As of the end of March, more than 6.5 million households and businesses were able to order NBN services, the report reveals. Some 3.7 million have active NBN services.

The company said that in March 0.068 per cent of end users encountered congestion related it its network, down from 0.119 per cent in February.

“Three months ago we had less than one in 15 users connected to our ‘sweet spot’ wholesale 50Mbps plans – today we have more than one in four signed-up to them for better value than what they would have previously been paying,” said Brad Whitcomb, NBN’s chief customer officer for residential

“Not only are more people starting to experience the benefits of connecting to high speed plans but our work with industry continues to deliver a world class network performance as the average network bandwidth congestion per Australian home is consistently sitting below 30 minutes per week compared with more than six hours per week this time last year.”

NBN announced earlier this month that it would increase the number of households connected with fibre to the curb technology. The company also said it will later this month end the pause on sales of services based hybrid fibre-coaxial (HFC) technology.

Copyright © 2018 IDG Communications, Inc.

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