NBN squeezing out the low end offers for high end profit

Future Vision
, ,
1

Now that the financial affects of Covid 19 are starting to surface one area that I have just become aware of is the lack of offers to the public for inexpensive basic NBN products. The Australian public were/are forced to migrate to this $50+ billion white elephant and along the way we are being shepherded into higher cost NBN.
IT News " NBN Co is facing a formal challenge to its ability to set its own wholesale prices with the Australian Competition and Consumer Commission (ACCC) opening a new inquiry with a particular focus on entry-level pricing.
The move is a fresh blow for NBN Co, which now faces both service standards and pricing regulations.
However, the ACCC’s intervention on entry-level pricing is also two years in the making, the [result of a sustained campaign by NBN Co to squeeze customers on its cheapest plans, with disastrous results."

From a societies perspective the withdrawal of affordable internet connection will strike at the financially vulnerable.
the price gap between what was charged for ADSL to NBN is widening but don’t take my word search for entry level (12mbps) products for less than $50.
In 2018 Dodo could offer ADSL2+ unlimited data at $30pm for a 12 month contract. Even at a 10% rise per year that would still be (just ) under $40 in 2020.
This issue will affect so many more now that Covid19 has changed the shape of the work force.

3 Likes
2

One of the possible contradictions is that the system was supposedly being designed to deliver 100Mbps speeds to every customer (satellite excepted?). We now know that is not what every customer can connect at.

The cost differential/benefit to the NBN Co of limiting internet service speeds to current customers, 12Mbps, or 25Mbps, or 50Mbps is likely next to nothing compared to allowing a customer to connect at the maximum possible at no extra cost. Most were originally promised 100Mbps service speeds. IE xyz% of fixed line customers able to connect at up to 100Mbps.

The data volume way back in the old days used to be the cost factor. At least that’s how Telstra used to charge some of us, and how the mobile data network is charged for today.

Should the basic service be full speed and the cost tiered by volume? Perhaps starting at a $30 retail benchmark for 10-20GB, $35-$40 for 50-100GB, etc.
It needs to offer value when compared to the add on costs of mobile data, if the NBN wants to service the majority of premises passed.

Perhaps that’s the real issue? The NBN is not a national service, it’s a profit centre with no discounting or subsidised customers, (fixed line footprint?).
IE Connecting to the NBN is not essential, and potential customers are free to choose not to. I don’t support that as a desirable outcome. Just wondering if the charter for the NBN Co or it’s future owner properly answers that question.

1 Like
3

The NBN usually comes bundled with phone and internet
and not internet/data alone.

If one compares phone and internet packages for NBN12 (which is comparable speed to ADSL2+
unless one lived around the corner from an exchange), the costs are similar, if not the same
and example is TPG:

Both the ADSL phone phone bundle and NBN (inc. home phone) unlimited download packages are $59.99/month.

One can’t compare ADSL (data only) with NBN (data and phone phone plans). Data only NBN plans seem to be few and far in between
and should retailers be offering cheaper data only NBN plans as many have moved away from landline home phones (to mobiles).

1 Like
4

My point is for people on low incomes selecting pay as you go VOIP at $0 extra is an important offer. With low NBN pricing they can set up free apps like Skype to stay in touch with families.

2 Likes
5

I am not sure how many low income families use VOIP as their main form of communication. I used to have two good friends that had ADSL VOIP and had no end of quality issues (dropouts, low volume and noise). They ended up dropping VOIP a few years before the NBN came in.

Many low income families would have mobiles and may be far better off (cheaper) not subscribing to the NBN and purchasing additional data to cover any higher use. There are 200GB/month plans available for $28/38/month. With most modern smart phones, there is also the option to hotspot should one need to connect other devices to the internet.

As I outlined above, NBN (phone phone and data bundled) plans are different to data only ADSL2+ plans (data only) and


If one doesn’t need a home NBN landline (as they use mobile), then they are paying for a bundled service where they don’t need all the features.

2 Likes
6

I agree lower data could assist. The Government has estimated an individual’s basic data needs in Australia to fall between 2GB and 20GB, which it says is enough for them “to participate in the digital economy”.
The figures come from a [quietly released report prepared by the Bureau of Communications and Arts Research (BCAR), and builds on broadband affordability research first published back in July 2017.
with that in mind I did just come across a TPG 10gb 12mbps 18 month contract with home phone for $30pm offer.
Data from UK-based firm Point Data has ranked Australia the last out of 36 Organisation for Economic Co-operation and Development (OECD) countries for entry level broadband affordability for the second quarter of 2019, according to shadow communications minister Michelle Rowland.

Point Data ranked 83 countries based on their median, entry level and average prices of broadband.

1 Like
7

NBN - iiNet - Google

Good conversation. I am an iiNet customer, low income - Aged and Blind pension, and an iiNet customer. I pay between $ 85.00 - $95.00 for an ADSL + 2. I have a business, which is not earning but spending.

In late April-May I received a notification from iiNet that is is changing from Optus to Vodaphone. It said, that I have to apply for my current mobile number, otherwise it will be taken.
There was a form to complete. I was blocked to write my business name. I asked for help from iiNet support, and was connected to Cape Town, and Philippines. I wanted to speak with a tech support who works in Australia, and was told that there is none in Australia to provide technical support.

At this stage I made a complaint to the TIO who is still investigation.

I can not use my mobile, when I am out I have to ask others to call a taxi to take me home.

On the 20 May my internet was blocked, and remained blocked until 23 May. I have no Zoom and Skype, so I only can have a landline call to my family


Whatever is the case, and regardless of what company is fighting with what other company, the end result is the same: cruel, inconsiderate behaviour of these telecommunication giants.
I

1 Like
8

The latest?

1 Like
9

It will make 5G (and 6G+ depending on the time frames), far more attractive to those with coverage.

10

Sounds frustrating @Maja.
As you say you are on ADSL, and you must be one of the few left, NBN will not be your network provider.
Telstra will be providing your physical wire connection to the exchange and also your landline phone. iiNet your data connection and bundled mobile phone service.

As iiNet now owns the ex Vodafone mobile network then naturally they would move customers over to that network, and that does involve porting of phone numbers from previous Optus to iiNet. That does require explicit consent from you for security reasons.

2 Likes
11

It appears we are discussing porting of mobile numbers with iiNet (TPG) moving it’s customers from Optus to Vodafone. Not related to the NBN, but for those interested in TPG issues,
‘TPG- Service from hell

Is it a registered business for tax purposes, EG ABN, Sole Trader, Trading Name, ACN?

Previous experience with two of the Telcos and mobile accounts in business names is that they require full evidence of ownership or authority for the simplest of tasks. There are GST implications for the providers who usually identify business accounts and charges separately. iiNet may not have been as particular when you set up your original service. There are also strict requirements imposed on the Telcos to assure the identity and ownership of a service. (A bit if joke when it’s so easy for OS callers to obtain local mobile numbers or spoof caller ID’s.)

1 Like
12

What the telco’s don’t want you to know you wont find out here. It is a closed door discussion on revenue raising. Any public listed telco on stock exchange relies on dividend result. The consumer gets nothing from that unless it has a share portfolio tuned to telco revinue.

Arguing the validity of prices and what you get is not really useful.

Covid or not it is allways a neccessity to increase the grid cap enginerring as it grows it does not diminish or reduce relevance a society has transitioned into its infrastructure.

Humans create stuff and some of it changes how we work,live and play. The NBN is just part of what we all are and we adjust based on the value we get from services the NBN provides.

All that was before the NBN is not dead or obsolete. It measures a part of how the NBN became a neccessity. The NBN will soon be similar in context it too will not meet market demand and another type of engineered brilliance will replace it.

13

It is to those who want value for money and need the internet.

1 Like
14

One more turn of the screws. The NBN has been able to gain approval from the ACCC, or is it no objection to increase it’s user charges from 01Dec23. A second increase is expected mid next year.

The increased costs affect disproportionately customers on low speed tiers who are being hit the hardest. Telstra and Optus objected unsuccessfully to the increases along with other RSP’s.

‘NBN users may see twin price rises within six months - Telco/ISP - iTnews

‘Big nbn Price Increases Are Coming - OzBargain Forums

The first increase!
It’s firstly a surprise as I’m on the fastest NBN Fixed Wireless plan that was available. The other is that from mid afternoon until late at night the plan speeds fall to a fraction of the 70-80Mbps achieved in the morning.

IMG_1287
IMG_12871343×1839 353 KB

For more urban NBN users with lesser demands looking for value there are increasing alternatives. For those further from the centres of high density and on a budget the options are fewer if any. Musk’s satellites set the benchmark for practical and the reference price point (not cheap). I’ve access to mobile data directly through Telstra (4GX modem) and Optus (3G data only sim/device). YMMV.

1 Like
15

Those on the high speed tiers are saving a few $. From Aussiebroadband -

image
image1034×379 77.9 KB

They also stated they vigorously protested the SAU. The incremental NBNCo income will partly go toward, drum roll -

3 Likes
16

The blog from Aussie Broadband about the changes:

"Aussie Broadband

Friday, 20 Oct 2023 | 2 min read

Think like an Aussie: What’s special about NBN’s new SAU

Written by Phillip Britt, Managing Director

FacebookTwitterLinkedin

[Email](mailto:?subject=Check out this post from Aussie Broadband&body=Think like an Aussie: what's special about nbnÂź...)

Green background with yellow large text that reads Think Like an Aussie what's special about the NBN's new SAU

Overview

On 17 October the decision on the variation to nbn¼’s Special Access Undertaking (SAU) was handed down, changing the rules that govern how Australia’s largest broadband network will operate until 2040.

The SAU was established in 2013, when 91% of Australian premises could connect through asymmetric digital subscriber line (ADSL), the top song on Triple J’s Hottest 100 that year was Vance Joy’s Riptide (still a favourite,) and Aussie Broadband celebrated connecting to our first NBN Point of Interconnect (POI) in regional Victoria.

It goes without saying, things are a little different now, and have been for a while. In 2021, NBN began formally consulting retailers like us to develop what a future pricing structure could look like. We made sure to consistently provide our feedback and offer solutions we believed would not only be economically viable for NBN but also best serve our customers and all Australians.

More than two years later, after many workshops and numerous submissions, we now know what that future state looks like.

In an era where more Australians are relying on the internet for work, education, and entertainment, it is crucial to ensure that high-speed, unlimited internet plans are affordable and accessible. On this we agree with NBN, and this SAU reflects their commitment to continue to grow broadband infrastructure across Australia, making faster speeds available to more Aussies.

This is good news for our customers on higher-speed 100/20, 100/40, 250/25, and 1000/50 plans, who will enjoy a price reduction come 21 November. We have been able to pass on these savings due to the removal of Connectivity Virtual Circuit (CVC) for these plans, something I have long advocated for. Removing CVC from pricing simplifies how we manage costs for our NBN customers on higher-tier plans, allowing us to provide savings for our customers through these pricing efficiencies.

Unfortunately, it’s not good news for all. For those on our lower tier 12/1, 25/10, and 50/20 plans, the new wholesale pricing in the SAU means we need to increase the price of these plans by $6 per month. These plans will still have a CVC charge attached, but now they will be individually charged based on a customer’s usage, rather than pooled to balance higher and lower-end users.

A table of our NBN plans indicating old and new prices

I’ve been open about my support of a flat wholesale pricing structure, especially for those on the 50/20 plan. The 50/20 tier represents about 45% of the overall market. By not only continuing to charge CVC, but doing so on an individual basis, the NBN has effectively forced our hand to raise prices for the majority of our broadband customers – and at a time of heightened financial uncertainty.

Regardless of the reasons, we know this will hurt for some customers, and we are here to help. Our customer service teams are ready to support our customers find solutions to keep Aussies connected through financial hardship as best we can.

One thing is clear – this SAU will impact Australians’ internet habits until 2040, but it will be a two-way connection. At Aussie we already see the growing need for more speed and bandwidth as more and more of our lives move online. By making higher-speed tiers more affordable, enabling continued investment in NBN’s network to reach more homes, and levelling the playing field for smaller retailers like us to provide real value against the big incumbents, this new SAU could empower more Australians to ramp up their service to enjoy faster, stronger connections.

For our part, we will continue partnering with the NBN, anticipating for the needs of our customers, and championing what we think will benefit all Aussies most."

So one of the changes made apparent in the blog was that the CVC (the amount of bandwidth the RSP pays for traffic between all their users premises and the POI (Point of Interconnect)) charge for the slower plans (12/1, 25/10 and 50/20) will be individually customer charged to the RSP based on usage, rather than pooling the usage of all those users to balance the cost across all, as it was previously done. On the faster tiers it appears it will be a flat fee for each AVC tier. (AVCs are the bandwidth allocated to the each end-user premises e.g., 25/5 or a 50/20 plan are examples of AVC allocation)

I am not sure, but It would appear that ABB have decided to increase the cost for all slower plan users to balance the cost themselves internally rather than sending individual bills to every user based on their individual usage. This could be an erroneous reading of the blog on my part; I based it on some historical background to this change (including NBN Co offers to axe CVC in exchange for yearly price hikes - Telco/ISP - iTnews).

It could still mean a future move to individual bills based on usage with a standard fee for a base CVC then some usage charge based on individual usage. This CVC base charge could be based on the wholesale included CVC allowance that NBN Co give for each AVC held by a RSP. As far as I know, current base CVC for plans: 12/1 it is 0.0 Mbps, for 25/5 it is 0.1 Mbps, and for 50/20 it is 2.45 Mbps; with Wireless (the up to 70 Mbps plans) at 2.45 Mbps as well. Most users in the slower speed tiers and particularly those on 50/20 exceed those base allowances on average usage over a month, the CVC is the combination of upload and downloaded data speeds.

I benefit from this current price change, my saving is $20 per month as we are on the 1Gbps/50 Mbps plan. While it is of benefit to my household, I feel for those who are facing increased budgetary impact from higher cost of connectivity. I would have rather seen a fixed/flat wholesale price structure that should have eased pressure on household budgets.

17

I wonder what the other and larger RSP’s, EG Optus, Telstra, iiNet etc have decided.
Whistleout has this view.

IMG_1289
IMG_12891135×1315 223 KB

Whistleout mentioned Telstra and Optus have already adjusted their plan pricing.

3 Likes
18

Haven’t yet heard anything from Exetel (I’m on a 50/20 plan) but if it’s going to jump, I’ll have to review my spending on NBN.

1 Like
19

Freddy wakes up and states the obvious - shop around.