NBN Co announces wholesale discounts, data capacity increases to meet customer demand

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Australians stand to enjoy more affordable access to high-speed broadband if Retail Service Providers (RSPs) pass on the benefits of NBN Co’s full range of wholesale discounts and additional data capacity inclusions scheduled for release over the next two years.

Today’s public release of NBN Co’s Wholesale Pricing Review 2019 Close-out Paper follows five months of extensive consultation with RSPs and industry groups.

NBN Co is maintaining its strong focus on improving customer experience and its Wholesale Pricing Review 2019 has further targeted five key areas: lifting take-up in under serviced consumer segments; promoting much higher speeds; improving support for RSPs in the face of increasing demand for broadband; creating a regular cadence for future pricing consultations; and making it simpler and easier for RSPs to do business with NBN Co.

Chief Customer Officer Residential at NBN Co, Brad Whitcomb, said, “Retailers strongly advocated for greater certainty on future wholesale prices, more included data capacity and better value for money. We’ve listened and this is exactly what we’re announcing today.

“Across most of our discount bundles we’re introducing significant improvements, which will allow RSPs to provide their customers with greater choice and even more affordable retail broadband products.

“In response to RSP, ACCC and industry calls for price reductions on entry level wholesale products, we introduced a modified 12/1 Entry Level Bundle on 1 October 2019, and we fast-tracked a rebalancing of our 25Mbps bundle discount, which will be implemented on 6 December 2019. Both initiatives will help ensure nbn services remain affordable, particularly for price-sensitive customers, and we will continue to work with the ACCC and retailers on targeted discounts in the future.

“To address growing data consumption, we’ve substantially increased CVC capacity inclusions across most of our discount bundles. These changes represent another significant step forward for the industry and demonstrate our commitment to address factors such as wholesale price certainty and growing data consumption, and we’re also supporting a sustainable industry while maintaining and improving the network in the future.

“The key point is that NBN Co continues to create greater value, which is making broadband even more affordable despite consistent increases in data demand. Since 2016, we have more than halved the effective wholesale price of CVC, which applies to purchased capacity.”

National pooling of CVC

In addition to increasing the included data capacity across most discount bundles, NBN Co is changing the rules that govern the reallocation of unused data capacity for the benefit of RSPs and customers.

Previously, RSPs were only able to pool CVC within certain geographical areas associated with a Point of Interconnection (POI) to the nbn™ access network. However, from May 2020, NBN Co will extend this pooling mechanism to the national level across RSPs’ fixed line and fixed wireless services. RSPs will be able to more cost-efficiently purchase capacity to serve fixed and fixed wireless customers across all Connectivity Serving Areas (CSAs) anywhere in Australia, making it simpler for retailers and helping them to manage costs.

Introducing AVC overhead allowance

To help customers to receive faster layer 3 speeds from RSPs, subject to internal operational requirements, NBN Co intends to introduce an overhead allowance for the downstream component of most fixed line wholesale speed tiers (with the exception of the up to 1000/50 and 1000/400 bundle discounts1,2). Where possible, NBN Co will provision this allowance into its wholesale speed tiers to accommodate protocol overhead, which includes the code used to ensure the correct delivery of data packets that otherwise impact a customer’s broadband speed. NBN Co is targeting mid-2020 to introduce this change.

Future roadmap

NBN Co today published a two-year roadmap of its discount bundles for fixed line and fixed wireless services with incremental, annual increases in data capacity inclusions on most bundled discounts to meet customers’ growing data demand.

Brad Whitcomb said: “We strongly believe this rolling two-year roadmap, which will be updated annually as part of our yearly review of our discount bundles, will go a long way to improving transparency and certainty for RSPs. The increased value and data capacity inclusions are a minimum guaranteed baseline and we will be flexible on any unexpected shifts in the market to support the industry and customers.”

Underserved customer segments

As foreshadowed at the commencement of the Wholesale Pricing Review 2019 consultation process in June, a key priority for NBN Co is working with RSPs and industry groups to find solutions to connect underserved Australian households. In December, NBN Co will unveil its strategy to encourage greater take-up of nbn services among underserved segments of the community.

Brad Whitcomb said: “We want all Australians to benefit from having access to high-speed broadband and will do our best to ensure the highest number of people can take advantage of this national infrastructure asset.”