NBN Co wants to create a cut-price 100Mbps product

NBN Co is set to give existing 100Mbps users a performance boost from September while exploring ways to introduce a cut-price 100Mbps product.

The plans build on a rebate that NBN Co has offered to retail service providers since the start of the year that aimed to encourage more 100Mbps sign-ups.

The company’s ongoing desire to sell 100Mbps services runs counter to a key reason the Coalition used to shift the NBN to a multi-technology mix; that is, that 100Mbps services were of limited utility to most Australians.

NBN Co said today it is “increasing the wholesale connectivity virtual circuit (CVC) or capacity inclusion for the ‘bundle 100’ and above discounts by 500Kbps, lifting included CVC from 2.5Mbps to 3Mbps.”

“The cost of NBN Co’s wholesale ‘bundle 100’ discount is unchanged at $65 and the CVC inclusion change is effective from September 2019,” the company said.

In plain English, current 100Mbps users will see an additional performance boost on their services from September, with no price increase.

The performance boost will also be available to faster plans, though their numbers are relatively limited.

The boost is likely to help RSPs sell the performance benefits of being on a 100Mbps plan compared to a 50Mbps plan (assuming the user’s line speed can support both options).

“It is effectively a $4 cost saving for our RSPs - 500Kbps is $4 value,” NBN Co’s general manager of pricing and commercial Ken Walliss told iTnews.

“That gives them greater capability in terms of how they go to market, greater flexibility, and provides some increased opportunity for them to upsell from the 50Mbps to 100Mbps tier.”

However, NBN Co also wants to find a way to reduce the price of 100Mbps services and therefore make them more attractive.

One option it will begin shopping to around 50 RSPs today is a new 100/20Mbps tier product, which cuts the performance of the uplink in order to save some money.

Walliss said that under the proposal, the new 100/20 product would exist alongside the 100/40 product.

“It is just a proposal at this stage - it's very much up for industry feedback,” he said.

“How we landed there was we look at how residential customers, in particular, are using the 100Mbps service, and what we could see from our work is that they were obviously demanding higher and higher download speeds, but their upload speeds were well below the 100/40 service we provide at the moment.

“We do see an opportunity there that we want to consult with industry about where we reduce the upload speed, and that potentially leads to some cost savings for NBN Co that we're looking to pass onto RSPs as well.

“That therefore means that the 100Mbps service, particularly for residential customers, can become more affordable.”

Walliss said that NBN Co would not contain its examination of 100Mbps services to cuts to the uplink.

“We're looking at the end-to-end costs and trying to get services in the most affordable way to end users,” he said.