Price cut on faster NBN
THE NBN is slashing wholesale high-speed broadband prices for businesses by up to 70 per cent following a spate of complaints from telcos and businesses about the quality of the service, connectivity issues and high charges.
From October 1 the National Broadband Network will introduce a new spend cap on its high bandwidth business products which will allow retail service providers (RSPs) like Telstra, Vodafone and Optus to cut prices for their business customers. The NBN has worked with RSPs to develop the new pricing model, which is aimed at benefiting medium and enterprise businesses employing between 20 and more than 200 employees.
That represents about 11.7 per cent of Australia’s total business market.
Most of these business clients regularly require fast upload and download speeds, along with high-definition video conferencing and cloudbased backup services — requirements which many businesses have been saying are too expensive.
NBN executive general manager of business sales and marketing Ben Salmon told the Gold Coast Bulletin the price cuts will vary between zero and 70 per cent depending on the speed tiers and contention purchased on the network.
“We want to make sure that we have a very price competitive product in the market,” Mr Salmon said.
“We are expecting on the back of this that we will see a big growth in sales of our higher speed symmetrical services from business customers.”
Mr Salmon said business customers represented about 10 per cent to 15 per cent of the NBN’s national footprint; however business customers generated about 15 per cent to 20 per cent of the NBN’s overall revenue.
He said the price reductions were not related to the increases in pricing complaints the NBN has been receiving from RSPs, including most recently from Vodafone Hutchinson Australia chief executive Inaki Berroeta.
Mr Berroeta last month urged the NBN to reduce wholesale prices to ensure Vodafone could remain profitable in the Australian telco market.
But Mr Salmon admitted the prices the NBN has been charging were too expensive.
“The top end of town said the pricing wasn’t competitive, and that’s what has really prompted us to make these price changes,” he said.
RSP Aussie Broadband, which provides high-speed internet services to corporate clients, said the pricing changes from the NBN would be welcomed by businesses and internet retailers.