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NBN attempts to push speeds higher with new pricing

The National Broadband Network (NBN) company will be launching its new wholesale pricing options next month after several months of consulting with industry, in an effort to enable retail service providers (RSPs) to sell higher-speed plans while reducing congestion.

According to NBN, since offering discounts over its 50/20Mbps speed tier, more than 1 million premises have upgraded their speed. Around 37 percent of end users are now on the 50/20Mbps speed tier, up from just 16 percent in December.

“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,” NBN chief customer officer of Residential Brad Whitcomb said.

“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.”

The average congestion period is now 18 minutes per week, NBN added, down from almost seven hours this time last year.

Across its fixed-line network — made up of fibre to the premises, fibre to the node, fibre to the basement, fibre to the curb, and hybrid fibre-coaxial — just 0.068 percent of premises have experienced network congestion, down from 0.370 percent in March last year.

However, network availability was down from 100 percent this time last year to 99.93 percent in March, and faults are now averaging one in 100 premises, up from 0.9 in 100.

As of March, NBN said 87 percent of premises now have their “equipment installed right the first time”, up 2 percentage points since this time last year; 92 percent are “connected within the agreed timeframes”, up from 88 percent in March last year. Around 83 percent of faults are resolved within agreed timeframes, up from 65 percent.

Over 6.5 million premises are now able to connect to the NBN, with 3.7 million connected.

Thanks to its previous wholesale pricing discounts, the Australian Competition and Consumer Commission (ACCC) in February said RSPs had increased their connectivity virtual circuit (CVC) capacity, with a rise of 38 percent in the quarter to December.

According to ACCC chair Rod Sims, the average NBN CVC bought by retailers per user increased from 1.11Mbps to 1.53Mbps, with NBN contracted to supply 5,385Gbps of CVC capacity by the end of December.

This followed NBN providing RSPs with a temporary credit for acquiring 50 percent more CVC, and pricing 50Mbps access virtual circuit (AVC) the same as 25Mbps.

NBN in December unveiled its wholesale pricing changes following debate with industry, with the decision providing discounts for retailers offering services on its 100Mbps and 50Mbps speed tiers.

Under the changes, NBN’s access and bandwidth charges were also bundled together across CVC and AVC for the two top-tier plans.

The 50Mbps wholesale bundle costs retail service providers AU$45 per month — a 27 percent discount — and includes 2Mbps of bandwidth, while the 100Mbps wholesale bundle was reduced by 10 percent to cost AU$65 for 2.5Mbps of included capacity.

The ACCC last month also found in its fixed-line broadband speed monitoring report that NBN retailers are delivering up to 90 percent of their speed tier promises during peak hours, with Telstra, Optus, TPG, and iiNet delivering between 80 and 90 percent of their speeds at all times, including the busy hours of between 7pm and 11pm.

According to Sims, the results “reflect significant and recent changes in the market”, including NBN’s CVC discounts and the ACCC’s speed advertising guidance.

“[NBN performance] has considerably improved because the NBN has made available, at the same cost, more bandwidth. That means more people are getting the speeds that they are paying for,” Australian Prime Minister Malcolm Turnbull said last week.

“Clearly, we want everyone to have a very good telecommunications … satisfaction levels are improving and the good thing — the thing that I’m particularly pleased about — is that we’re getting an improved performance appraisal from the ACCC. They’re impartial.”

Any underperforming services were more likely to have been impacted by “limitations” in the network, the ACCC said, rather than by congestion or a lack of CVC provisioning by RSPs.

The ACCC speed monitoring report followed the consumer watchdog forcing Telstra, Optus, TPG, iiNet, Internode, Dodo, iPrimus, and Commander to compensate tens of thousands of customers for not providing them with the NBN speeds they were paying for.

Outgoing NBN CEO Bill Morrow had previously criticised retailers for cutting corners by focusing on pricing rather than speeds or quality of service after he revealed that the average bit rate per user was around 1Mbps, while RSPs including Vocus, Vodafone, MyRepublic, and Macquarie Telecom argued that the only reason retailers are not offering gigabit speeds is the CVC pricing structure.

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