Thursday, 24 January 2019 08:07

NBN Co's 100Mbps move suits ISPs offering contracts: claim Featured

NBN Co's 100Mbps move suits ISPs offering contracts: claim Courtesy NBN Co

The NBN Co's latest promotional move, offering retail service providers $160 for each customer who signs up for a 100Mbps service, effectively requires these customers not to downgrade or disconnect until January 2021, according to the head of a small ISP.

Damian Ivereigh, the chief executive of Launtel, a Launceston-based firm, told iTWire he was not sure that he could craft any promotional offers around it, in the way that other ISPs, like the NSW-based small ISP MyRepublic, has done.

"At this point I don't think there is much I can comment on around this 100/40 discount," Ivereigh said in response to queries.

"We are not yet sure that we can materially use it due to the way it effectively requires the customer to not downgrade or disconnect until Jan 2021 (two years).

"This suits those companies that do contracts for sure. However, not only do we not do contracts, due to our daily pricing, we encourage people to change their speeds or pause their service (which processes a disconnect) when they don't need their service (e.g. when they go on holiday)."

He added: "Unfortunately we break the mould in many ways and we have to accept that some of NBN's discount schemes just don't suit our way of doing business."

NBN Co's move was made on 21 January on an internal document, offering a rebate of $160 to retail service providers for each user who takes up a 100Mbps plan between 21 January and 30 June 2019.

Called the Fast Anytime 100 Rebate, the details are buried in the company's discounts, credits and rebates list.

Ivereigh said he believed that the NBN Co had made this offer because, during its effort to push 50Mbps connections - a campaign called Focus on 50 - not only had many people taken up 50Mbps connections, a portion of the market had downgraded from 100Mbps to 50Mbps.

"This was because the price construct of both Focus on 50 and the new bundles make the 50Mbps relatively cheaper. Indeed under the new bundles, the 100Mbps plans went up in price. Some companies (e.g. MyRepublic) started offering 50Mbps plans for the first time."

The NBN Co's move is geared towards raising its average revenue per user towards the figure of $52 which will enable it to break even.

The ARPU has been stuck at $44 for a while; it was at this level when the company announced its latest quarterly results, not moving an iota since its full-year 2018 results.

NBN Co had pushed 50Mbps plans for a while, under a campaign known as Focus on 50. In December last year, the company announced new plans for businesses in order to increase its revenue from the sector.

MyRepublic appears to be the only company that has reacted immediately to the NBN Co's move, by offering 100Mbps plans that are $79.95 per month, a $10 decrease from its existing price, for an unspecified period, as iTWire reported on Monday.

iTWire asked a few other RSPs whether they had any promotional plans on the anvil. An Aussie Broadband spokesperson said the company had plans to introduce some new 100Mbps plans but was yet to work out the details.

A spokesperson from Vodafone Hutchison Australia said it was maintaining in-market pricing and offers at the existing level at the moment.

A Telstra spokesperson said the company was looking at the details of the NBN Co's announcement but had not made any decision to offer new plans yet.

Optus was also contacted, but did not respond to iTWire's request before publication.

Update, 25 February: An Optus spokesperson said: "Optus regularly reviews our NBN pricing plans, and our competitors' offers, to ensure we continue to deliver great value to our customers.

"We believe any measures to improve customer experience will be welcomed by our consumers."

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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