Launtel chief executive Damian Ivereigh had, in a blog post, said small RSPs would face issues by October because that was the time when the bundles sold by NBN Co would more or less become the single way that RSPs buy bandwidth from the company.
In a note sent to customers — the writer is among them — MyRepublic said it had been offering a single, unlimited 100Mbps plan for $69.99 until now, in the hope that it would be able to negotiate competitive pricing from NBN Co.
MyRepublic chief Nicholas Demos told iTWire that the NBN Co had reduced its wholesale price for the 50Mbps plans to $45 in December. But the wholesale price for the 100Mbps plans had remained high, at $65, which made it impossible for his company to continue with its $69.99 price.
Ivereigh said in his blog post that, given smaller RSPs did not have the scale to connect directly to the NBN, they had been buying from big telcos like Vocus, Optus, TPG, Telstra and Wideband. The smaller players give up a slice of their margin to the larger firms, which meant that their earnings would be reduced.
Demos said MyRepublic was now directly connected to 100 of the 121 points of interconnect and it would be connected to all by the middle of next year. But even at that point, he said it would not be be possible to think of lowering prices. For that, the NBN Co would have to offer 100Mbps wholesale prices of about $52.
He said the number of people overall on 100Mbps plans had fallen in the last quarter whereas the number on 50Mbps plans had gone up. There were some ISPs who could not offer 100Mbps plans due to technical reasons and their sales had improved after December when the wholesale price for the 50Mbps plans came down.
However, Demos remained hopeful that the situation would improve, but said for the foreseeable future he had no option but to hope that his customers would understand and stay with MyRepublic.