Friday, 15 November 2019 13:29

Competition in NBN wholesale market growing, says ACCC Featured


Competition by wholesale access seekers to connect to the National Broadband Network is heating up, with at least nine wholesalers now connecting directly to the NBN and with over 6.1 million residential broadband services being delivered by the NBN across Australia.

The latest quarterly Wholesale Market Indicators Report from the competition regulator, the Australian Competition and Consumer Commission (ACCC), reveals that more than half a million new services were added in the three months between July and September this year - and more wholesale access seekers are directly connecting with the NBN at more NBN points of interconnect (POIs).

The report reveals that there were at least nine different wholesale access seeker groups directly connected to the NBN at all of the 121 POIs in the September quarter, while at least ten access seekers were connected at 119 of the POIs.

Telstra remains the dominant acquirer of wholesale NBN services, with 48.1 percent of all connections.

But, while market shares vary each quarter, the ACCC says Telstra’s market share has declined from a peak of 50.1 percent in June 2017, and TPG Group’s market share has fallen from about 23.4 percent to 22 percent.

During the same period, Optus increased its market share from 12.8 percent to 15.2 pe cent while Vocus’ share fell slightly.

The collective share of other access seekers increased from about 5.7 per cent to 7.3 percent.

The NBN wholesale access services are used by an NBN access seeker to supply a retail service to its own customers or, alternatively, to supply a wholesale service to another Retail Service Provider (RSP) - and most small RSPs do not directly connect with the operator of the NBN - NBN Co - instead reselling NBN services acquired from other NBN access seekers such as Telstra, TPG and Optus.

“We are pleased to see smaller service providers steadily acquiring services in more places across Australia. This continues to encourage healthy competition for the benefit of consumers and businesses who rely on the NBN,” ACCC Chair Rod Sims said.

The number of higher speed plans taken up by Australian consumers continues to increase. Almost two thirds of all NBN services are now higher speed services of 50Mbps and above.

50Mbps plans continue to be the most popular, comprising 57.1 per cent of all NBN residential services, while 100Mbps plans account for 8.5 per cent.

While access seekers have taken advantage of promotions and wholesale bundles to entice consumers onto higher speed plans, more than 2.1 million Australians remain on 12Mbps and 25Mbps plans. Just over 1 million consumers are on the entry-level 12Mbps speed tier.

“These lower speed products play a crucial role in the transition from legacy services to the NBN. The ACCC is committed to ensuring that customers who have no need for, or do not want, higher speed services have access to basic affordable broadband products on the NBN,” Sims said.

In October the ACCC announced an inquiry into NBN wholesale charges with a focus on entry-level products.

Connectivity Virtual Circuit (CVC), which is the NBN bandwidth acquired by wholesale access seekers to provide data to their customers, increased 3.2 percent on a per user basis over the quarter from 1.75Mbps to 1.80Mbps - a growth from 1.01Mbps in March 2016, when the ACCC’s first Wholesale Market Indicators Report was published.

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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