Monday, 10 December 2018 05:43

NBN Co looks to earnings from businesses to avoid write-down Featured

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NBN Co looks to earnings from businesses to avoid write-down Pixabay

The NBN Co, the company rolling out Australia's national broadband network, plans to create new plans for businesses in order to earn $1 billion in revenue from the sector.

The new plans will be 30% to 50% cheaper than those available and will include high speeds and data quotas, a statement from the company said on Monday.

The move is part of the company's efforts to raise its average revenue per user which $44 when it announced its latest quarterly results, the same as that for its fill-year 2018.

The new plans aim to raise one fifth of revenue from businesses, compared to about 15% at the moment.

The new wholesale discount bundles will be:

  • Wholesale speeds of 50/20Mbps optimised for smaller businesses;
  • Wholesale speeds of 100/40Mbps with support for multiple phone lines for medium-sized businesses;
  • Wholesale symmetrical committed speeds of 20/20Mbps and a 100/40Mbps peak information rate; and
  • Wholesale symmetrical committed speeds of 50/50Mbps and a 250/100Mbps peak information rate for data-intensive and multi-site organisations.

NBN Co had a Focus on 50 scheme in operation during the year which resulted in 53% of homes and businesses taking plans with this speed.

NBN Co’s chief customer officer for Business, Paul Tyler, said: "We’ve undertaken extensive research with Australian businesses and our service providers which reveals increased service assurance, high speeds and committed bandwidth are the most important factors for businesses connecting to the NBN access network.

“We recognise some businesses are on NBN powered plans that have not been optimised for their needs. Businesses should speak to their service provider about whether they require high-speeds for cloud applications, committed and symmetrical information rates for audio and video conferencing or increased service assurance for business-critical applications.

“NBN Co does not set retail prices. However our new wholesale discount bundles are designed to incentivise retailers to offer these business-grade services to improve customer experience on the network.

“We’re committed to continually working with the industry to invest in our wholesale product and service suite such as our business-grade satellite service, which is due to launch in 2019 and designed to benefit regional and rural organisations.”

NBN Co chief executive Stephen Rue said during the last results announcement: "Fifty-three percent of all homes and businesses are now on a 50 Mbps wholesale download speed or higher, with 70% of new customers opting for these higher speed plans each month.

"We know our pricing decisions last year are having the impact we intended, that is, to help provide a good experience for homes and businesses using the network."

The company has said in the past it needs to achieve ARPU of $52 in order to avoid a write-down.

In October, NBN Co chairman Ziggy Switkowski told a Senate panel that the company could fetch a price of $50 billion once the rollout was completed by 2021.

He added that in his personal opinion a write-down of the network was not necessary.

The Coalition Government has ruled out a write-down of the network.

But Shadow Communications Minister Michelle Rowland has said the Labor Party is keeping open the option of writing down the value of the NBN if it won the next federal election, which is due by May 2019.

And in July, the ratings agency Standard & Poor's said the NBN would not return a profit from the billions invested in the project, adding that the NBN Co's business model had led to telcos investing heavily in mobile services to avoid paying the company's inflated prices.


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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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