Leading retailers of Australian broadband ISP services say the NBN pricing model is broken, making high-speed internet connections too expensive for most domestic customers.
Managing Director of ISP retailer MyRepublic, Nicholas Demos has told IA that the NBN Co must reduce its controversial connection charges to retailers. He is among several NBN retailers calling on NBN Co chief Bill Morrow to admit it has made a mistake and to start over on its pricing models.
The NBN levies a connectivity charge, the CVC, which retailers purchase in 100 megabits per second Mbps, as well as a second access charge, the AVC. These charges apply to each individual subscriber that the ISP retailer signs up.
In all, the wholesale NBN pricing structure has four components and the average charge per connection is around $24. It is very complicated and MyRepublic’s Nicholas Demos says this is the major point of contention between the retailers and the NBN Co.
Said Nicholas Demos:
“At the moment, with the CVC and AVC charges, the pricing structure discourages people going higher speeds because it’s too expensive. Some players have cheaper products, like a $29.99 per month price point. But that’s ridiculous and it’s only a speed of 12Mbps download and 10Gigabytes of data. That’s not what the NBN is about, you get more data on your phone.”
MyRepublic is offering a trial retail package at a site near Wollongong, called Gigatown, where a 1 gigabyte download speed is being offered for $129.99 per month.
Mr Demos says customers seem willing to pay this for better speeds.
“NBN Co has acknowledged its pricing model is wrong,” Mr Demos says. Retailers can now get discounted CVC fees, which he says demonstrates that the NBN Co knows the model is not working.
“We know NBN Co is looking at it because they’ve acknowledged the pricing model needs to be changed,” he said.