Top broadband retailers want cheaper NBN prices

Telecom utility tower

Australia’s top internet service providers have submitted documents to the Australian Competition and Consumer Commission (ACCC) proposing a restructure of the National Broadband Network pricing model that would see NBN Co take less revenue per customer to drive prices down. 

The joint submission by Telstra, Optus, TPG Telecom, Aussie Broadband and Vocus argue that NBN Co are making $15 more per customer than they should be, after the ACCC sought suggestions for a new pricing model earlier this year. 

The top five service providers have banded together to contend NBN Co needs to lower the cost they take per customer in order for prices to drop across the network, while NBN Co counters it is “currently under-recovering” costs and could be charging more per customer. 

NBN Co’s average revenue per user stood at $45 per month at the end of June this year, with the internet service providers arguing that cost should be lowered to $30-$35 per user per month for the financial years 2021-2025. 

The submission delivered by the top service providers contends that a reduction in wholesale costs to the level they have proposed would still offer NBN Co the ability to make a fair return, while allowing a drop in prices for consumers that would increase the uptake of broadband services around the country. 

“The measure of success should be how many more Australians can we connect to the NBN and how much more can we encourage them to use the NBN,” a combined statement from the service providers read.

The top five service providers, who collectively account for more than 96% of all active fixed-line users, have frequently banded together when seeking changes from NBN Co, such as arguing against the CVC pricing model. 

The ACCC have previously flagged the need for a new pricing model that would require NBN Co to separate its building and infrastructure costs into ‘efficient’ and ‘inefficient’ categories, limiting NBN Co to recovering only costs that were considered efficient. 

The service providers have requested NBN Co break down its costs for years, however figures have never been released to them. They hope with the categorisation of costs NBN Co will be forced to lower its cost per customer, however NBN Co still argue they could be charging more.

NBN Co has yet to reveal their proposition for the new pricing model, with the ACCC waiting to take their submission into consideration before any decisions are finalised. 

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Last updated 22 July 2024