iiNet cites capacity woes as it withdraws NBN satellite plans

ISP says there were issues with transmission capacity constraints, service quality

Transmission capacity constraints have forced iiNet (ASX: IIN) to withdraw its National Broadband Network (NBN) Interim Satellite service plan from sale as of today, the ISP said. The plan was offering customers 10GB for $39.95 a month.

Subsidiaries Westnet and TransACT will also cease new sales of NBN satellite services.

In August, the retail service provider (RSP) announced that it would stop selling its top-tier NBN satellite service of 20GB per month because it was putting considerable strain on NBN Co's existing satellite service.

iiNet CEO Michael Malone said that existing NBN satellite customers would not be affected by today’s decision and will remain on their current plan.

However, with 42,000 people connected to the Interim Satellite service, transmission capacity constraints were resulting in “severe service quality issues.”

Malone said NBN Co has ruled out providing more capacity for the existing satellite as it will be replaced with a high capacity satellite solution in 2015. The service will deliver 25Mbps downloads and 5Mbps uploads once it goes live.

“We could not continue to offer a service markedly below both our own and our customer’s expectations,” he said in a statement. “During occasional peak periods the service was so slow as to be almost unusable.”

Malone has called for other RSPs to “respect their customers” and cease sale of NBN satellite plans.

The company is now investigating opportunities to move 8000 satellite customers to faster wireless services that are being extended to remote and regional areas by its mobile wholesale partner, Optus.

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