NBN eyes changes to fixed wireless pricing, voice-focused product

NBN is planning to offer two new bundled offerings for retail service providers (RSPs), with the wholesaler launching new consultations with telcos on the proposals.

NBN intends to introduce a new low-end product designed primarily for voice and a new pricing option for its fixed wireless service.

NBN CEO Bill Morrow foreshadowed the launch of the consultations last week at a Senate Estimates hearing.

The move follows the launch in May of NBN’s newest wholesale pricing constructs, with the company for the first time offering time bundled products for retailers. Unlike earlier products, the new 50Mbps and 100Mbps products include a small amount of capacity in the monthly price. Previously NBN had separate access (AVC, charged per user) and capacity (CVC, shared between all users) charges — with under-provisioning of capacity a key source of slow speeds for some end users.

The introduction of the bundled products, and a discount on the wholesaler’s legacy, non-bundled 50Mbps product in the lead-up to the May launch, was in part an effort by NBN to drive better uptake of higher-speed services among end users.

The new low-end product NBN plans to introduce will be a replacement for its current 12Mbps offering. Morrow told the Estimates hearing that the 12Mbps service offered by NBN had originally been intended to support voice services — “So those people that didn’t have video streaming needs, as an example,” the CEO said.

“What we want to do is we want to think of a construct that actually uses that 12 for its original purpose and doesn’t have this, ‘let me pretend it’s going to provide all your broadband needs when it doesn’t,’” he added.

In August last year Morrow similarly told parliament’s standing committee on the NBN that the 12Mbps product “was never designed for broadband”.

The CEO added: “It was designed for a voice-based product in case somebody in a home says: ‘I don't want to surf the internet over that network; I'll use my mobile device or nothing. I just want a phone service.’ The 12-meg product was created for that.”

However, Morrow said that because it was cheaper than NBN’s 25Mbps product, retailers had been pushing it as a low-speed broadband option.

“Hence the question: should we have that 12-meg product in the market at all? This is part of the consideration that we have,” Morrow said at the time.

NBN is now proposing to offer a new entry-level budget service that has a wholesale monthly price of $22 and includes 50Kbps of capacity, which it says will be enough for a telephone service and basic email and web browsing. (Capacity is shared between an RSP’s users — so an individual connection will be capable of achieving greater than 50Kbps.)

NBN’s executive general manager of wholesale products and pricing, Tom Roets, detailed the proposal in a blog entry.

“It should be noted this entry-level bundle is suitable for phone and internet providers whose customers use little to no internet and, instead, want to have a home telephone service via the nbn™ access network,” he wrote. “The current nbn™ 12 product has always been intended as a primarily telephone service designed for those who have basic internet needs.

“Unfortunately, many households purchased this nbn™ access network plan via their internet provider assuming it included fast broadband. Some end users didn’t realise it did not provide them the speed or capacity needed to meet their needs, especially during peak usage times.”

Roets said that NBN planned to introduce a new wholesale pricing option for fixed wireless by the end of September.

“The aim would be for the fixed access and bandwidth price options to remove the requirement to retain separate charges for providers to support Fixed Wireless services under our existing two-part price construct and improve the economies of scale for Fixed Wireless from internet and phone providers,” the NBN executive wrote.

Morrow revealed at the recent Estimates hearing that NBN had killed its plan to offer a 100Mbps fixed wireless service.