NBN Co walks back wireless pricing proposal

NBN Co’s CEO Bill Morrow said today that the company would dump a proposed pricing construct that could have seen the wholesale pricing of some fixed wireless NBN services pegged at $20 above an equivalent fixed line service.

Last night chief financial officer Stephen Rue said that NBN Co was planning a new 50/20Mbps fixed wireless product that would be bundled with an amount of bandwidth to be shared among a retail service provider’s customers.

The product would have a wholesale price of $65 a month — $20 more NBN Co’s 50/20Mbps bundled fixed line offering. Current pricing of $45 for existing fixed wireless users would be maintained, the CFO said.

Rue said that telcos would still be able to purchase the company’s “legacy” fixed wireless products, which share identical pricing to their fixed line equivalents.

Morrow said today that the product was merely an idea raised by NBN Co during a consultation with RSPs.

Fixed wireless is primarily used for connecting regional areas to the National Broadband Network and NBN Co’s proposal drew the ire of shadow communications minister Michelle Rowland and shadow minister for regional communications Stephen Jones.

“This is a very troubling development,” Rowland said in a statement released this morning. “The NBN was supposed to bridge the digital divide – not create a new one.”

Communications minister Senator Mitch Fifield subsequently released a statement that denied that “NBN intends to charge more for fixed wireless services compared to fixed line services”.

“NBN is embarking on a fresh round of product consultations but have made no decisions,” the minister said.

“NBN offers equivalent pricing on comparable fixed line and fixed wireless products. The government will ensure that this continues.”

Rue last night told the committee in his opening statement: “Following industry consultation, which is now complete, NBN Co will launch new fixed wireless discount bundles on Monday 20th of August to Internet providers. We listened to feedback throughout the consultation and have kept the bundled price of the 50 megabits per second product at $45 for existing users.”

Rue was later asked by Labor MP Brian Mitchell whether if somebody on a fixed line 50Mbps bundled service with wholesale pricing of $45 moved to a fixed wireless area then they would be paying $20 more.

“If the retail provider chooses to purchase a bundled 50/20 product from us, that will be $65,” the CFO said

An NBN Co blog entry based on Rue’s opening statement now includes a line stating: “We are consulting on a ‘Max’ bundle at around the same price point. We hope these discussions can be concluded in around nine months’ time.”

Morrow said today at NBN Co’s full year results briefing that the Max product would be based on the maximum achievable speed in a wireless cell.

“That will be targeted at a $45 price point and it will be a one product that suits all,” the CEO said.

However if it goes ahead with the Max product it will be “eight or nine months” before NBN Co could bring it to market, the CEO said.

Morrow said that NBN Co’s proposal to RSPs had been that as fixed wireless users were migrated to bundled products, that pricing for existing customers with 25Mbps and 50Mbps services be set at $45. However, in order to avoid the fixed wireless infrastructure being overwhelmed with higher speed services the price of new 50Mbps services would be set at $65 during the transition period.

“This was meant for nothing more than a consultation to say ‘how do you feel about that,’” the CEO said.

“Looking at the reaction behind this, knowing that it wasn’t that pivotal — again it’s a consultation, of asking the question — I’ll just take it off the table right now,” Morrow said.