Telstra calls for fairer NBN wholesale pricing

The NBN has been a contentious issue for telcos recently, particularly in regard to the wholesale pricing structure. Many service providers have been calling for a review of NBN’s wholesale pricing, which could lead to lower prices for consumers as well.

Telstra CEO Andy Penn recently posted on the Telstra Exchange blog page, highlighting the importance of our national communications infrastructure and calling for a reduction in wholesale pricing, echoing similar statements from Optus and others.

The post links to a study showing that Australia has the second highest wholesale broadband pricing in the world for connections 50Mbit and faster.

In the post, Penn suggests the following changes;

  1. Removal of the separate volume-based pricing charge (CVC).
  2. Simpler single-point pricing for the standard NBN speed tiers (50/20 and 100/40) with prices reduced by around $20.
  3. Lowering of the price for superfast services (250Mbit and up) to under $100.
  4. Introduction of a $10 per month voice-only service.
  5. Introduction of a wholesale price discount for targeted vulnerable and low-income customers in need.

The suggested changes would benefit both retailers and customers – retailers for their ability to apply margins without overpricing the product, and consumers for a likely lower overall monthly cost for an internet connection, as well as more competition in the market allowing for better choices.

“An industry where wholesale prices result in zero margins for the downstream retail providers is unsustainable. It will result in higher retail prices, reduced competition and retail providers looking for ways to bypass the nbn altogether – which is bad for customers and bad for the industry,” said Penn.

While the change in speed from ADSL2+ to NBN is significantly better, the deployment doesn’t look so good on a global scale. Other countries like the United Kingdom and New Zealand who are rolling out national broadband are doing so with lower wholesale costs and more affordable subscriptions, with as fast, or faster, connection speeds.

Australia’s NBN connections are still moving forward, but it’s not hard to see that the network has been slow to market, and compared to other countries’ networks, already outdated technology. Reform is needed to ensure the network is available for all and remains a competitive option for customers and businesses alike now and in the future.

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