iiNet undercuts rivals with retail NBN prices

By Ry Crozier on Sep 19, 2011 7:08 AM
Filed under Telco/ISP

Updated: Flagship Terabyte plans with 100 Mbps speeds under $100 a month.

ISP iiNet has revealed it will offer Terabyte plans on the National Broadband Network at a base downlink speed of 12 Mbps for $79.95 a month.

The internet service provider has boiled its consumer NBN products down to three basic plans, all at 12/1 Mbps.

All three came with the option to buy a ‘Turbo pack’ to get faster speeds.

iiNet offered a basic 12/1 Mbps plan with 40 GB of data split into peak and off-peak usage and charged at $49.95 a month. Users could pay an extra $5 a month to bump the speed to 25/5 Mbps.

The next step up was a $59.95 a month product with 200 GB quota. For $15 a month extra, users could step up to 50/20 Mbps speeds.

The top-of-the-range product offered a Terabyte of data for $79.95 a month. For $20 a month extra, users could get the full 100/40 Mbps product.

VoIP services cost an extra $9.95 a month. Once quota was breached speeds were shaped to 256 Kbps.

The peak period was between 8am and 2am the following day.

The prices had been averaged across the country so users at all eventual 121 points of interconnect would receive the same fibre pricing.

"The intention is they’re one size fits all, they’re technology agnostic but clearly this is a long road of 10 years and it may have a few deviations and bumps in it," chief financial officer David Buckingham said.

How iiNet stacks up

iiNet’s products put significant pressure on other ISPs’ prices.

Rival Internode has said it will offer 100/40 Mbps Terabyte plans for $189.95 - almost twice the price of iiNet’s equivalent plan.

Exetel, meanwhile, offered a 100/40 Mbps plan for $99.50 but it came with 200 GB of quota.

However, Exetel still had the cheapest NBN product on the market, starting at $34.50 a month.

Dodo had also been talking up sub-$40 a month NBN products but had yet to announce prices.

iiNet chief executive Michael Malone said the regional focus of NBN meant that customers who previously could only get ADSL1 could “move to NBN speeds and enjoy ten times the quota for the same price they’re paying now."

“With standard off-net access charges offered by NBN Co 40 percent less than currently available in regional areas, we can pass substantial savings on to our customers,” he said.

However, iiNet executives dismissed contention that it could face increased competition or undercutting from larger rivals Telstra and Optus.

"The cost of Telstra or Optus moving to these prices is huge, if you do the maths on their plans. I don’t think they can afford to do it, personally," Buckingham said.

Chief regulatory officer Steve Dalby said the company was not "going to get into a price war".

iiNet for business

The ISP also today revealed business pricing for NBN services.

The plans came at a $30 premium per month over the residential plans, with a basic 12/1 Mbps connection and 40 GB of quota starting at $79.95 a month.

The fattest plan - a Terabyte at 100/40 Mbps - cost $129.95 a month.

The business plans offered a static IP address, on-site hardware troubleshooting, 20 email addresses and shaping at 512Kbps once a business reached their quota.

However, Dalby hinted that the provider would introduce premium business plans with greater upload capability at potentially higher speeds in coming weeks.

NBN Co was yet to introduce wholesale products specifically catered to businesses though iiNet hoped to offer tailored services including a voice-only product.