Aussie Broadband sets $55 floor for NBN internet charges

Aussie Broadband will stop offering sub-$55 a month NBN internet plans from next month as it transitions customers over to NBN Co’s permanent bundled pricing.

The company said in a blog post that the decision would result in a “price increase for 7528 or nine percent of our customers”.

Customers will “have a choice at this point whether stay or go”, and the retail service provider said it would understand if they went elsewhere - such as to 4G - based on specific needs like low usage requirements.

Aussie’s decision is one that many retail service providers will have to face this month as crunch time hits on changes to NBN Co’s wholesale pricing.

Two price models are now being offered by NBN Co: an old model where the aggregated virtual circuit (AVC) and connectivity virtual circuit (CVC) charges are separate, and a new model where they come bundled together.

The bundled model is being heavily pushed by NBN Co since it essentially guarantees internet users a minimum internet performance guarantee. The bundled pricing, however, starts at $49.50 wholesale a month.

From November, retail service providers must decide whether to keep users on the old pricing or switch them over to the new pricing, with its increased basic charges.

They can have customers on both the old and new models, but would have to run two sets of infrastructure in that instance. Therefore, most see it as an either/or choice.

Optus has already had to put its NBN prices up after it chose to migrate users to the new price construct.

Aussie Broadband said today it would also move all its customers over to the new price model, noting that it would be cost prohibitive to keep customers on plans based on the old price model as well.

It actually made this decision back in June but was unsure at the time what to do with customers that could not afford the new NBN retail prices.

“NBN Co will say that “providers can continue to use the old pricing” which is true, but it requires a provider to have multiple CVCs in operation, [and] this is something we can’t support at our scale,” Aussie Broadband said.

Aussie Broadband acknowledged that a new minimum retail NBN price of $55 a month would not go down well with everyone.

“We know this change won’t be popular but we can’t move forward offering plans that are below [the new wholesale] cost price,” it said.

“We have waited until the very last minute to make this change so that customers could take full effect of the old pricing model before we transitioned across.”

Aussie Broadband will still offer a voice-only NBN service at $35 a month.