NBN Co grants existing 50Mbps fixed wireless users a $45 bundle

NBN Co will grant existing fixed wireless users on its 50Mbps tier a reprieve by offering them the same $45 a month wholesale deal as fixed line users were given last year - but new users will pay $20 a month more for the privilege.

Chief financial officer Stephen Rue revealed to a parliamentary committee that NBN Co will launch new fixed wireless discount bundles on Monday August 20.

For existing users on the highest fixed wireless tier, the new bundles are what retail service providers like Aussie Broadband have spent months lobbying for.

NBN Co was criticised last year when it launched a new price model that bundled the cost of accessing its network with a minimum amount of bandwidth per user, but confined the offer only to fixed line users.

The company’s main wholesale offer to date has been an NBN50 tier bundle of its aggregated virtual circuit (AVC) charge and 2Mbps of connectivity virtual circuit (CVC) capacity for $45 a month.

It has been well-received by fixed line users, with about 1.5 million signing on to use the bundle, according to figures earlier released this week.

Now, existing NBN50 users on the fixed wireless network will get the same wholesale deal, following protracted negotiations with industry.

However, NBN Co has revealed that new sign-ons to the NBN50 tier will be treated differently: they will pay $65 a month wholesale for the same bundle, instead of $45.

“Having listened to the industry, we’ve decided to say to the industry that for existing users of a 50/20 service we will charge $45 for that service, which equates to the service on a fixed line,” Rue said.

“If a retailer chooses to put a new customer onto a 50/20 bundle service that will be at $65 and that in part is due to the incremental cost that is incurred if people use the 50/20 service to the full extent.”

[Breaking News: NBN Co has axed the $65 charge after government intervention]

Uniform pricing is dead

The decision to charge new sign-ups $65 a month wholesale for the NBN50 fixed wireless bundle instead of $45 a month confirms fears that NBN Co is set to dissolve uniform wholesale pricing on the network.

Rue said that “is something we’re aware of and we’ll continue to work with industry around future product constructs.”

He suggested that users that end up paying $65 a month wholesale would not be stuck paying $20 a month more than existing users for the same service “forever”.

“We have decided for new customers that will remain at $65 but I don’t think that’s forever,” he said.

“We continue to discuss with the industry around appropriate products to launch into the market at appropriate price points.

“It’s too early to pre empt what those products might be but we’re very conscious of the fact we need to provide a service to people on the fixed wireless network that meets their needs.”

However, the move is likely to damage the company’s position that it is not creating a digital divide between metropolitan and regional and rural Australia.

Labor MP Susan Templeman, whose constituency includes the Blue Mountains and the Hawkesbury on Sydney’s western and north-western fringe, said neighbours in her electorate would now be paying “significantly different bundled prices”.

Her constituency are served by a mix of fibre-to-the-curb (FTTC), fibre-to-the-node (FTTN) and fixed wireless access technologies.

Templeman asked Rue whether NBN Co would consider “smoothing prices in a single [rollout] region” so that neighbours paid the same wholesale input.

Rue deflected the question, before suggesting that retail service providers could be left to absorb the significant wholesale differential.

“I can’t comment on what the retailers will do,” he said.