NBN Co makes move to sell more 100Mbps-plus services

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NBN Co makes move to sell more 100Mbps-plus services

Offers temporary $160 rebate.

NBN Co will look to raise the number of 100Mbps-plus users on its network before the end of the financial year with a $160 rebate offered for each customer that retail service providers sign on.

The rebate, announced this afternoon, is only a temporary offer and is set to finish by the end of June this year.

The proportion of - and manner in which - the rebate is passed through to the customer is not prescriptive, though it appears some RSPs will hit the market with temporarily reduced prices.

“With almost three quarters of Australian homes and businesses now able to connect to services over the NBN access network we are ramping up our efforts to drive take-up of services,” an NBN Co spokesperson told iTnews.  

“NBN Co is working with retailers to encourage their customers to connect to the network sooner and experience faster speeds.

“Ensuring home and businesses connect early will help grow the rollout and the business model of the NBN network in the medium term.”

Technical documentation shows that the rebate applies to 25-100/5-40Mbps services, 100/40Mbps, 250/100Mbps, 500/200Mbps and 1000/400Mbps services.

It also appears the rebate will be paid out for existing NBN customers that migrate to these higher tier services.

Aussie Broadband managing director Phillip Britt told iTnews that his company "is pleased NBN Co is offering the rebate for new 100/40 customers." 

"We’re big believers in faster speed tiers – about 27 percent of our customers are currently in the 100/40 tier," he said.

"We’re now looking at how we offer incentives under this plan to new customers to encourage them to sign up to the 100/40 tier."

MyRepublic will launch a discounted 100Mbps plan tonight at $79.95 a month for 12 months, instead of its usual $89.95 a month.

Managing director Nicholas Demos told iTnews the company would make the offer to its existing 50Mbps users to upgrade, as well as to new sign-ups.

Comment was being sought from other RSPs at the time of publication.

In FY18, 100/40Mbps services made up 11 percent of all active fixed line services, down two percent from the prior year.

One reason for this is likely to be that, at least under a newer wholesale price structure unveiled in December 2017 and which took effect in the back half of last year, 100Mbps plans come in at a significant premium of $20 a month compared to the next-highest tier, 50Mbps.

NBN Co has expended a lot of effort trying to establish 50Mbps as the most attractive speed tier on the fixed-line portion of the network, both from a price and performance perspective.

It’s unclear if the temporary price promotion on 100Mbps sign-ups will attract enough new sign-ups to have a material impact on lifting NBN Co’s average revenue per user (ARPU).

As pointed out by former NBN Co CTO Gary McLaren last week, questions remain over how the network builder is going to be able to meet its ARPU targets, even if it is successful at achieving growth targets for its new enterprise business.

In a lengthy paper published online, McLaren argues ARPU is likely to stay closer to its current $44 a month and remain unhelpful to NBN Co achieving its financial goals.

NBN Co’s interest in driving take-up of 100Mbps services is likely to jar with previous commentary by the Coalition of the need for such speeds among Australians.

It could also be a friction point for users in the fibre-to-the-node (FTTN) footprint, where a significant proportion of lines are said to not be capable of hitting topline 100Mbps speeds (albeit that they may be able to achieve a speed that is close).

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