NBN Co's 12Mbps user base falls below one million

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NBN Co's 12Mbps user base falls below one million

Exodus begins - to higher tiers or elsewhere - from Vocus and TPG.

NBN Co is servicing 166,569 fewer premises on the lowest 12Mbps tier than just three months ago, with Vocus and TPG seeing particularly large falls in their 12Mbps user bases.

The numbers are contained in the latest NBN wholesale market indicators report [pdf] published quarterly by the Australian Competition and Consumer Commission (ACCC).

Exodus accelerates

The exodus from the 12Mbps tier is likely to be even larger in the next couple of reporting periods due to a series of changes to how 12Mbps services are sold.

The next reporting period will include the impact of retail service providers like the Vocus-owned brands iPrimus and Dodo stopping the sale of new 12Mbps plans.

Then, the following quarter will show the impact of changes by NBN Co to how it charges for 12Mbps services, which involve price hikes as well as the removal of the tier as a broadband option in newer "bundled" products.

These changes were originally meant to take effect in May but were pushed back to July 31.

Even without these two events, however, NBN Co’s sustained attacks on the 12Mbps tier appears to be working, with users now making an exit.

Destination unknown

Just where they are going is unclear: it’s impossible to work out whether they shifted up to faster, more expensive plans on the NBN, or decided to move off NBN altogether.

For the quarter ended March 31, the total number of 12Mbps dipped below one million users. It fell from 1,164,507 users down to 997,938.

At TPG, there are now 97,592 fewer 12Mbps users in the space of three months. Vocus saw a similar reduction of 76,593 users with 12Mbps services.

About 7100 12Mbps with RSPs too small to break out separately also moved off 12Mbps services during the last quarter.

In fact, only one RSP - Telstra - grew its 12Mbps user base in the quarter. It signed up another 15,630 users to the tier.

Overall, the evidence suggests RSPs were mostly able to keep customers that shifted off the 12Mbps tier.

Both TPG and Vocus had modest net gains in customer numbers during the quarter: Vocus added 19,851 NBN customers overall - during a period where it isn’t even marketing to attract new sign-ups.

TPG also saw quarterly growth of 85,199 users, despite the changes in its 12Mbps user base.

Switcheroo

The ACCC said the evidence before it indicated that “consumers are switching from the lower speed NBN plans” though it did not provide a breakdown.

It said the number of consumers on the entry level 12Mbps speed plan “declined for the second quarter in a row.”

ACCC chair Rod Sims said the commission remained concerned - as it had laid out in February - about the future affordability of NBN services.

“Although the number of consumers on [12Mbps] plans has dropped, they still account for a significant number of NBN users,” Sims said.

“We would be concerned if the options to acquire entry level plans declined, either through availability or higher prices.

“Indeed, we continue to have concerns about the impact of NBN pricing changes on affordability of entry level plans for those consumers who only require a basic service.”

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