Nextgen Networks has stopped taking new connection orders for its NBN virtual connect product after claiming technical changes to be introduced by NBN Co would force it to spend big to change its infrastructure.
Nextgen became the first to offer sub-wholesale products on the NBN in 2011. Its “NBN Connect” product suite offered retail service providers the fibre backhaul to connect Nextgen's 90 national points of presence in data centres across the country with NBN Co's planned 121 points of interconnect.
But in a recent letter to RSP partners, sighted by iTnews, Nextgen advised it would no longer process any new connection orders for the product, and would additionally hike the price of existing NBN virtual connect services by 50 percent from the start of February next year.
It claimed recent "architectural and technical design changes" made by NBN Co to the network had meant Nextgen would need to make a "significant investment" to introduce "technology changes" across its own infrastructure.
“[As a result], we will not be processing any new connection orders effective immediately as we develop our plans for the NBN Virtual Connect business. This also applies to orders placed but not yet provisioned," the company advised.
A spokesperson for Nextgen told iTnews the company had considered its design options and had "unfortunately" come to the conclusion that prices would need to be increased for existing services.
NBN Co declined to provide detail on the specific technical changes that will come into effect in January, but iTnews understands the company is performing minor system upgrades to its UNI-V ports.
A spokesperson said only that the company was "implementing an upgrade to the network to improve functionality and performance".
Nextgen is pushing customers to churn off its virtual connect services to an "alternative supplier" by waiving early termination fees for those who move off by December 1.
"We fully understand the commercial impact to customers and have offered to support those who have elected to migrate to alternate service providers," a spokesperson said.
"In doing so, we have also waived exit and termination fees in each of the service contracts so that customers can enjoy the added flexibility in selecting the most appropriate solution for their business."