Telstra says new price models drafted by NBN Co would push up retail prices and create more revenue per user than is currently expected.
NBN Co put three price constructs on the table in June that either retain the status quo or offer a partial or full implementation of flat wholesale pricing.
The full flat price construct is the most favoured, but retail service providers (RSPs) have so far struggled to make sense of the numbers and how they have been reached.
The flat price construct, as proposed by NBN Co, would mean an immediate $5 to $20 a month hike in prices across the board, and yearly indexed increases of an unspecified amount above the rate of inflation.
Both Telstra and TPG Telecom questioned the origin of the numbers and the assumptions used by NBN Co to reach them.
“Telstra’s key concern is that there appears to be no basis for the proposed prices,” it said in a regulatory submission.
“It is difficult to compare NBN Co’s construct proposals,” TPG Telecom added.
Telstra is convinced, however, that the proposals disproportionately benefit NBN Co over any other party.
“The proposed variations result in significant change compared to the existing [prices],” Telstra noted.
“While they may provide significant benefit to NBN Co, they will cause material harm to end-users.
“Notably, the proposals deliver a substantial wholesale price increase and significant regulatory and price protection to increase prices further, while providing no incentive for efficient expenditure on the network.”
Telstra said that the price of the 50Mbps tier alone would jump an estimated 20 percent. It also said that the constructs would “result in significantly higher average revenue per user (ARPU) for NBN Co… far exceeding their corporate plan target ARPU of $49 in FY24”.
However, it claimed commercial in-confidence over just how much above $49 it believed ARPU would go.
Before NBN Co put forward its new constructs, Telstra had predicted NBN Co would breach $55 a month ARPU by the end of FY23. That was largely based on a continuation of the status quo, so it is unclear if Telstra’s redacted ARPU concerns would be in excess of this number or not.
TPG similarly produced modelling of the constructs and similarly had that modelling redacted from its public submission to the Australian Competition and Consumer Commission (ACCC).