NBN Co to temporarily cut 100Mbps prices starting 2020

NBN Co is hoping to drum up interest in its forthcoming 100/20Mbps product by temporarily lowering the price of 100Mbps services in the New Year.

The company is planning to officially launch its new 100/20Mbps tier in May 2020, which will ultimately live alongside its existing 100/40Mbps product.

There is still no firm word on how retail service providers (RSPs) will treat the two 100Mbps products.

NBN Co earlier suggested that 100/20Mbps might naturally become a residential offering and 100/40Mbps a business offering, though it later said that positioning would be left up to RSPs.

RSPs might choose to offer both services to residential users, with the 40Mbps uplink offered as a premium add-on to account for the $7 difference in wholesale pricing between the two products.

Regardless, NBN Co is looking to start 2020 in much the same way it did 2019, launching a temporary price offer to stimulate demand for 100Mbps products.

“To deliver more immediate benefits to customers, NBN Co will launch a ‘Hot 100’ campaign on 1 January 2020, making the $58 effective charge for the 100/20 bundle discount available to RSPs for the 100/40 discount bundle, instead of the current $65 effective charge for that bundle, as an interim measure until the new 100/20 product is launched in May 2020,” NBN Co said in a statement.

The promotional pricing would also apply to 25-100/5-40Mbps services.

It was unclear how this would work in practice. An NBN Co spokesperson was contacted for clarification.

However, provisional paperwork on the functioning of the discount appears to show it will only apply to certain types of orders: "connect orders, upgrade orders and service transfer orders".

That is likely to mean the discount only applies to new sign-ups, those upgrading to 100Mbps from lower tiers, and to customers that switch providers.

NBN Co notes the discount is applied by way of a rebate up until the end of June. It will also provide RSPs with 750Kbps of free connectivity virtual circuit (CVC) bandwidth a month during the promotional period.

Presumably existing 100Mbps users will have the option of cheaper plans once the 100/20Mbps product comes into full existence.

The temporary discount is part of a package of reforms announced by NBN Co today in response to its five-month wholesale pricing review.

The only major surprise in the reforms is that NBN Co will allow retail service providers (RSPs) to pool CVC capacity at a national level, instead of at a point of interconnect (PoI) level.

That should allow RSPs to avoid some extra CVC fees since they can dynamically provision available CVC between all NBN customers according to demand, instead of doing that across 121 different pools.

NBN Co also said it will add 250Kbps of extra CVC per user on 100Mbps tiers and above by May 2021, above what it has already promised to do by then.

That may go a small way to resolving an issue RSPs have with the higher tier plans, which is that they might not come bundled with enough bandwidth to make them affordable, despite NBN Co wanting to bring 250Mbps and up to 1Gbps services within reach of households.