Australia’s fastest NBN plans could soon become cheaper, if NBN Co’s proposed changes to its pricing model are approved by the consumer watchdog.
Under NBN Co’s proposed price revision – known as a Special Access Undertaking (SAU) – plans that offer speeds of 100Mbps and above would become between AU$3 to AU$10 cheaper per month.
At the same time, NBN Co has suggested the wholesale cost of 50Mbps plans – which are by far the most popular choice among users – could increase by AU$5 a month, or around 11%... a cost which providers will undoubtedly pass on to consumers.
If the changes are approved, the price gap between NBN 50 plans and NBN 100 plans could narrow significantly. At the time of writing, the average cost of an NBN 50 plan is AU$75, while the average cost of NBN 100 is AU$92.
By making faster NBN plans cheaper, NBN Co is hoping to encourage users to take up higher-speed plans. In its submission to the Australian Competition and Consumer Commission (ACCC), NBN Co says the aim is to improve the efficient use of the network. It’s also intended to help pay off some of its AU$27.5 billion in combined debt.
How the proposed changes could affect you
If you’ve been hoping for fast NBN plans to get cheaper, then NBN Co’s proposed pricing changes are likely good news, but there are some concerns for the millions of Australians who are currently signed up to an NBN 50 plan.
The ACCC has released a consultation paper in response to NBN Co’s revised pricing strategy, and the consumer watchdog’s raised some preliminary concerns about how increasing the cost of the popular NBN 50 tier could negatively impact low-income earners. The watchdog wants NBN Co to commit to meeting with NBN providers and consumer representatives to discuss how to better support these disadvantaged NBN users.
Telstra has also weighed in on the proposed wholesale cost increase of the NBN 50 tier, stating it’s concerned by the price rise coming with limited changes to service quality. It also says users who are not hooked up via a fibre-to-the-premise (FTTP) connection should not have to pay more for their NBN 50 plan.
“While NBN Co is building an FTTP network in parallel to its multi-technology mix (MTM) network to help address service quality issues, people remaining on the MTM network shouldn’t face wholesale price increases as high as proposed in the SAU,” says a Telstra spokesperson.
“Also, NBN Co needs to commit to deliver the plan speeds it is selling to service providers. If NBN Co charges a 50Mbps or 100Mbps price, it must assure its lines are capable of delivering 50Mbps or 100Mbps.”
Despite NBN Co’s bid to increase the wholesale cost of the NBN 50 connections from AU$45 to AU$50 a month, the ACCC also warns that internet providers may not be able to upsell consumers to an NBN 100 plan, particularly if they’re content with the cost and performance of their 50Mbps plan.
NBN Co could ditch all CVC… by 2026
NBN Co’s proposed changes also include scrapping the often-controversial connectivity virtual circuit (CVC) charges on high-speed plans of 100Mbps or more from July 1, 2023.
CVC charges are a cost incurred by NBN providers to secure bandwidth for their customers. If a provider’s total bandwidth is maxed-out, their customers will see their speeds start to fall. Several telcos have been vocal about their dislike of CVC, primarily because it over-complicates the process, and can inflate their own operational costs.
NBN Co’s revised pricing structure still includes CVC charges for NBN 12, NBN 25 and NBN 50 plans, though it says they’ll be phased out by July 1, 2026. However the proposal will see CVC charges axed for plans with 100Mbps and above, to be replaced with a flat monthly fee.
Keen to lock in one of the best internet deals before the proposed price rise? Take a look at current prices in the 50Mbps speed tier:
