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2014 review of retail broadband pricing

Every September, I review the ADSL2+ and corresponding NBN retail broadband plans to assess the state of price competition. Last year, I concluded that competition had stalled because ISPs were waiting to see realistic NBN wholesale prices and/or settling into a cosy oligopoly.

In the last 12 months, a couple of players (Exetel and TPG) have launched unlimited data plans; which may shake things up a bit. But, it wont help make the NBN more affordable – there are very users who want unlimited data.

To see the results, click Economuse 2014-09-23

Hobson’s choice with NBN Co. pricing

NBN Co.’s July consultation paper on pricing and billing has wilfully ignored the only serious option that has been put up against its own product and pricing construct. Unless it is changed, the NBN will not be affordable and will not increase broadband utilisation.

This paper calibrates the options against the 2012-2015 NBN Corporate Plan and other analysis.

It includes the “traffic model” as Option 6 and concludes that this will make the NBN more affordable and give the industry the certainty is seeks in future reductions in unit traffic charges.

The paper can found by clicking here: Economuse 2014-08-14

Option 6: Assessing the revenue impact of the “Traffic Model”

This paper complements others written about the Traffic Model. It is described as Option 6 because it was wilfully neglected in the Options considered by NBN Co. in its July 2014 consultation paper.
The wholesale tariffs in this paper were calibrated from retail broadband prices at September 2013 and the revenues are compared with those in NBN Co.’s 2012-2015 Corporate Plan (the only publicly available plan currently).
It is interesting to note that despite a very low entry level (Starter) tariff of $10pm compared with NBN Co.’s $24 pm (includes CVC component); the Traffic Model is viable.
The Traffic Model is a better match with real consumer expectations and policy goals than NBN Co.’s current revenue model.

The 4 page paper can be accessed by clicking Option 6

Can we go faster and cheaper, please?

How compelling is the NBN value proposition? From May 2014, the early NBN release sites are being disconnected from the copper and HFC networks.

The column looks at the implications of take-up and speed choices for NBN’s viability and the national interest.

It also shows how the alternative traffic pricing model (that I have advocated for a number of years now) would make the NBN more affordable for voice-only users and also make the NBN more competitive against mobile services.

To read the column, click here: Economuse 2014-07-21

Utility pricing for the NBN

The focus of NBN Co. management has been on supply – stabilising the roll out of the access network under the new design rules intended to make the NBN available more quickly and more cheaply.

The focus needs to shift to demand – what pricing structure will efficiently recover costs, achieve policy objectives and promote the adoption and utilisation of the NBN?

This opinion piece explains why the current AVC/CVC pricing model is flawed and needs to be reviewed before the next corporate plan is completed.

For more, see Economuse 2014-06-10