TPG's unlimited data plans on NBN will stimulate competition, NBN Co says
- 28 September, 2012 12:31
The release of unlimited data plans for the National Broadband Network (NBN) by TPG will signal further competition in the market, according to NBN Co.
TPG announced recently it would offer an unlimited data plan on 12/1Mbps speeds, with no other companies releasing unlimited data plans on the NBN.
Jim Hassell, head of product development and sales at NBN Co, said the announcement – and players like TPG – will encourage other NBN providers to offer better plans and will increase the level of competition in the market.
“More people have come into the market and that changes the dynamic. We’re already seeing that across the network because basically everybody gets access to the same service with NBN Co and they get access to the same price,” he said.
“So they compete at the retail level … With TPG offering plans and other people offering new plans, it’ll spur people on to compete with that.”
While some smaller companies have stated it is costly for them to offer nationwide NBN services, Hassell said he doesn’t believe there are any barriers to other companies also offering unlimited data plans.
“The way it works is NBN is wholesale only and we basically provide our products and pricing to the service providers and that’s part of their input cost … It’s just like any other input cost for any other company. They decide what they want to do with it and how they want to tailor their offers around it…” he said.
“It’s really up to them to how creative and innovative [they are] and services that they offer in the market.
“My observation is that we’ve already seen that competition at work with prices being announced and then being reduced with more competitors coming into the market. We’re really pleased to see TPG offering their service and hopefully that will continue.”
NBN Co today launched its Multicast feature on the NBN, which allows service providers to broadcast IPTV channels on NBN points of interconnect (POI), with each POI streaming around 150,000 homes.
NBN Co is hoping the feature is not only used by consumers, but also adopted in education and health sectors as well.
“Multicast is really aimed at delivering content to a large number of users – people who are going to look at the content at the same time,” Hassell said.
Sports broadcasts could also come into the mix, with sporting content distributed by Multicast to allow many users of the network to view sporting matches. This could be watched from a connected TV, a computer or a tablet, according to Hassell.
NBN Co is already in preliminary discussions with sporting bodies, but said it was unable to disclose who those sporting bodies were.
However, in August this year the Sydney Morning Herald reported that talks were taking place between the AFL chief executive and NBN Co.
NBN Co also enlisted the help of the AFL to launch the NBN in South Morang in Victoria.
So far, large and small companies how have shown interest in Multicast, according to NBN Co, as well as media/content providers and non-traditional customers.
While Multicast could provide a competitor to pay TV and cable TV, Hassell was quick to point out that the feature will not spell the end of subscription television.
“I think it would be a distribution mechanism for them. For pay TV and cable TV, the choices of getting that out at the moment are you can do it via cable … and if not cable then perhaps satellite or some of them will actually run across the copper network. The Multicast from NBN Co will enable people to get to a much wider audience,” he said.
Like many aspects of the NBN, Multicast has not been without its controversy.
In August 2011, NBN Co released details of the Multicast offering and seeking industry feedback. Simon Hackett, founder of Internode, was quick to respond to the pricing structure of Multicast, stating pricing “should be designed to encourage strong adoption” [PDF].
In response to this, and other feedback from the industry, NBN Co reduced the entry-level structure of Multicast, which was heralded as a win for the industry.
The entry-level price for Multicast is now $2 for the first 5Mbps, which was reduced from the original entry-level price of $5 for 20Mbps.
This extra tier is not expected to impact on NBN Co’s revenue stream, according to Hassell, with Multicast making up a small part of the company’s revenue.
“We introduced a new tier, so we didn’t drop any existing prices ... In the calculations that we did, our anticipation is that would just encourage more people sooner to take it up. Multicast is part of our revenue stream in our corporate plan, but it’s not a major part of that. It doesn’t have a huge impact on us to do that,” he said.
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