New pricing model: NBN says RSPs could save up to 70 per cent on business connections

New pricing model for TC-2 services

NBN has revealed a revamp of its pricing model for business broadband services, replacing the NBN Business Ethernet (nBE) product that it had expected to launch later this year.

Beginning next month, NBN said it would introduce a spend cap for Traffic Class 2 business-grade broadband connections, which can be delivered over fibre to the node, fibre to the basement and fibre to the premises.

TC-2 services offer a committed information rate (CIR) with defined latency, jitter and loss characteristics and are intended for medium-sized businesses and enterprises.

RSPs will save up to 70 per cent on monthly wholesale fees, depending on factors such as speed tier, contention ratios and extra service level agreements.

“The pricing will vary based on the amount of bandwidth purchased by retail service providers each month, with NBN’s higher speed tiers expected to deliver the greatest reduction in overall costs,” the company said in a statement.

NBN declined to reveal details of its wholesale rates for business services.

NBN earlier this year revealed that as part of a restructure it had created a new Business Sales and Marketing department.

“Near one billion dollars of future annual revenue will potentially come from the business segment and this requires a fundamentally different Go-To-Market strategy to that which NBN has applied for the residential segment,” NBN CEO Bill Morrow said in a memo announcing the restructure.

“NBN is well positioned to deliver business-grade services at competitive market prices to unlock further choice and competition for Australian business,” said NBN’s executive general manager, product, sales and marketing for business, Ben Salmon

“Today’s announcement demonstrates our ongoing commitment to adapt and optimise our products and pricing in order to keep up with market trends,” Salmon said in a statement released today.

Salmon said that NBN had taken on feedback from RSPs and “developed a new pricing model to enable those offering high-speed broadband, voice services and after hours care on the NBN access network to market their products at a more cost effective price for their business customers.”

“These product offerings are particularly aimed at helping Australian medium and enterprise businesses to harness technologies such as cloud computing, multi-line voice, video conferencing and multimedia rich applications to increase their efficiencies and drive revenue growth,” Salmon said.

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