Wireless services may cost more than fixed line with new NBN Co pricing

Regional users could end up paying more for 50/20Mbps services

NBN Co is preparing to launch a bundled fixed wireless product that will see retail service providers (RSPs) pay significantly more than for the equivalent fixed line offering.

Appearing today before a Senate inquiry into the National Broadband Network rollout in regional areas, NBN Co chief financial officer Stephen Rue said that the company had completed a consultation with RSPs and would begin offering the new fixed wireless products from 20 August.

Fixed wireless is mainly being used to connect regional areas to the National Broadband Network.

NBN Co in May foreshadowed the launch of a 50/20Mbps fixed wireless product that would bundle together access and capacity fees. It follows the launch earlier this year of two new fixed line wholesale products that include bandwidth.

The move to bundled products on the fixed line network was part of an effort to encourage the take-up of higher speed (and more expensive) NBN products as well as combat any under-purchasing of bandwidth by RSPs; before the bundled products were launched RSPs paid separate fees for AVC (access) and CVC (bandwidth shared between an RSP’s customers).

Rue said that NBN Co had been consulting with the industry on the best pricing construct for fixed wireless given that it relied on a “finite resource” — the available spectrum.

“We listened to feedback throughout the consultation and have kept the bundled price of the 50 megabits per second product at $45 for existing users,” the CFO said. “These new wholesale bundled discounts will provide RSPs with added flexibility and choice to package and price their retail plans for homes and businesses”

For new users the 50/20Mbps bundled fixed wireless product will have a wholesale price of $65 a month (including 2Mbps of capacity). NBN Co’s fixed line 50/20Mbps bundled product costs $45 a month (its 100/40Mbps bundled product costs $65 a month).

According to NBN Co, pricing for bundled 25/5Mbps and 12/1Mbps services, which between them represent the majority of fixed wireless users, will be lower on average than the non-bundled equivalents — and available at the same price point as fixed line equivalent services.

NBN Co’s non-bundled “legacy” fixed wireless products – with separate AVC and CVC charges — will still be available at the same pricing as the equivalent fixed line products.

Rue said that NBN Co would continue to discuss new products and appropriate price points with the industry and that the bundled fixed wireless pricing was not necessarily “forever”.

“It would be too early for me to preempt what those products may be – but we’re very conscious of the fact that we need to provide a service to people on the fixed wireless network that meets their needs,” the NBN Co executive said.

NBN Co will continue to consult on new product ideas to “better reflect user demand on our fixed wireless network,” Rue said.

Rue said that NBN Co is continuing its efforts to address congestion on the fixed wireless network.

Earlier this year NBN Co CEO Bill Morrow revealed the company was considering throttling fixed wireless “superusers” to combat congestion.

Rue told the committee that to date, “more than 3100 cells across the NBN fixed wireless network have had capacity upgrades completed and of these more than 2200 were completed so far this calendar year, with a similar number scheduled by the end of this year.”

“We continue to examine options to help manage demand on the network, but we will consult with industry before adopting any new initiatives,” he said.

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Tags Networkingnbn coTelecommunicationsNational Broadband Network (NBN)fixed wireless

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