New figures released by the Australian Competition and Consumer Commission reveal that efforts by NBN Co to promote the take-up of higher speed broadband plans have had an impact, but a significant proportion of households are still opting for the slowest speed tier.
The ACCC today released the latest edition of its Wholesale Market Indicators Report. The report draws on data provided by NBN Co and covers the three months to the end of December.
In total, by the end of 2018 there were 4.4 million premises with active fixed-line NBN services, as well as more than 269,000 connected via fixed wireless and more than 94,000 connected using the Sky Muster satellite service.
Close to 56 per cent of the 4.7 million connections had wholesale speeds of 50 megabits per second (Mbps) or faster. At the end of 2017, just 16 per cent of households had opted for 50Mbps+ speeds.
In December 2017 NBN Co announced a ‘Focus on 50’ promotion that offered discounts to retail service providers (RSPs) to encourage sales of the 50Mbps speed tier. The campaign was a prelude to the launch in 2018 by NBN Co of new bundled 50Mbps and 100Mbps services.
Although the campaign has clearly borne fruit for NBN Co, the base 12Mbps service remains a popular option. The ACCC figures reveal that almost a quarter of households have still opted for the slowest speed.
There were 1.02 million households on 12Mbps services at the end of 2017; by the end of 2018 that had grown somewhat to 1.16 million. The biggest drop in popularity has been in the 25Mbps speed tier, which formerly accounted for more than half of NBN connections — now it is just under a fifth.
“It’s good to see that retail services providers (RSPs) have been able to offer higher speed plans at more affordable prices – thereby giving many consumers more choice,” ACCC chair Rod Sims said in a statement.
However, the ACCC head added: “While there is clearly a trend towards higher speed plans, it is important that consumers continue to have the option of affordable, basic plans, which still make up one quarter of all services.”
NBN Co in May 2018 revealed details of its plan to launch a new voice-focused bundled offering that would include only basic Internet service as a replacement for the existing 12Mbps product. NBN Co’s former CEO, Bill Morrow, argued that the 12Mbps product was “was never designed for broadband”.
The ACCC figures revealed a quarter-on-quarter drop in the per user capacity (CVC) provisioned by RSPs, from 1.71Mbps to 1.65Mbps, which it attributed to the end of the Focus on 50 deal.
“We will continue to monitor the amount of CVC RSPs provide to their customers, and whether customers are getting the service they are paying for, including those on the lowest speed plan,” Sims said.
NBN Co has previously indicated that some fluctuation in congestion levels could be expected as RSPs transitioned from the 50Mbps promotion, which was based on its legacy products, to the newer bundled 50Mbps and 100Mbps services.