NBN Co registers drop in entry-level services

12Mbps services decline quarter-on-quarter in absolute terms

The proportion of households with services at the slowest NBN speed tier decreased during the first quarter of the year, with the number of 12 megabits per second (Mbps) services also dropping in absolute terms, according to figures released today by the Australian Competition and Consumer Commission (ACCC).

As of the end of December, NBN Co data published by the ACCC revealed that there were 1,164,507 12Mbps services in operation – close to a quarter of the total active NBN connections. By the end of March this year the figure was 997,938, or just over 19 per cent of the 5.2 million NBN services in operation.

“Although the number of consumers on these plans has dropped, they still account for a significant number of NBN users,” ACCC chair Rod Sims said in a statement.

“We would be concerned if the options to acquire entry level plans declined, either through availability or higher prices. Indeed, we continue to have concerns about the impact of NBN pricing changes on affordability of entry level plans for those consumers who only require a basic service.”

Last month Sims used a speech at the CommsDay Summit in Sydney to express his concerns over the affordability of NBN services for lower income households, with the ACCC head saying he was worries that NBN wholesale pricing was eroding the number of telcos offering 12Mbps services.

“Under the new pricing, the cost of accessing the NBN to supply a 12-megabit service has increased substantially and is now, amazingly, close to the cost to supply a 50-megabit service, with this gap likely to narrow further,” Sims said in his address.

“Resellers were the first to exit, but the impact is becoming more evident in the offerings of established national retailers.”

Sims said the ACCC’s concerns would be assuaged if NBN Co revisited its entry-level bundle pricing or introduced a new product to ensure there was “health competition” at the $60 price point for a service with unlimited downloads and that compared favourably to ADSL speeds.

The figures released today also reveal that NBN Co’s effort to promote the take-up of higher speed services continue to bear fruit, with around 58 per cent of services on the 50Mbps or faster speed tiers.

As of the end of March, there were more than 5.2 million total active NBN services -- up 8.5 per cent on the prior quarter -- with more than 3 million of them on 50Mbps+ plans.

Per user capacity commissioned by telcos grew from 1.65Mbps to 1.67Mbps, the ACCC said.

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