Broad industry support for NBN pricing revamp, Bill Morrow says

NBN reports 148 per cent revenue growth for first quarter of FY17

NBN CEO Bill Morrow says there is “broad-based support” among National Broadband Network retail service providers (RSP) for a shift to a modified discount scheme for the capacity-based CVC charge.

The CVC — Connectivity Virtual Circuit — is a per megabit per second capacity charge that NBN levies on RSPs and is a key component of NBN’s income. NBN has in the past blamed CVC under-provisioning by some RSPs for speed problems encountered by end users.

“We are engaging with our retailers at the moment about an evolved discounting structure that allows them to differentiate from each other,” Morrow said today during a briefing on NBN’s Q1 results.

“The conversations are going well and there is broad-based support for a new discount-based scheme based on the retailer average of CVC per end user,” the CEO said during the briefing covering the quarter ending 30 September 2016.

“We will update the market on the next steps when we complete this consultation.”

Earlier this year NBN implemented a CVC discount scheme based on the total CVC provisioning per end user by RSPs. The new scheme will see that discount move to a per RSP basis, with CVC prices dropping the more capacity is provisioned per user. The intent is to ease the financial burden on RSPs and reduce under-provisioning.

Morrow said today that “another adjustment needed in the industry” is educating consumers about the different speed tiers available on the NBN.

“We are hearing many stories that people are unaware of their purchased speed tier, let alone what else was available,” the CEO said. “As we educate end users about what they need to do to switch to the NBN, we’re also explaining that they have a variety of speeds that they can ask their retailer about.

“Our website will outline speed tiers with a helpful assessment tool at the point of checking when their home can be connected to the NBN network.”

At the end of the quarter just over half the premises with fixed-line NBN connections were using 25/5Mbps connections; the next most popular speed tier was 12/1Mbps (31 per cent of premises), followed by 50/20Mbps (4 per cent). Some 13 per cent of premises with active NBN connections had 100/40Mbps connections (and 1 per cent of premises had 25/10Mbps connections).

Revenue growth

NBN reported revenue of $181 million for the Q1, up 148 per cent on Q1 FY16.

If subscriber costs are excluded, NBN’s EBITDA loss for the three months to 30 September hit $501 million (compared to a loss of $336 million for the quarter ending 30 September 2015).

Premises able to order an NBN service grew to 3.23 million, up from 1.38 million in the comparative quarter. Premises with active NBN services reached 1.38 million at the end of the quarter, up 126 per cent from Q1 FY16.

NBN ended the quarter with 3.23 million premises ready for service (that is, able to order an NBN-based broadband service).

There were 927 million premises connected via fibre to the node and fibre to the basement, 1.4 million able to order a fibre to the premises service, 416,000 connected via fixed wireless and 416,000 premises via satellite.

Some 28,000 premises in the hybrid fibre-coaxial (HFC) footprint were ready for service at the end of September. During the quarter, NBN announced that it had decided to largely scrap the plan to use Optus HFC assets.

Instead, the bulk of premises in the Optus HFC footprint will be connected via fibre to the curb (FTCC — also described as fibre to the distribution point or FTTdp). NBN made the decision because the cost per premise of connecting homes using the Optus HFC network made it an unattractive proposition.

“Essentially the advancement in FTTC technology made it commercially and operationally more attractive for these areas,” Morrow said today.

“This decision is the most recent example of our technology agnostic approach. It will give us a great opportunity to refine this new technology and hopefully see it play a more prominent role in the multi technology mix.”

NBN has pushed ahead with the use of Telstra’s HFC assets, however, and the technology “remains a significant and vital part of our network,” Morrow said.

During the quarter NBN signed agreements with six construction firms for work on HFC. Those construction partners will be managed by Telstra under a $1.6 billion agreement signed in April.

Join the PC World newsletter!

Error: Please check your email address.

Tags Networkingnbn coNational Broadband Network (NBN)national broadband networkbroadbandNBN

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Rohan Pearce

Rohan Pearce

Show Comments

Most Popular Reviews

Latest News Articles


PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?